Transcripts For SFGTV BOS Govt Audits And Oversight Committee 31517 20170321

Reed. I want to of knowledge and think our community clerk erica meijer and also think the folks at sfgov tv Jessica Larson and jim smith for the courting our meetings and making them available to the members of the public. Mdm. Clerk any announcements . Yes these make sure to sounds all the phones and electronic vices. Complete speaker cards and any documents as part of the file should be submitted to the court. Items acted upon today will appear on march 21 board of supervisors agenda unless otherwise stated thank you. Im clerk please also the matters of the committee are here. If you would call item number one and two yes item number one resolution receiving an acuity and or board for the Noe Valley Community Benefit District for fiscal year 201516s amended as required by the property Business Improvement district lot of 1994. Item number two a resolution of receiving and approving the annual report of the ocean avenue Community Benefit district for fiscal year 201516. Thank you thank you i understand were joined by [inaudible] executive director of noe Valley Committee benefit district. So why dont we start with the noe valley cbd and then move on to the ocean avenue cbd. I still understand dan weaver the executive director of the ocean avenue cbd is here as well. Before we start the presentation colleagues any comments . I just have one overarching comments. Now the were all cut up and backlog has been cleared. Which is i think would be helpful for the committee and the public to see the metrics over time because they come in snapshots of 2015, 16, 201415. Relative to the for performance criteria there may be interesting to actually see without having to do whatever Research Whether they were met in the Previous Years but i think that would be worthwhile just to include in these records Going Forward a matrix so that we can say look at that theres been improvement over time and learn the lessons from the Previous Year and then when we talk about the noe Valley District already some questions. I think fundamentally the original Management Plan was unrealistic and discussed the way to fix it because the reality is when youre doing with such a small amount of money there is no way that you can have it at 10 admin overhead and thats the way was originally envisioned and interestingly enough, im glad these two items were called together because the cbd that mr. Weaver runs is about the same dollar value has been only valley cbd they start out with more realistic predictions and projections are rather going to this thing where every year we we say you did meet this management criteria theres got to be a way to go back and fix that because it becomes a meaningless metric. [inaudible off mic] yes. Im here to help you on that point in a finger. I think at the beginning we all come in i do these budgets all the time and you want to say 10 seems like a reasonable thing and way back when because you know we valley was one of the earliest cbds the first, it seem like symantec i did the original cbd enabling law and which was by the way i felt was going to be for north beach and here we are 15 years later in north beach doesnt have one is the know a valley goes first or that alternate over to the chairman thank you supervisor peskin. Mr. Cordis. Thank you chairman kim supervisor peskin president breed can supervisor peskin your comments are well received and ill include that and view feature cbd reports going back to five as fiscal years for the cbds been around thus far. Today we are here tonight but this meeting noe value valley cbd 1516 and or part the cbds are governed by stu oz is a lot also by the 1994 act can be fine in the highway code 3600, etc. And the local law article 15 of the San Francisco business and tax regulation code. This resolution covers the end report for fiscal year 201516 80 ew ensures all cbd bids are meeting their Management Plans that oewd staff conduct an annual review excuse me i lost my place there. Of annual reports and cpa financial reviews and oewd provides the board with a summary memo on the results of those unnatural review and handle reports reviews. The note noe valley cbd was formed in 2000 as previous you mentioned were the first cbd in San Francisco. It currently has approximately 2050 parcels in that district it is probably based started with an assessment budget of 203,001 38. It set to expire on june 30 2020. The staff is executive director deborah eman, who is here today to speak about programmatic achievements of the cbd in the past fiscal year there served areas of public rightofway, sidewalk operations from district identity and street improvements. In administration and corporate operations. Oewd reviews for benchmarks for related to all cbds first is whether the variance between the budget and the Management Plan and the fiscal year budget was within 10 Percentage Points. Whether 5 of no we valley cbds actual came from sources other than assessment revenue. Whether the variance between the budget amounts for each Service Category was 10 Percentage Points of the actuals and whether cbd is indicating amount of funds carried over from current fiscal year and designating projects to be spent in the upcoming fiscal year. For benchmarks one, noe valley cbd did not meet the requirement was an account review added post cbd establishment which increased expenses. Additionally the cbd board elected to allocate more money on activating the street. The combination of these two items cause variances to surpass permitted levels. For benchmarks you, noe valley cbd economic this benchmark. It was a significant decrease in the percentage of nonassessment revenue. This was due to a few events which are revenuegenerating for noe valley cbd not occurring. As was the cbd not receiving city grant money in fiscal year 20152016. For benchmarks three, noe valley cbd did meet this requirement could they maintain the variances within their budgeted categories. And for benchmark for, noe valley cbd did indicate their carryover funds from fiscal year 1516 did meet this requirement. Oewds findings are recognitions inclusion is in completing the review of noe valley cbd annual reports they implement it all the recommendations from fiscal year 20142015 the cbd will sunset in 2020 10 ew references cbd because preparation for a new campaign this current fiscal year. Benchmark one and benchmark two discrepancies need to be corrected and supply quality per conversation on that. Oewd has been working on with noe valley cbd on this in fiscal year 6070 that carly on track to meet those benchmarks for the next fiscal year. If theres no questions for oewd, debra nieman is here to address it achievements of the cbd. Thank you if we can have ms. Nieman. I agree with you, arun in terms of changing that you cant do it into you renew. At least thats my anderson. Quickly, we are starting our 12 year. We are smallest cbd. Were only eight city blocks per like to think of us as the mightiest because of all the improvements weve made to the street. Eva Green Committee weave an event committee. If two guys on the street. Sam and said a work 7 am3 pm every day clearing off junk and sweeping the gutters. We do tend steam cleaning spurrier which is more than any cbd in the city. We know when people come from palo alto to say you can eat off your starbucks they will rather than opt you know youre doing a good job. Mcspadden we do longterm Strategic Plan in 2006, which enabled us to apply for a lot of Capital Improvements from the city and other resources. We plan 144 new trees on eight city blocks which is a lot. We have eight sidewalk gardens, 22 planter boxes, to park was, but the flower baskets and people always love. The first thing people ask for the longterm Strategic Plan was high visibility for crosswalk that our First Priority and last year we completed that almost every intersection except the Church Street which is tricky because of muni. We created three new bus bulb outs to reduce pedestrian traffic on cultural castrol 24th because he are the land of baby strollers and dogs. We put in 44 bike racks. We did notnevermind and its three new benches installed in the district. And we are about to enter we traded a logo for ourselves from our director who those in the neighborhood could we partner heavily and enthusiastically without the know eval emergency friends of noe valley we have this New Town Square which we are trying to activate and create more of a Living Community space. We do summerfest. We do 24 holidays on 24 street that we have reindeer in the park with and were entering our 13th year of cleaning cleaning and printing public space to a questions . Supervisor peskin vote up to the earlier stuff i spoke to, i think of we saw a matrix over time benchmark number two would actually show that in other years, you exceeded the 5 absolutely. That would be awful because when you look at this. Shut its like okay and benchmark chart number one was unrealistic in 2005. Benchmark number two lead me to say well ms. Nieman, what were you doing in the answers, know weve actually gotten grants and previous fiscal years that took us above the 5 . So this is really more of a comment to staff which is, if god and country could see that we would say, they did great in 2014 and 2015 and theyre still writing that out if you will. It carryover if you will. Absolutely. We had over 1 million in grants and Police Capital improves weekend to honor him. No. I totally get its really common for oewd to how these metrics should be displayed for the committee and for the public to realize you are actually over a larger snapshot in time over performing the right peppers Management Plan is a joke. In many ways. It didnt work but when you first go out with any policy or any piece of legislation its never perfect to we were the first ones and you are behind that so away we go. Thank you. So can we now have and weaver dan weaver. Actually, im sorry mr. Cordis juergen present. Yes ill be presenting on the Financial Data and those for benchmarks all go through this as quickly as possible to get mr. Weaver of two discussed the programmatic achievements of the cbd. Ocean avenue cbd is a propertybased district was formed in 2010. Expires in on june 30, 2025. Its initial assessment budget was 239,000, 570. The staff is executive director dan weaver along with a few part time assistants. Dan is here to speak about those programmatic achievements of the cbd. They provide safety and Community Service ambassadors to the district of data cleaning program beautification program, and they activate the public spaces of zone number to which dan can speak out more. Before benchmarks once again are the 10 percentage point variance is from the Management Plan budget to the actual budget for the fiscal year. Whether the ocean avenue cbd met 1 of sources other than assessment revenue. Whether the variance between the budget amount for each Service Category was within 10 Percentage Points from the actual and whether the cbd is indicating the amount of funds carried over from the current fiscal year and designated projects to be spent in the upcoming fiscal year. For benchmark number one, ocean avenue cbd met this requirement. Everything was within the variance percentages. Benchmark number two, ocean avenue cbd achieve this benchmark your bed 18. 21 of their budget come from nonassessment sources. For benchmark number three, ocean avenue cbd met this requirement that all variances were that within the prescribed point system and for benchmark number four, ocean avenue cbd did meet this requirement as well. In conclusion, ocean avenue cbd has performed well and implemented in service plan in the district. They implemented all of the oewds recommendations from the fiscal year 1415 annual report. A market and produce Liberty Events including they streets, increase their opportunities in partnering with Community Stakeholders and riskiness will agencies and a meeting and active board of directors and several subcommittees. Are there any questions for staff . Here is dan weaver. Good morning supervisors. Dan weaver executive director of the ocean avenue cbd. I am here to say a few words about our program accomplishments. First, i have to correct chris in one matter. We have engaged with livable city to have sunday streets but you have to wait in line for a few years for that good since we have a streetcar line that never rests , at least during Daylight Hours we are going to have to figure out a simple version of that taking one lane of traffic for bicycles and pedestrians but we are working towards having some type of sent sunday streets in the future. As with noe valley were working primarily on beautifying and then skipping the district and as well as activating. In the past year we have new plaza which connects the streetcars and buses on ocean avenue to the City College Campus and its also immediately adjacent to the new bus terminal and a new Affordable Housing complex. So we are busily trying to identify how to activate backspace. In the past year we have also seen the completion of a series of on and off ocean avenue landscaping from the Public Works Department from a city bond issue which also contributes. It seems that assessment payers and general merchants and people in the neighborhood once they are used to having their graffiti cleaned and their streets clean, and gutters clean, then they want it more beautiful. So that is basically the focus of our improvements to the district that we are working on. Let me go through this. This is a map of the cbd. You will notice it also includes the City College Campus as well as the balboa reservoir side which is where future Housing Project is coming in. All of that is in theory part of the cbd. I think when the reservoir gets developed it gets developed we will actually be doing work there as well but that would require a change in assessment because right now, what we clean in this area of the reservoir and the City College Campus is right along ocean avenue, the landscaping right along the sidewalk. The district runs basically from the City College Campus in the freeway of two the el rey theater. We are looking forward to seeing its improved, rehabilitated. First come i should say landmark, improved rehabilitated and being made again part of the community. Which is an excellent model for how to get things going on the rest of the neighborhood. That is the old part of the neighborhood because the new part of the neighborhood right around City College Campus and the freeway is something that is really working well. The other day for example i was walking with a friend, ocean avenue and shei said, the all these New Buildings . These were parking lots an old bus turnarounds and she said, so did you not fuel buildings down and i was happy to say, no, they are over there. We have not knocked him down. We hope not to knock down during many of them but at the same time weve had the opportunity to create a new part of our Retail District in the last eight years. I may get through the slides here. Besides the board of directors we have a Street Life Committee that focuses on the activation of the neighborhood or the ocean avenue Retail District. Two public Arts Entertainment and design improvements. It is this committee which focuses on individual Business Opportunities particularly in terms of Small Businesses. We are partner with this year with the western neighborhoods project to focus on history of the neighborhood the angle side neighborhood, and the bubble city to get activating programs including sometime in the future, a sunday streets effort. Friends of the urban forest for landscaping and neighborhood organizations in terms of working with the residential neighbors as well as the merchants and Property Owners in the commercial district. These are some of the Government Agencies that we work with. In the most recent fiscal year ocean ave. , association was able to bring in 224,000 in nonassessment funding to augment our 302,000 of assessment funding. The basic were the primary expenditure category for our budget is cleaning maintenance and safety and we have a Company Named clean skates that those daily street maintenance. Has two people out on the street six days a week. Arborists now is also involved with maintaining trees in the district and substantial part of our maintenance budget goes towards maintaining the streets. Ocean avenue on the side streets of our district. Hopefully, that will change to some extent as the city steps up and takes over more responsibility for maintaining street trees. Currently, or in the last year, and into this year, we are working on landscaping the city owned property in the corridor at geneva and ocean. As well as maintaining and improving the sidewalk gardens on and your ocean avenue. Let me go back here. We put an effort into getting neighborhood volunteers and increasingly it seems that the best volunteers are School Students who, for example bv has a volunteer day twice a year they are able to maintainhelp us maintain a lot of the district. The corridor the design process is a program that went forward to deal with access by pedestrians and bicyclists to and from the bart station to city college in other parts of the commercial district. That design process has some shortterm parts of it being carried out currently and longterm aspects of it being worked on i guess between the city and city college. With that design process focuses on a number of improvements which would make things easier for pedestrians and bicyclists by doing things like widening sidewalks and providing bike lanes where there are none now. We are working with city college to try to get additional land in parts of ocean avenue to achieve that. We have a marketing and Promotion Program for the corridor in our businesses called second sundays. Which include music events at various venues on the street. We are continuing to promote that so that we can get people to come out and check out the neighborhood. We are planning to grow second sundays we can activate the newly completed unity plaza which is about 65 60 feet wide by 200 feet long. Its no small closet. Here we are at oktoberfest event at one of our venues. We also have childrens entertainment and second sunday. Here is a performance at the angle side library. The childrens entertainment part of our promotion activity is funded by omicc grants as opposed to assessment funds were oewd funds. Challenges to expanding volunteer base and retaining volunteer interested in doing with vacancies to provide guys are service. Now that we have a bank again on hardware store, and a Grocery Store people are refining their inches in what they would like to see on the street. Sometimes this conflicts with what Property Owners and property lease holders have to offer. Especially when theres new developments coming along its important thing to try to deal with. Your mix of chain stores and Small Businesses and right now, the event it seems to be clearly with the chain stores because of their ability to fund expansion. Compared to Small Businesses. So we are doing our best to help the Small Businesses to succeed in this new environment. One of the big problems we have with the old building stock is the lack of investment in it. The Property Owners in the Property Owners the Business Owners often times have the ability or the inclination to fix up their buildings mr. Weaver i do have a question about Small Businesses. We can wrap up after that. I know there is supervisor yee cares a lot about making sure theres multilingual access to Small Businesses in ocean avenue particular is quite a number of chinese speaking small Business Owners. So could you tell us how many of the chinese small Business Owners your organization the cbd has reached to queen all of them every single one . We have. You go to every single Small Business several times a month with various activities, programs when you say stuff people they speak cantonese queen not all the time. But you do of Staff Members that language capacity queen we can get that capacity through oewd. So youre recognizably a partner with oewd to reach out to the small Business Owners right. Could you tell us a little bit about summary outcomes about outreach . Well, the outcomes of the our reach come in the fact that we have programs for Small Business. The most successful one and one that was free to them was to get an ada evaluation of their business. We had, i would say a least 30 Small Businesses now that ive had that done and theres a long list of interest. We also have a secondsf shines program were number of Small Businesses have been able to participate how many of them were chinese speaking businesses . That either participated in sf china or the ada evaluation queen a number of them could i was eight approaches 50 50 , okay. Thats great. To do you have plans to greater work around crater outreach to these businesses . In the future . Yes were always visiting him with a new city Funding Source that they can apply for. Okay. That would be great thank you to much mr. Weaver for your presentation okay. So at this time we will open up for Public Comment on items number one and two. Seeing none, items one and two are close [gavel] i did you see we have a legislative staff member from supervisor yee office. Would you like to say anything . Colleagues can we take a motion on items one and two queen i move items one and two to the board with a recommendation so we have a motion to move these four. With a positive recommendation to the full board. We can do that about opposition. [gavel] thank you both to noe valley and ocean avenue cbd and lew as well. Mdm. Clerk please, call item number three item number three is a hearing on the operation of maintenance status on the citys Emergency Water supply system. From the Fire Department in 2010 receiving an update on plans to suppose was surprised he no longer use for necessary to the ongoing functions of the system. Mdm. Clerk i made a mistake i didnt get a request by Member Committee to actually call item number five first. Because we have members of the public that cannot stay for that item. My apologies and we will be quick. Im clerk, please, all call and five the item number five and resolution urging the cow 40 state legislature to amend the revenue and taxation code to enable local california jurisdictions [inaudible] personal and Corporate Income tax. Thank you mdm. Clerk to knowledge the author that item supervisor peskin to introduce item number five. The thank you mdm. Chairman and member breed. This item is actually been in front of the board of supervisors in almost identical version a couple of times and received seven votes but needed eight so we reintroduced it and send it to committee so thank you for your indulgence to we have a representative hear from the Controllers Office with a very short powerpoint but let me just speak to this resolution for a brief moment. This is a resolution urging the state legislature to amend the california revenue and taxation code at section 17041. 5 which was put in there in 1963 which prevents any local musicality from considering a personal work Corporate Income tax in any municipality in the state of california. As many jurisdictions throughout the United States of america. States cities counties that do levy such income taxes could i wanted to urgent state legislature to do this and acknowledge our summary member phil king, has introduced Assembly Bill 1007 which would amend this portion of the revenue and taxation code but i want to introduce this so we can have a menu of options to discuss as we move forward acknowledging that our sales tax failed this last november, debbie of huge transportation and Homeless Needs to address obviously if the revenue and taxation code were to be amended by the state we would have to craft something here locally, which could be a corporate or personal income tax and that of course would be subject to a vote of the voters, most likely two thirds vote but in certain instances to be a 50 vote, but that is a long way in the future. But i thought it is a conversation worth having and want to acknowledge and thank Assembly Member king for having the courage to do this but hes not the first. Our own Assembly Member who used to be a member of this body mark leno, did such in 2003 was not able to get it passed. The county of los angeles actually attempted to get the state legislature to amend the revenue and taxation code last year so this part of an ongoing conversation mistake of california and we will hear from the controller about how much this is quote unquote worth but its all worth a lot in outsourcing Peter Strauss from the San Francisco transit riders brought this concept to my attention. Would that turn it over to the Controllers Office mdm. Chairman. Good morning supervisor that my name is carol blue, with a Budget Analysis Division with the Controllers Office. So this first slide shows you state to state law that prevents a local income tax that this measure seeks to amend. You will see it says explicitly that no city, county city and county, will be allowed to collect tax base on income. The next slide shows that the states largest tax resources personal income tax and its Third Largest source is corporation tax. Its much smaller, the thirdlargest one. California state income taxes very progressive, varying from 1 12 and then theres an additional 1 on personal income greater than 1 million which funds the Mental Health services act program. Then the Corporate Tax rate is flat at 8. 84 of gross income. So weve done a preliminary analysis with a 0. 5 tax rate on incomes over 1 million would be. That comes to 62 million the we picked 0. 5 because the last time la proposed an income tax it was of that amount. So depending on what is proposed it would just be a multiplier of this. This is based on Franchise Tax board data from tax year 2014. Then lastly, in other places in the United States income tax local income tax is more prevalent so 11 states cities or counties that actually a personal income taxes. You will see some examples here a kind of very by jurisdiction and theyre not really super comparable but it gives you a flavor of the fact that this is not new. With that ill take any of the questions. Mdm. Chairman i have no questions but i want to put this in the context of possible federal income tax reduction and to the extent that happens, i think there is an imperative for states and local governments to capture those so we can fund the same types of services that are given through the federal government to states and municipalities. So i think this is the right time to be having this conversation and its probably going to be conversation that takes a number of years and if the state legislature were to ever rescind this part of revenue and taxation code we can ever robust conversation here at the board with a public vote out what the right tax to craft is and of course it would have to receive a vote by the people he four it ever went into affect. Well, thank you so much for this presentation ms. Look at its actually very interesting and i would love toonce absorbed some of this information cannot have it deeper discussion and ive been with this could mean for the city but want to thank supervisor peskin kirbyintroducing the resolution to the board and hopeful to be a good conversation at the state level about this. Thank you so much speed as if Columbus Ohio can do it, so can we. So see no further comments from members of the board, at this time will open up for Public Comment purchase item number five. Good morning supervisors Peter Strauss from the San Francisco transit riders with endorse this resolution before you today. I like to address my remarks in particular to supervisor breed who did not support this was before the full board. I think you urge that you consider revising that vote today when it comes back before the full board its important to realize this is not an endorsement of any specific proposal. This is to grade another option of progressive option, for the city and county of San Francisco and potentially other municipalities in the state particularly, as our values and commitments are under threat as was stated by the Current Administration in washington. Its important that the city have this option available to it and i urge your support. I dont think any to pdr and evan made. 170 maze of alleys within the United States to impose an income tax. My own inspiration with indianapolis, not columbus, but this is certainly a valuable source both financially and. Likely that the city should avail itself of. Thank you. Thank you mr. Strauss. Other any other members of the public that were to speak on this item . If you would like to speak, please, line up. Hello. My name is david brin could i have been talking to various budget legislators but this idea of backfilling federal tax cuts with local and state taxes under ad hoc cowboy budget firewall. And read over the resolution. I just want to point out that if we are going to be collecting personal income taxes with managers have the right to collect him. We want the state to help us to do it. We want to require to be able to send the state here are local tax brackets and then have them include that on the state income tax form because otherwise it 20 another set of paperwork and people to be underweight or they wont do it in the first place. To add onto that the mileage be able to see her like to see San Francisco have negative tax rates for certain income tax brackets. That way that the estate tax because the state currently requires us to collect 8 and a Quarter Sales tax. We should have some ways to reverse that. So we be could create a tax cut for lowincome and middle income san franciscans at the same time we pay for that with a tax increase on higher income san franciscans i think of be great for everybody and avalon would San Francisco values. Thank you very much. Seeing no other members for item number five, Public Comment is now closed. [gavel] supervisor peskin would you like to make a motion for this item . Yes i would. I think this would be a great way to if you were to come to pass to address our growing income inequality here in San Francisco which is rivaling wanda. I would like to move this but like to hear from our colleague, supervisor breed im so sorry president breed thank you i will not be supporting this item. Again. I realistically, i dont think its ever going to happen. I know theres a bill in the state of california to allow local governments to try and take these kinds of issues to the ballot to happen and i just, realistically i realize supervisor peskin wants to put all options on the table but i dont see this happening and i also have concerns over the fact that we have a overnight billiondollar budget in a city that has a population of less than 1 Million People and with our current revenue there is a lack of accountability on so many Different Levels. I do think that part of our role should also be to look at how we are spending money now and where the accountability for those who receive honey from the city from that department the lease money in the city and how are we going to do a better job of spending the current revenue that we have not to mention all the setasides, all the different layers of issues with our budget in general. If i thought that this could happen and its a long ways off from happening, if it does, i would be livid more open to it but im just not really a fan of local income tax. Im not a fan of a lot of the decisions that get made in the city about people and their incomes and i just cant get with this. So im going to pass and vote, no. Thank you. Thank you president breed. Justin response to that i think that there certainlytheres two different buckets of discussion. One is how we spend public taxpayer dollars here in the city and the second is, whether we need to raise revenue through it last year this board put several revenue measures on the ballot and was not a discussion of whether we spend our existing dollars wisely. Supervisor peskin and i do not support the sales tax increase because we thought it was regressive and flat bedded overly burdened impact the data shows it overly burdens will income consumers more than regular middleclass and upper income consumers. Personal income tax is a progressive form of taxation and taxation partially of course as in its origin was to ensure that we have the public publicly investing in infrastructure whether schools, roads, Fire Departments from public safety. But actually, the origin of tax policy is very progressive. Was also about creating greater equity in our country and in our society. In many ways, its about addressing the inefficiency of when wealth accumulates amongst the few leaving vast majorities of the country in poverty and impoverished. So the other purpose of taxation is also to address issues of equity. Because in greater societal [inaudible] making sure we do not open to an oligarchy but without we were ensuring that we dont have what i think were seeing here today which is the Fastest Growing income gap in the country in a country that has put the growing wealth and income gap its well as well. I do think a personal income tax policy is worthy of discussion. Is i support it is progressive and i think youre in San Francisco and the state of california we are just going to see a continued exacerbation of the wealth and income gap that were already seeing here in San Francisco today. Our middle class is shrinking and the communities of growing our low income and are upper income communities and we need to make sure that we have Programs Services and infrastructure in place that can support a growing lower income communities and i know yesterday i talked the livid about this at the board of supervisors but automation is happening and thats only going to further exacerbated. Are going to give you see wealth grow in the hands of the few is your low income working Class Community grow and im not sure where that have the Resources Available to invest in reeducating and retraining our population to be prepared for the economy of the future. That being said, i agree it is a longterm discussion and its uphill battle but i think that we also put resolutions before the board not because we think the policy [inaudible] because we believe its the right thing to do and so i will be supporting this resolution at of committee today. Sosupervisor president breed thank you thank you for your comments supervisor kim. I just want to add two things to that. Number one, i guess because were looking at a income tax and were looking at an income tax potentially if this ever were an option for us if the state legislation passes, we are talking about the wealthier community of the city and the wealthier community of the city damn resources, they probably have several races where they live, their residencies, and why would they continue to use San Francisco as her primary residence. I mean, there are just ways around it when you have money theres ways around avoiding a local income tax, and i am not certain how this could potentially be effective, number one. Number two, im really not certain how this could actually help the middle class in San Francisco which it has been a consistent challenge as it relates to housing. We know that we are doing with this right now and trying to figure out Additional Resources to provide more lower middle Income Housing options but again a long ways off in terms of this conversation if it happens at all. But realistically i just dont know how this is actually going to work and be effective and help with some of the challenges that we are doing with which is a big reason why im going to continue to not support this at this time. Thank you president breed. Supervisor them peskin i dont believe appointing obviously we should vote but i do want to say we went in San Francisco voted to enact the first minimum min wage in the country, there was a lot of skepticism that jobs would flee in the world would change not for the better and that did not come to pass. I believe that whether this is a millionaires tax or billionaires tax rate progressive tax that reflects the way the state assesses its income taxes, it would be a benefit for the city and others would follow. Supervisor them peskin would you like to make to make a motion to recommend without recommendation alleges that mr. The full board with recreation and happy to have a vote on it we have a motion to move it with a positive recommendation. Mdm. Clerk please take roll call on the item on a motion to move forward, breed nay peskin aye kim aye. Mdm. Chairman is to aye and no nay with breed dissenting. Thank you mdm. Clerk. My apologies to those that are here for item number three. And we are to call the item we have a request with the City Attorney to actually hear item number four before we hear item number three. So we have no past item number five. The positive recommendation to adam clerk please call item number four item number four ordinance amenity minister of code to revise the residential unit conversion speed is to acquire hosting platforms to excise reasonable care verify that a residential unit is on the city registry. Thank you mdm. Clerk. We have both of the authors of item number four here today. So i want to allow president breed or supervisor peskin to make opening comments. So thank you for that opportunity and thank you to president breed for cosponsoring this matter as. As you recall last summer the board of supervisors unanimously passed a piece of legislation that would hold hosting platforms as well as hosts accountable, airbnb data indicated it would challenge that if we passed it and indeed, they made good on their threat and sued us and there has been some initial rulings by judge did not 0 in federal court. In airbnb lawsuit was joined by home away and challenged the amendment chapter 4180 of her ministry to code judge did not a interpreted section 41a of the ordinance and concluded that the ordinance only penalized hosting platforms for collecting booking fees for unregistered rental units if the platform acted intentionally or recklessly or negligently. The judge said that other interpretations of the ordinance would be unconstitutional. The proposed ordinance before us today would amend chapter 41a to clarify that section consistent with the judges reading which is our own reading. The ordinance would require hosting platforms to exercise reasonable care to confirm that units are registered before collecting booking fees and that sums up what is before us. Thank you supervisor peskin. Just want to thank supervisor peskin and president breed for moving forward with this policy. Ive always thought that shortterm rental proceeds i should be responsible for ensuring that every single post on their site has a Registration Number before they are able to postwar rent their residential units. The race small asking something we know that technology, these are capable of doing good so i appreciate this coming before our committee. Seeing over the comments from members of our committee, we will now open up for item number four for Public Comment. Seeing no further Public Comment of the comment is now closed on this item [gavel] i would like to make a motion to move this item to the full board with a recommendation. Thank you we have a motion to move this forward the recommendation. We can do that without objection [gavel] thank you the clerk is all recalled item number three so we do not need to do that. I want to thank members for your patience could supervisor peskin has introduced this hearing i do want to knowledge that deputy chief intimate anthony brother from the San Francisco Fire Department is here as was david brooks and David Meyerson from the San Francisco Public Utilities commission they we presenting here today but before beginning presentation i would like to hear from supervisor peskin in any of the members of the committee the like to make opening remarks. Mdm. Chairman supervisor breed ill be very very brief. As we all know after the 1906 earthquake and fire the city realize it needed a redundant highpressure independent water system known as the auxiliary water supply system, aws us for short, that over the last hundred plus years has been buildout primarily on the eastern side of the city but subsequently has moved in a westward fashion. In 2010 it was a jurisdictional transfer of that asset from the Fire Department to our Public Utilities commission in a general fund cost savings maneuver. I will call it what it was. And last year it was some attention about a number of allegedly surplus parts of the aws us in that article brought me to hold our hearing was exactly a year ago. Unfortunately, those parts do not get auctioned off and are still city assets. That first hearing was really quite informative and we learned a lot about portable water supply systems and our system systems and would have been done in the 84 bond and would have been done in subsequent bonds and i thought it was time to get an update from the puc and or Fire Department as to the status of the program and specifically whats happened with the 12 inch hot [inaudible] concert which seems a little dubious to me at the time another Committee Members of the government and up Audit Oversight Committee last year as well is what happened to these spare parts and we are we are going from here. With that, i would turn it over to staff. Thank you supervisor jim baskin good morning david briggs puc. Favor the introduction opportunity to give you a state of the system report would get a brief presentation on joined by her several of my colleagues at the puc as was the Fire Department and be happy to answer questions during a drought or after and without international handed over to assistant deputy chief intimate rivera to begin the remarks. Good morning supervisors. My name is assistant deputy chief anthony with era. They took over this quickly. The San Francisco Fire Department emergency firefighting water system which is also known as aws us the San Francisco Fire Department retains a Collaborative Partnership with the sf puc for comanaging emergency firefighting water system also known as aws us which was immortalized in 2015 via and mou following the transfer of the system to the puc and 2010. The performance the formalized performance standards are the following. A stand alone firefighting system. That the sf puc show maintain engineering standards, seismic performance of components, must be the same word existing aws us standards. The mou also outlines the corridor needed Emergency Response and maintenance expectations for the San Francisco Fire Department and the sf puc. The sf puc also funds 50 of an sf deep position to monitor the system. I like to bring up mr. David briggs to continue the presentation. Chief, both up to the 12 inch hose your predecessor mr. Lombardi, indicated something that the Fire Department was supportive of, despite the fact that he could not give fire trucks much less cars over as you lay them out on the west side of the city in a [inaudible] what is the Fire Departments position on and how queen thats a great question. The Fire Department is edition is, after looking after further into the specifics of the fws the system we found there were a lot of logistical issues that were prohibitive and would be would not be a efficient system to deploy. We also, with my stuff 102 berkeley Fire Department, spoke to the members out there, and we did a handson drill. That was a 12 inch hose they were the runup diversity avenue in Berkeley Queen that is correct. We found was conceptually a great idea but we actually went out and tried to deploy it wouldve taken a lot of staffing that we would not have in that situation and was also some maintenance issues and some proprietary fittings that were that would have to be purchased to maintain the system. Do you were puc never purchased any of that hose or fittings queen that is correct. Nothing was purchasing collaboratively came up with the conclusion that although this is a great concept would not work in San Francisco. Then relative to the additional parts that are left over from the 84 bond, have you been able to look at those parts and independently assess whether not they have any value for the current aws assistant . Yes, sir. I attended with my stuff and imagery check of the current aws us components that are it three different puc facilities and we do agree that there are few items that are not useful today but weve also come up with an agreement to the sf puc that before any item is disregarded or removed that the San Francisco Fire Department would have have to approve the removal of that item. Thank you chief rivera. Thank you, tony get good morning tv breaks with the puc. The morning supervisor kim im a peskin and fewer. In 2010 the puc inherited the system there was a sense of pride just with a new water system a privately share with the hetch hetchy water system we operate regionally within San Francisco. He viewed it as a way of imparting some of the knowledge we have a water distribution to add value to the aws us. Through those characters taking responsibilities in the maintenance practices as was the capital upgrades that you will hear about another part of the presentation, the system is getting stronger and more reliable every year, year by year. The first subtask that we took undertook, is the new owner is probably the dirtiest task that was to examine the seawater channels or tunnels that can date they were to pump stations on the periphery of San Francisco serve as an emergency backup supply to the pipe network should we run out of storage. Over time, sediment and bay mud had nearly caught those channels up to greatly reduce the capacity of those stations. So with a very concerted effort by katie miller at the puc blood sweat and tears, took about 12 months we got the tunnels cleared and recovered the capacity of those pump stations. Probably, i would say the single most beneficial Maintenance Activity we did in terms of increasing the systems reliability. Mr. Breaks, have you tested a believe its pump number two at the base of van ness cleaned welders capital driven schedules under the easter bond when those are done we will but interestingly, theres a pump test plan for pump station number one thats never been conducted before. Grassley could charge the entire system from pump station number one which is Fire Department headquarters at second and thousand and five. What is the pipe network which we never tied before when is that scheduled for . Next month, soon. We just finished the capital upgrade were about to. I think it substantially complete. Number two queen about to start. Has that been cleared . Bs both tunnels have been clear but the nature of the capital upgrades and Capital Program are doing with the pumps themselves so the structural aspects. Pump two has not been tested yet we . Is been tested routinely by such award for two has that closed loop test just rainwater locally around immediate piping but weve neverto my knowledge, tried to go all way up the hill. At least recently. Doubt be scheduled . We will, yes. When the capital [inaudible] so second thing to highlight is the top of San Francisco literally at the top since the crown jewel of aws us the Twin Peaks Reservoir which is a 10,000,000 gallon reservoir facility. From that elevation we can charge the pipe network anywhere in the city with highpressure water without the use of power electricity which is of course very significant benefit in a disaster. Refill capacity of that reservoir is greatly upsize a few years ago. So this enables us to give that water coming in to refill the system that were utilized by the Fire Department. Effectively a spinning the storage available and supply available to the system. In 2014 was a five alarm fire in mission bay mud single structure highrise. The fired upon applied millions of gallons of water to contain that raise. There would have been a bigger dent were larger dent in the system storage had we not had this capacity. That was a single structure albeit a highrise. So this is very valuable in keeping storage in the system and we were pleased to see that come online. Over the years, we have been able to find leaks in the system that are keeping now that theyve been repaired the giving fire thousand gallons of water in the system that would otherwise have leaked out probably unnoticeable into the sewer somewhere. Thats why they were going on for so long. Now the water can be used, saves water, better for firefighting and indicative of just being a good steward of this water system. Maintenance of aws us is tricky. It involves specialized craft components are specialized they are unique. Youll get training on aws us some are ousted got to acquire the. The components are old and hard to get to but none of those challenges were not shy the puc with the Fire Department were not shying away from those challenges in using estimates used to knock it maintenance done. Were taking it on my finding the resources, and scheduling difficult work such as shutting down the street in the financial district just so we can accessible to their about or replace batteries. Mr. Meyerson will talk about the capital upgrades but of course thats pretty profound value in terms the performance of the system. Last, just to point out some of the remarks assistant deputy chief rivera, the more use this in our two departments. We comanage an asset. Its needed you need to know what they are doing and what we are doing 20 angelique also amends the system but i think the mou is more than the. Regardless of whether theres one department were three managing a w assess that document which is publicly available and i to have it recorded, represents the print for plaintiff to be taken care of the system. I think it has greater value in just a winning cup roles in response ways between two departments. The majority management, we maintain and still maintain spare parts on hand in the city locally so we can conduct repairs either plan repairs were emergency repairs. We also enough on hand to accommodate grace projects in San Francisco that required funds to be relocated. Central subway for example requires many many linear feet of aws as i find to be relocated to accommodate the project. Larger Scale Development projects make direct factory orders to the supplier massive amounts of material there. When its can and when its costeffective we refurbish the toes we have onsite that may be decades old but we are attempting to do what its costeffective. Transitioning to design standards, design is not Engineering Design is not a static field. Especially california seismic engineering. You want to take advantage of the best Available Technology for a w assess and we want to integrate that with a use through the use of a thirdparty objective reviewer was are already employing to a consultant. This is not an attempt to use other technology to save some money. This is a way of Getting Better technology and her performance into the system and using a thirdparty reviewer to make sure were using in the right way at the right time at the rate place. As tony mentioned, it goes without saying that the performance standards are what they are make only go up to thats not even a conversation were having and thinking the system is over design work trying that thirdparty reviewer were reviewers is what individual or company . Is to meyerson will talk about it a little bit but it comes in a couple different forms could essentially there are thirdparty consultants or academic folks debut the project from a distance peer reviewer if you will . Yes exactly. We been doing a lot when you peer review at this committee were familiar with the concept. So getting the other driver for some of the Design Change is to increase the number of suppliers that are in the marketplace. These specialized components over time have not yielded a big marketplace and the spiders are limited. Thats not helping. We want to change the design in ways that its been Peer Reviewed to get more people in the marquis that of audience benefits of it lowering price, increasing availability, shortening delivery time, which at times can meet 56 months for some of these components after you make a factory order. Thats another driver. Last, the many of the components in the old design the way pipes were put together involved leaded joints were led fittings as we call them. We would like to transition away from the use of lead in the water system even on portable system like aws as. So that does drive some of our design and it does render some of the components not necessary anymore. And thats just the last point to later on. No led fittings. Well, they are there right now. We are trying to not put any new ones and overtime replace them. But they are all the joints most of the pipe network. So that of course ill be here to respond as things go. We want to transition out of the capital upgrades to the system. The use of the easter bonds and thats mr. Meyerson zero. Thank you [inaudible] very involved and knowledgeable about the auxiliary supply system for many years. And some of the first people i was introduced to when i came to work your. They were integrally involved with the planning study done for easter 2010. We extended our consultant pool that way for our pipeline assessment. I apologize the second bullet should read, easter 2010, pipeline assessment not 2040. Jack baker from Stanford University and Michael Orourke from Polytechnical Institute assist us along with thomas over work and charles sullivan. Finally from easter 2014 and future bonds, we are in the process of making final arrangements with Charles Hawthorne to define the scope of work to assist us with those topics. The way our planning study involved, we sought to represent graphically the capability of the firefighting system gives a very supply system, to serve after an earthquake. The of an intact system to date after an earthquake. Theres likely to be leaks and breaks as we had to do a probabilistic analysis to determine what the performance and the system would be after a design earthquake event. So before any of the most recent easter bonds came into play, we did an assessment of the cities coverage and you can see in the current graphic thats been displayed. The goal is to move towards the darker blue colors which represent a higher reliability. So we divided the city into a believe it was 43 different fire response areas which roughly correspond to the Coverage Area from the individual fire stations that exist. We calculated how much water is delivered versus with the theoretical models told us we needed to deliver. We came up with a percentage for each of the fire response areas. Those were aggregated across the city to come up with what we call citywide reliability. Sue can see before we started the east upon citywide liability calculated at 47 . 27 the fires on series 3 not go below our goal of 50 reliability. So we embarked on easter toys and still underway. The graphic on display now shows that 42 of the projects are either in construction or been completed and six remain in design or in the bidding phase. The results that we expect for citywide reliability for firefighting have to after completion easter jordan are shown on the current exhibit. We will more prevalence of the dark blue colors and many of the fire sponsors have improved in their shading towards the darker colors. Citywide reliability grew to 67 and now 16 fire response areas are below the goal of 50 . We move into easter 2014. 15 of the projects are in construction were completed. Any remain in design were in the bidding phase. One of the key components of easter 2014 was an examination working to be known as a flexible water supply system or fw ss was discovered earlier today during this presentation. And some of the limitations of the department of that equipment have been described. So there listed here a little more detail and there were significant challenges to the concepts behind rolling out this system after an earthquake. Traffic control, lighting, Pressure Control various other problems that were identified and the Fire Department and the city Water Distribution Division determined that that would not be a project to pursue any further. So we are implementing to new projects. One is an extension of the auxiliary water supply system pipeline along victoria and holloway. Pretoria street and holloway avenue with the eventual hope that it could tie into the pipeline thats going to be built coming out of lake merced. That will pass through the Development Area in that area. When all that is incremented if its all implement it funded and implemented, it would not provide lake merced is water supply to the entire auxiliary water supply system which would be a big benefit for the system. Also another project that we are now going to institute is known as a [inaudible] pipeline runs through the sunset richmond areas could all discover a little more coming all. This is a depiction of the holloway victorian auxiliary water supply system pipeline could we will not be able to build all of it at this time with current funding. We will proceed from ocean avenue in victoria is that using the after uss money . Yes its a reason for the water system what was that . I dont have the exact numbers in the 20 25 million range. This is shown conceptually is which street we will go good with the maternal analysis to see victoria is exactly the vested with the notices of intent etc. But this is approximation of the people pipeline layout to be a long holloway avenue. Again well look at the various alternatives look of it is planning and design phases for that. Closer in towards the areas that are in sort of a lighter shade, that represents the lake Merced Development and adopt off to the left represents the lake merced pump station which exist today. Moving on to the pipeline, we started at Sunset Reservoir. Presumably and again well look at the alternatives on this, reasonably we rest on ortega north on 31st work to the park heading back e. On cabrillo st. Not all this can be funded immediately but we will apply funding from the easter bond as was from the water rates because a pipeline was describe a little bit more in the moment will do deliver on a daily basis to Potable Water to businesses residence and so on the features built into it engineered into it that allow it to be isolated from other Service Connections and provide allow it to be pressurized to a higher pressure see you get similar performance. To what you get with the auxiliary water supply system is the intent how do youwhat technology exists that you can isolate all of the sub laterals and all of the connections . A couple different methods. Theres some 12 hours activated a seismic event we have throughout the system out and motorized control values which typically install battery units nearby and they will be capable of running independently of the local pg e power source at that moment. Those can be operated to open or close as needed to isolate. Has anybody else done this . Has this happened in japan rather seismically challenge areas . In terms of controlling these hours or [inaudible] the of many of these motorized control valves within the system today that we operate and maintain i mean a cobenefit highpressure line along the lines are talking about . Not knowledgeable i can speak to whats occurring elsewhere. The was this concept is been peerreviewed by independent third parties mostly yes we intend to bring prof. [inaudible] to assess a was assessed a review. This is poor mans aws is because we can charge the rapier . Is that theyre mostly im not there to comment on that. Sorry. Onto the current slide pressure in the seismic hydrants can be increased for fire suppression. We have the ability to automatically and remotely isolate me pipeline from the bigger Service Connections after an earthquake. On a daily basis we do deliver audible water to residents and businesses as mentioned. We can leverage resources from couple different Funding Sources and it also improves spatial requirements under the street which tends to be a challenge sometimes. Getting all utilities in the streets. Before you get going we do have a question from supervisor fewer thank you very much supervisor kim. Yes, the question. What is the cost of this since which can potable the benefits pipeline . I see on page 16 of some costthese are in the millions. Is itso the whole for the richmond its 22 is that correct . Thats in the future. Thats a portion that is not going to be funded by the easter 2014. So, give me a second just to find my correct line. So the portable benefits pipeline for the sunset the contribution of the easter bond is just under 8 million. I believe its approximately 3 times that for the contribution from the water rates group. Hold on just one second. If the overall project its entirety is on the order 52 million but only portion of that is intended to be built using the easter 2014 bond funds. The rest would be captured by the rate payers . This abortion would be and if theres future funding from future bonds that can also be applied to that completion be so , sorry chairman can i want to ask one more question. So sorry im new to this and so when you say that this is from water rates, doesnt mean that just water users will be all of San Francisco water users will pay into this . Is not just some the areas it serves . Dave breaks again. We have the puc has funding from rates to repair and upgrade the Potable Water system we have a large Capital Program to rebuilding pipelines. We would use those funds to upgrade this pipeline to very high aws has seismic standards and produce a dual benefit thereby creating a nexus with the rate payer base because we have benefits in each area. So the funding is secured already . Well, so the budget debussy adopt just that the city does a twoyear budget. We are the middle of that cycle right now. The rates, the funding that is needed for this Capital Program actually i think it might be in fy 18 can that actually may be in part of the adopted budget. The Capital Program at the puc has is charted out for 10 years and thats bolted the rate structure which we adopt for many years at a time. So technically, some of this money may not have been appropriated yet but its in all of our capital planning. Okay. Thank you. So after completion of the easter 2014 work as currently anticipated, using the betrayal holloway pipeline as was the sunset portion of the sunset richmond portable benefits pipeline, we expect citywide reliability of 87 and now five fire sponsors will be calculated as being below the 50 reliability goal. How do you determine the reliability numbers . Theres a theoretical model as to how much water is needed various locations around the city. Based on design earthquake of 7. 8 san andreas, as well as density of the buildings, Construction Material and so on, a lot of that was developed by prof. Scott four and so we developed commands in each of the fire response areas and how many gallons permitted are needed to serve the theoretically derived fires . So the percentage numbers you see percentages you see are what portion of that water will actually the system be able to deliver. So its 50 is half the water of the present its all of the water. Those are individually verified by thirdparty reviewers . The lows the demands were provided by a thirdparty reviewer from a prof. Scott thornton is fairly unique calculation. So this is the professors seal of approval . Well, the lows would provoke by him and they form the basis of our planning study for easter 2010 and we continue to use those values in our calculations. The professor Scott Thornton has reviewed these ever increasingly dark blue maps and concurs that after the easter 2014 bond projects are completed that we will have this 87 city reliability . Professors hawthorne saw the maps the blue maps as they developed through the easter 2010 planning study. We refer to as cs199 which the contact number. We have not brought him into analyze the Methodology Since then but we use essentially the same methodology was developed with the guidance of prof. When we were working with him. Probably would not be a bad thing to have them take a look. He was may i have one question, chairman yes thank you. When looking at this chart on page 15, and this is after 2014 and looking at firefighting reliability am looking in my district and quite frankly im looking at my home that this spot here in the Richmond District remains this light to color. I am wondering what does this color legend willie tell us . When you were telling us you look at how many gallons of water new permit, you look at density of looking at construction of materials, what is it that in my neighborhood im still seeing this lightcolored blue when most of our homes actually i would construction, please very close to each other,highly president ial with businesses . Why is thisso i look at this color blue, and again, im sorry this layperson looking at this, but it tells me that there isnt as much protection as the dark blue areas. Tell me why in that section im seeing this bluecollar and what does that mean in comparison to the lowest level blue . Just how unprotected are we there i guess thats what i question is. Well, a lot of questions that identify can answer all them. Okay. The answer i like if it makes it easier, the answer doesnt have to be immediate but you can always email me the answer also. If you dont have that information or email the Committee Also but i think my main question is, when i look at this color, blue, in this segment of the Richmond District, what does it mean in terms of reliability in case of a fire . Why is it this color . House a change in the dark blue actually and was the mechanism to change it up more reliability . Those questions if you could answer those that would be great and because i think that would give me sort of a overall picture about this section of my neighborhood. Thank you. I will do so. So the next slide shows some projects that we recommend for the future. As a result of our existing Pipeline Analysis are some recommended projects that could be pursued. There some additional aws ss pipeline that is recommended and you can see the costs there. There also some structural includes the physical plants. Some of the tunnels of the reservoir and so on the weve identified as needing some improvements. So the projects limited to land Development Projects. So what improvements are necessary to support the various Land Development improvements around the city and what would be the contribution to the bond funds to that were the developers funds . Finally additional construction for portable benefits and the mclaren park area and the additional pipeline that we talked about earlier in the richmond area. So this map provides the reliability for firefighting after those future projects are implemented. Uca citywide reliability of 96 and zero fire response areas below the goal of 50 . Mr. Meyerson, is it my imagination, or in looking at that slide, 16, is the highpressure aws has pipeline less expensive than the cold benefit pipeline . Or is this a function of distance . When im looking at your diamond street for 4 million among holloway pretoriabased two for 11, University Mound west for you 11, and then looking at mclaren at 51 million, richmond at 22 million, it would lead me to believe that the a w ss highpressure is cheaper but perhaps an issue of linear feet . I like to introduce and summons project manager for [inaudible] there are consultant to the planning process through for easter 2010 and easter 2014 to answer that i love to hear from and before we do that the sunset code benefit pipeline is different than the future richmond the pipeline. Is that correct or are they one and the same . And bring that microphone down. Thank you thank you supervisor. They are the richmond, the sunset richmond totality includes the richmond pipeline. One pipeline going to be designed together all the way across the only question is, the level of funding for the initial stage initial construction how far that gets. The first question was is the costthe cost is higher for aws this pipeline. Its a function of distance so the diamond street extension is a relatively short extension from aws us up the hill into the dining area. Diamond district. What is the difference furcal benefit versus aws s per linear foot . I dont know what the top of my head. Sorry. No problem. Could you please, repeat poster foaming im sorry mark sweet and simons ms. Simons, relative to the second question which is whether that december single benefit pipeline was same or different, and the one on slide 16, what was your response to that . 16 shows the richmond extension the entire project for 52 million is both sunset and richmond. So is shown on slide of 13 is the whole project and shown on slide 16 at 22 million is about half a project . Well is less than half, yes. Part of the reason im asking this is well with me ask you this. What is the source of funds for slide 13 . Theres approximately 1 million from easter 2014 and the balance which i believe is approximately 3 times that amount would come from the water rates that dave briggs described earlier. Okay. The balance of the approximately 20 25 million going to use for fw ss is going to victoria holloway. Is that correct . What im trying to figure out is, that this cockamamie active uss skin you have abandoned. You have money left over. That money were now going to use for nearterm aws has projects at holloway victoria and for a portion of sunset richmond. Is that true . That is correct. The breakdown of that is 8 million to a portion of sunset richmond and the balance in some unspecified amount to holloway victoria . Portable benefits through sunset boat line is proximally 7. 85 million. The victoria holloway is the same amount to 7. 8 5 million. Then to place a pump station at University Mound to augment the pipeline thats intended to go in there is 4 million. That is separate and distinct from slide 16 pipeline for University Mound in the amount of 11 million so that is the pump station. So approximate, you said 60 million between victoria holloway and sunset richmond, plus an additional four for the University Mound pump for total 20 . Correct. Okay thats cozier 2025 guests on the aws us. Next question, which is along the lines that supervisor fewer was going down which is i dont see how you end up with your liability numbers after easter of 2014 in the other richmond and outer sunset assuming that you have only partially funded the sunset richmond cold benefit pipeline. I could see how you would get there in the future projects but insofar as that is only partially funded, it seems like you got to dark blue to fast. I mean ive no idea what im talking about but thats the way it looks. Ms. Simons tijuana comments on that mark sweet if you look at the slide but its 13, that shows the lineup into the richmond, pink visit nation on that which may be hard to see on the tv, is an indicator of how far we think we can get with that in 2014 and so we do actually get into that fra that westernmost richmond fra. So we allow that to be the full score and to answer supervisor fewers question, until we cross that redline on the map we dont get to your fra. So youre in between the aws us which ends on 19th, believe. One sound 12 and you need another source of water supply in the richmond. So we can get you from sunset or we can get you from the aws us and 12. So let meim sorry yes so i dont understand how this makes sense actually from the reservoir to pump water over to this area but how would this coverage actually meet my whole district excrete i know we ended i think opposition not to have with you is specific to my district is in looking at this map the youre giving us i can really understand how you think is going to be adequate water coverage in case of an emergency in the outermost richmond area. I know that right now, i see this dark circle rate out here this dark area on the westernmost part how is that taken care of in isolation of the rest of my district . To me is just odd, yes maybe thats a conversation we need to have. I actually, look at this upset over bit my neighborhood is going to be in the event of a big fire. I just want to look at this. Im not assured that my neighborhood is safe and prepared if theres a fire. I look at downtown i am sure downtown is getting all the water coverage they need. But i look in my district i am seeing this is very sparse good read i dont know the signs of it but what your responses have been also is not actually alleviating my anxiety about it. Yes. [inaudible] good to see you. We definitely need to have a briefing with you about your specific neighborhood to go over all the various projects we do have that scheduled with your staff could fortunately we were unable to get you before the hearing will suddenly schedule that but i want to point to the slide nine is after the 2010 and you can see that we then the score on the other richmond is still the two letter blues and then we state in 2014 we have 23 total projects so if we go back to slide tensor of those projects and can go to every single project that were doing, their projects that obviously bring up the scoring that Outer Richmond that are not necessarily this potable cold potable benefit line were talking about. So those 23 projects admittedly bring up this court if we slip back to slide 15. You can see the Outer Richmond score went up. I dont you think you may project and that is just as pipeline from the Sunset Reservoir is bringing it over so is that outer score aws us . The mark sweet the outer dark area in the richmond which is furthest west systems probably yes book about you all the projects within that neighborhood. I have those pretty but will meet with you why that outer score went up so when the human the with make and you bring the answers to the questions that i asked this gentleman . Yes i have them written down two things i want to drill down into the sunset richmond cold benefit pipeline. You said that the entire cost of that from the reservoir all the way to what is that, 12th queen ugly to cabrillo cabrillo, yes. Spears is how much money . Im talking i was simons referred to as the pink line which is phase 1. Im not doing the math off the top of my head but it would be four times the third 2 million. Approximately in the neighborhood of the third 2 million good we could come back to you with the exact number got it. The additional 22 which is in your future project on page 16, takes you from 43rd down cabrillo 2 24. Is that correct . If im getting the streets for you but phase 2 29th, believe it says. Okay. 29th, im sorry. Again, this is noti dont do this for a living and you guys do so take everything am saying with a grain of salt but be look at the distances are for me to understand that you can get fromall the way up to ortega always on 41st all across the park four 32 million and then a portion of it which is like less than a third of it causes additional 22 million. Is that because its cost escalation in the out years . You are very correct. This slide did not get change. The distance on the side that change yesterday and the number did not get change. So you are correct mea culpa no worries thats what these hearings are for. Its all fun. Heres the larger context which is thats called wade is supervisor fewer said just write it post on general six earthquake we built out be side. Its robust and i think were all delighted that you guys abroad it into the dawn of the 21stcentury the fire and pc are working together. Hats off to you. I mean it totally sincerely. A year ago we were going to deal with the gaps on the west side was through after the uss so todays hearing actually signals a complete turnaround and the sharon is that rather than using this 12 inch hose we are going to go down the road of cold benefit pipeline which was not what we were talking about a year ago. So the reason for oversight hearings that this is for us to ask questions and secondguess you a little bit and have a conversation that this is a seachange in a year but how were going to do with the west side and then we start asking the questions that we talked about a little bit a year ago which is okay, tell us what your analysis is as to why we are choosing go benefit over fw assess which i think we understand active uss sound like a good idea but would take a third army to deploy which probably was not going to happen in the middle of a huge else will fire event posted huge earthquake. I think we got that right but have we done any analysis as to why go benefit versus highpressure independent aws us extension with the cost benefit is on that . We did in the original planning study. Our initial three alternatives included one that had hyperextension through this area. Aws us by the extension to this area. The total capital cost that alternative was in the water of 600 million. Something like that. When we presented that to as the puc they said that is not going to happen. To extend aws us throughout the entire city so they recommended management and sectoral teams recommended we look at options that would find a nexus of where the portable system also needs to be improved and this is an area where the richmond potable system transmission lines need to be improved so this is an area where we can do both things with one project. Maybe. I mean, look you are pioneering it sounds like Uncharted Waters no pun intended and i think we should really have a real policy conversation about whether or not we should bite the bullet and talk about half 1 billion investment for the west side. Book we have a seawall to fix on the east side of the city in the district that supervisor kim and district i represent that to the cost phase 1 of that is going to cost on the order of three 400 million. Voters from the westside are not going to see anything out of that. These are the conversations that policymakers need to have which is should we bite the bullet and start doing more aws us expansions further to the west . This is been an ongoing expense of conversation for a century and 84 in the 90s and 2010 and 2014. So i would like to, if i may respect we say, secondguess whether or not you should be going down the cobenefit road and particularly, the thing that so great about the aws us system except for where you have to dredge, is that it as you said, a gravity fed system. Its completely independent and after 9006 style event thats what you want to have. I worry about backup batteries and what have you that you need to maintain because we have seen what happens over time despite the best intentions when things dont get maintained and the outflows dont get dredged. So for my money, i prefer to have supervisor fewer and supervisor tangs district with their own aws a system if we can afford it. As the conversation worth having. So just want to leave you with those highlevel thoughts in one year weve completely abandon fw assess and moved to a new thing. Thats keep our options open and on the table i like to know what is the difference in cost . Is it really as cheap as an order of magnitude of 10 . Is a 52 million versus a half 1 billion . Is that true . Has that been independently assessed . That would be held fully maybe my colleagues would indulge me we can have that hearing at some point in the nottoodistant future. Supervisor peskin i completely concur and agree. I would like to look at all options of this is a matter of just cost but im talking a matter of human lives of people in my district. So i dont want my district to be part of some sort of experiment or never been done before and i want to make sure that the people in my district and lets not forget, theres 80,000 of them, that theyre going to be protected and i want to emphasize again other than older part of San Francisco. Homes are built in 1922. Theyre all wood frames on a very quiet day i hear my neighbors flush the toilet could this is how close are names arent together good i would make sure with the ultimate protection in case of a fire. My husband a First Responder after 19 a. M. Earthquake i do not see him for three weeks and i think what can be seen a lot of people in my district for three weeks afterwards. So we will have to be with to declare ourselves. I want an independent water system that can actually deploy it immediately and we will need a lot of what he is saying this back up stuff. We have to depend on ourselves first 94 hours and we acutely aware of that. Were 96 hours so we are completely aware of that. I want a system that is independent for my district because quite frankly i think that we also pay property taxes we pay high property taxes we pay into the water bills. I mean, this is a matter of cost but sealed [inaudible] really had think its a matter of efficiency so lets not wait this with money but lets human lives and adjusting to emphasize that the largest population that is going in my neighborhood are seniors. Many of them are homebound and actually not able bodied. We have a very vulnerable population is growing in my neighborhood. I just make sure theyre protected. Thank you. Yes thank you supervisors. We certainly appreciate your concern especially regarding the westside. Our goal if there look our final slide must live 17 from that is the final slide you will see all of the richmond completely dark blue completely highest reliability. So start the discussion me to have this was the best way to get us to that dark blue good thats a discussion subject of supervisors want us to have. So they had a hearing and individual briefings will want to get to that dark do what is the best way of doing and what is the cost . Spews this was way down the weeds i apologize but i did bring up to mr. Briggs which is summary showed me a picture of some connections that an oldies were done with tie rods in the current days are not done with tie rods. Is that being a thirdparty independently reviewed . I realize this is serious financial but insofar as its on my mind i want to know if prof. Of workhorse hawthorne has said, yes this is a good idea . Spews outermost is we which are referring to are usually tie rods are used in pipe connections to ensure the principle apart they didnt accelerate. Its a form of the strange and engineering speak and that although the maybe different ways of achieving that axial restraint in the linear insulation pipe, we are not changing the performance. Inmate physically look different and katie miller or others may have some specificity on that but i need a little bit more information. Im just a visual person so these tie rods used to be as linear connections on the outside with collars and tie rods on the outside and lately, since the puc took over those joints dont have those tie rods. I just want to determine that some independent thirdparty has said that they are as well link and seismically resilient as the previous incarnation. Katie miller is here with puc to give you some response to that. Good afternoon supervisors. Im katie miller with formerly engineering manager at cbd starting in 2011. When the aws us was transferred. At that time, the design of new [inaudible] of aws us i was without tie rods and it didnt come to our attention until we took over the Design Projects and we were surprised that there were not tie rods in their befitting. There are still tie rods on all joints were all anyplace there is a fitting anyplace theres a valve, anyplace there is a deviation of direction but for the street runs, tie rods were not being used. That is the way the design standard came to us from dpw. We are now having a thirdparty review by a consultant. They are completely looking at the existing design were developing the design criteria that is at or above beyond more expensive than what the former design criteria was and we will have a full evaluation of the tie rods in future design. That is peerreviewed . Yes that is correct thank you. Okay. Thank you so much. To the department for presenting on this item. At this time will open up for Public Comment on item number three. I do have one speaker card. [calling Public Comment cards] i see 2 min. Here. Is that the amount of time i have . Okay. I will be if you need more time we can extend it thank you mr. Peskin. Pres. Breed, im glad to see her as much as your bomber fire commissioner this is definitely a fire related issue. Chairman kim, thank you supervisor peskin, brief background. My name is thomasi am in been a Richmond District resident for over 60 years. I cant seven years [inaudible] 32 years in the San Francisco Fire Department saw been a Public Servant for 39 years of my 67 years. I guess ill get right to the point here. In addressing the issue that supervisor fewer raised which is how do you go from light blue on the charge to dark blue . If you look at the cobenefit pipeline in the Richmond District which extends from 42nd43rd ave. To 20,000, i agree thats completely incongruous that this one pipeline without workup hydrides hydrants will be on the pipeline we dont know what kind of pressure be on the pipeline but am willing to bet its not going to equal pressure that is in the [inaudible] that goes to three and 23,000 pounds per square inch. The way i suspect and i would stand to be corrected by the people from the qc that theyll do start blue in the other richmond one tie such a pipeline with the unknown types of hydrants is the relying on systems because of the many systems into the richmond in addition to the few that were there before and i might say on a compliment them on the job theyre doing on the system. I know were the systems are being built in the city the time has been continued thank you. But the problem with the system the system is a great backup device. Its definitely making century device but its great backup device when all your water the systems failed which will be the case in a part of the city does not have the exhilarating water supply system. If we are depending on hardening some the municipal means off which come lowpressure hydrants on every corner in the city, we have to understand that also coming off those means are the Water Services going into every building in the city. 10 of the stopoff in an earthquake which is not implausible, we will have no usable firefighting water pressure in the lowpressure hydrants. Which means any area that doesnt currently have or have in the future highpressure a w ss hydrant with depending on systems. Systems as i said a great but a system requires two fire engines for every fire. One at the system and one at the fire. One to take take the water out of the system. One of the bar to add pressure so the water is usable for firefighting. Okay, i richmond outer sunset combined with promptly 42,000 structures. Mostly residential. Many are 60 or 70 years old but right up against read each other know fire resistant. Everyone took one of those 40,000 soldiers have gas pipes which is as old as the buildings. If one in every 1000 of those structures develop a ghastly it 42 potential simultaneous fires in the other richmond and outer sunset did the math is not that hard. We are left with some parts of these areas with only systems to use. Two fire engines require for the system. Three Engine Companies in the Outer Richmond, three Engine Companies in the outer sunset. Holy fires a gun fight from systems . Three. At the most. The other 42 potential fires if you think the math is possible, according to go unchecked. You have about an hour after major earthquake to establish a fire lines. If you dont do this, you will be overrun there will be multitude of collapsed buildings in major earthquake because the San Andreas Fault runs 1000 years off ocean beach. In these collapsed buildings will be people who could be saved if the incipient fires before two fire trucks that i spoke about can be put out were not down as we say the Fire Department in their incipient stages. If not you of all blocks going at a time. And thousands perhaps, tens of thousands of people trapped in collapsed buildings will burn to death. Now i commend the Public Utilities commission for the work theyve done so far on tweet bistros are in position number one, pump station number two. I do hope youre dredging and take the cm takes in not letting the silt buildup again because i need to be done on a rigorous schedule. For pump station number one and two. But to go with cobenefit pipelines in lieu of extending the age of uss is the voters were led to believe would happen in both 2010 2014 is a recipe for disaster. Tens of thousands of people will die if we dont have reliable immediate highpressure highvolume water source it in the 15 neighborhoods where does not now exist, we can talk what the cost of this although i believe debussys figures might be a little bit high. Im sure that something the supervisors can look into. Im not picking out one project as being good or bad or otherwise but lets look at the cost of the tunnel for Market Street to let say chinatown for lack of a more precise location what is the cost . I dont know. Can some of you might need. When under nine, 200 million. I honestly have not paid attention to that. The subway. Central subway. [inaudible off mic] a lot more than the cost of extending the age of uss to the 15 neighborhoods where does not now exist but if we dont do that if we dont extend the age of uss into the 15 neighborhoods, you will lose a major portion of San Francisco and you will lose tens of thousands of citizens who we burned to death. I was the captain of the engine, and also the Truck Company at 26 and geary for 15 years. Was the captain of the fire boat for five years. Primarily purpose of the fire boat is to supply the age of uss with Emergency Water in event of an earthquake. My last assignment headquarters i had the job tony rivera has now as assistant deputy for support services which oversaw water supply when the 2000 and bond issues past i was newly arrived in a position in a great hopes for working with the puc but would have seen in the past recent past is weve gone from what was sold to the public in the 2010 2014 bond issues which is which and extension ocean avenue etc. Such a addressing the need in the 15 neighborhoods were doesnt exist. Todont worry bout that will drop 12 inch hose off the back of a flatbed trucks even though the virtual impossibility of me never tried it. D meinrad cannot clean i will. I would suggest im sorry would you mind wrapping up isnt coming upon the supervisors of abusing another nonsense go back to something that been lacking in areas of the city that are far too large for far too long. Thank you. Thank you so much. Is there any other Public Comment on this item queen seeing none, Public Comment is now closed [gavel] supervisor peskin is the author of the hearing sponsor of the hearing. July test to continue this item to the call the chair please motion to continue this item to the call the chair and we can do that without opposition [gavel] thank you. To the puc and the Fire Department being here today for this item with the board to the continued conversation. Also thanks to supervisor fewer for attending our committee hearing. Adam clerk please, call the next item item number six a ordinance authorizing settlement of a lawsuit in Eminent Domain fight against the city and county is San Francisco against line rental b was before take a motion to getting closed session will take Public Comment on this item is there any Public Comment on this item before us queen seeing none, Public Comment is closed. [gavel] motion to go into closed session so moved. We have a motion we can do that without opposition. [gavel] we are now back in open session. Can we have this City Attorney . For the record proposed settlement with a positive recommendation and fortitude aboard. Thank you. Committee can we take a motion to not disclose closed session. We have a motion we can do that without opposition [gavel] mdm. Clerk any other items before the committee. Theres no other items. Seeing none, the meeting is adjourned. [gavel] [adjournment] good morning, ladies and gentlemen. This is a regular meeting of the regularly scheduled meeting for the budget and finance committee meeting. My name is Supervisor Malia Cohen . Supervisor tang is excused for todays meeting. I would like to thank sf govtv for todays broadcast. Madam clerk, any announcements . Clerk yes, please shut off any cell phones or any devices. Speaker cards should be submitted to the clerk. Items will be appearing on april 4, 2017. Would you like to take a vote on excusing supervisor tang for todays meeting. Yes. Do we have an approval to excuse supervisor tang. That is approved. Madam clerk, please read item 8 and 10. 170214 [purchase and Sale Agreement lendlease development, inc. 30 van ness avenue 70,000,000] sponsors mayor; kim reading code . Supervisor malia cohen all right. Thank you very much, supervisor kim has joined us today who is the sponsor for these two items. I will give her the floor now. Supervisor jane kim im only the sponsor to no. 8. Thank you, chair cohen and members of the budget and finance committee. We know this issue very well. This has been before the board of supervisors for some time. This is regarding the sale and acquisition of 30 van ness owned by the city county of san franciscans. In september when 2016 when we first saw the purchase of the acquisition of the site at 15 Affordable Housing at 80 million Purchase Price. The proposal we have before us today, while a reduction of 70 million. Proposition which passed june 2016 which requires developers to now buildup to 25 inclusionary housing which would include 15 at low income with Affordable Housing and in addition to 15 at 100 ami. In 2015, i did pass a proposition, a ballot measure proposition k when we said or build on public land that we should be building maximum affordable minimum households on site. What im proud of today is that not only has the developer committed to build and also committed that if the city would decide to increase to provide any up zoning that they will be able to commit to 33 of Affordable Housing with on site in lieu of fees through the market octavia and van ness special use district plan. It has been important to me that we are able to use every resources that are available to us to keep building for San Francisco residents here whether they be teachers and nurses or Hotel Workers and restaurant workers. And even in case where we are also prioritizing the need for revenue to build much needed office space which is equally important, what i am supportive about this feel is this a good balance of making sure that we are maximizing affordability and important need in the housing crisis that we are experiencing here in San Francisco today without compromising the revenue that is much needed to build the Office Buildings for several of our City Departments and to provide more efficiency in the delivery of City Services. What is also important about this deal is that we are able to achieve the 25 affordability without any city buyback or discounts. The original deal that came before us december 2015, had offered the city to buyback units from the 15 up to 2025 or 30 , but at a dollar amount that we thought was incredibly high. Im looking for the number right now. Well, i will find the number later in the points as we talk further about it. But anyway, colleagues, i do ask for your support on this item. I know that we have a presentation from department of real estate before us and then our presentation from the budget and legislative Analyst Report. All right. Thank you, before we take real estate, we are going to hear from bla, item 7 and 8. Sponsored by the mayor and supervisor kim. 170213 [purchase and Sale Agreement sf prosperity 2, llc 1660 street and 1680 Mission Street 52,000,000] sponsor mayo good morning, supervisor kim, you would like me to go over item 8 . Yes. If you would like we can hear from real estate. Im prepared. Madam chair, supervisors, on page 23 of our report, we know that San Francisco prosperity as the highest bidder agreed to pay the city 52 million to purchase 1660 and 1680 Mission Street and pay tax of 55,000. In addition they will pay property taxes in 1634 in first year and transfer taxes and property taxes are deposited into the citys general fund. Therefore the city will receive the sales price and transfer taxes of 53,560. And will receive the annual property taxes in the first year of that estimated approximately 600,000. On page 24 of our report while we know the appraised value of 54,800 achieve the purchase prize, the estimated taxes of 1 million should be added to get a total value of approximately 53 million if you consider the transfer tax which is normally paid by the seller which is the city in this case, the buyer is paying for it. We also note that the proceeds of the 52 million from the sale of 1660 mission and 1680 Mission Street will be allocated to the pending development of the new city owned building at 1500 Mission Street which has an estimated project cost of 439,265. And the sources of use for that cost is shown in table 2 page 25 of our report. On the bottom of page 25, we note table 3 and table 3 is on page 26 of our report which shows the total annual rent and operating cost to be paid by the city of the first year of the lease back is 47,000. As you know this deal has the lease back provision where departments in the city will remain and 1660 and 1680 over an initial 3year period and 21year options. They could be there for 5 years. On that action on page 26, under the proposed lease back. Dbis rent and operating cost for 1660 Mission Street will increase by 1,281,210. And public works cost for 1680 Mission Street will increase by 1,102,590 for the first year for the total additional rent and operating cost in the first year of 28,383. As a result, its going up 107 . We also note on page 27 that chapter 23a of the administrative code prioritizes the use of property for Affordable Housing because the funds of the sale of 1660 and 1680 mission are not used for Affordable Housing and this is a matter for the board of supervisors. We state on page 27 to make an amendment to add a finding that the Public Interest or necessity will not be inconvenienced by the conveyance from 1660 and 1680 Mission Street as prosperity and include that as amended to be a policy for the board of supervisors. We stand for questions. Thank you very much. Did you want me to also go over item 8 . I would like you to go over item 8. We called them both together. In item 7 you have amendments . Yes. Thats just a technical amendment. Okay. The board has to make that. We will take that amendment at the end. We would love to hear your presentation on item 8. On item 8. Supervisors, i refer you initially to page 34 of our report where we note that in addition to the 70 million Purchase Price received by the city, the city negotiated for a lease to pay the citys one time transfer tax just as in 1660 and 1680 Mission Street which i stated is typically paid by the seller in San Francisco. That is across 2,100,000. And transfer taxes go to the citys general fund. Therefore as shown in table 1 page 34 of our report, the city will actually receive 7,210,000,000 of the proposed value. And will pay property taxes in the first year and again property taxes would accrue to the citys general fund. We know the city maintained and approval from 69 million to 74 million. That is explained on page 35. Land lease for van ness for residential and retail uses while paying the city transfer tax and while they pursue primarily Residential Development on this site. Because this is a purchase and Sale Agreement and not a development agreement. The actual use specifics of the property is not known. We emphasize that, supervisors. What is before you is strictly the purchase of a Sale Agreement. If you approve you are authorizing the city to sell this property. What happens in the future to this property is not known. Has not been finalized, is not known and your action today cannot determine what that will be. That will be sometime in the future. On the bottom of page 35, its shown in table 2, if the city sells 30 van ness at the proposed 70 million price, it will result in a 44 million net proceed. That is because there are an existing debt of participation which has to be paid. While you will be authorizing the sale of 70 million. The city would get net proceeds of 42,545,000. We note from the report that 42 million from van ness will be allocated from the potential developer from the building like in 1660 and 1680 Mission Street and i mentioned the estimated project cost of that new building is 439 million and that is shown in table 3 on page 36 of our report. On the bottom of page 36, shown on pages 34 and 37. The city will pay 139,990. 50 of lendlease to remain in van ness. This deal is the same as 1660 and 1680 mission where there is a 3year lease back and 21year options to permit departments to stay in the buildings while the new City Office Building is being constructed. On page 38 of our report, we note that the proposed resolution would approve the sale of 30 van ness for 70 million with at least 25 affordability which is 17 million or 19. 5 less than the originally authorized 87 million amount. As you recall, the city had this property up for sale at 87 million and rejected that offer by the board of supervisors as you know. However, the 80 million and 70 million sale offer were negotiated before each of acquisition in 1993 for its current use. 75,000 square feet. And acquired. To hsa in 1965 for about 5 million. And was transferred jurisdictionally to public works in 1988 for approximately 105,000. So pretty good deal in terms of our acquisition versus our sale of that property. The timeline on this effort just a quick recap. For 30 van ness, i think its important to just get a little history on that. It was appraised for 1. 5 1. 5 million to determine whether the property made sense for the city as a part of restacking our portfolio in the civic center and as the budget analyst has gone over, the board took their action back in 2015 and really the key points here are what we her from the board of supervisors and put back on the market in after effort to secure a minimum from the buyer. We need a better total value for the city and we needed to record that affordability to go with the title so it runs with the land forever. We have no contingencies regarding affordability and we needed to have a process to resemble the process for clarity to prospective buyers of the property. So looking at whats before you now as noted at the 1660 and 1680 Mission Savings of this figure. For 30 van ness that is to contemplate for Development Opportunity combined with the 102 million in Gross Revenue for the city. That was our yield target when we first put together what we call project chess and put before this budget and finance committee 3 years ago the idea of pursuing a replacement property for these offices that are more resilient and most importantly provided a one stop permitting center opportunity. As mr. Rose noted, the transfer tax here which is typically paid for by the seller we have reversed that dynamic paid by the buyer of both and you see the total amount of revenue there in addition to the 102. We have a very favorable commission on this represented by the sale of mission and represented for the sale of van ness. Each at. 5 or less of the Purchase Price which is unheard of in the commercial property market. The lease backs are for a 3year initial term. We anticipate after 36 months our destination site wherever that maybe will be available for move in. In case there is a delay we have negotiated 21year options to remain on site at nominal increases at your 3 increase per year, a 30square foot cost at both of these locations. We believe that is an extremely favorable rate at the center and the budget Analyst Report puts that out at the low 50square foot. We are at 70 a foot just a few blocks away. To give you an idea, we have a very favorable lease back. Its more of a currently paid and all of the pro forma chess. You can take another look at when we bring forward the ratification for the process. That will be coming later this spring. Lastly we have deposits for 1660 and 1680 mission for 32 million and a total of 60 million. Due diligence has been completed with respect to van ness. I think that is really an important point here with previous agreements and potential agreements did not have complete due diligence. That means they have made it through looking at the seismic performance of the asset as well as the seismic condition of the land later issues and in addition to the bart tunnel which provides challenges with respect to redevelopment. I will talk about Affordable Housing. So, as supervisor kim noted we have the prop c requirements of 25 affordability. This restriction is in the psa and also in the deed. It maintains this as a minimum required affordability level and there is no comfort given to the buyer of van ness if the board of supervisors should choose to lower those limits to say whatever 19. 2 in the future. This buyer is by deed restriction required to be at 25 affordability. If the board should choose to raise the levels of prop c to 32 at some point in the future before permits are pulled and obligations are made by the buyer, it raises to that level. So it is a floor, a firm floor. This is also consistent. The development thats being proposed by a land lease is consistent with the hub effort thats on going with the Planning Department. We are joined here by colleagues from planning who can speak to that if you have questions about that conformity. Future zoning could also increase that Affordable Housing as supervisor kim articulated in her presentation. We are pleased that we have a path to 33 here that is on the act of the developer. That is an important dynamic change that has been negotiated between what the board saw in late 2015. Lastly there are additional impact fees as a result that this is in two special use districts on top of the fee obligation that the developer is making on the agreement. Lastly, a comparison in what you saw in 2015 and today in 2017. So as noted by the budget analyst, we have a difference in the pricing from the 80 to 70 million but most importantly we have a difference in the affordability level from 1525 . Whats that value . We estimate that value to an incremental increase of 104 affordability to 1238 million. That magic number that you were searching for is 641,227 per unit price in california originally put forward as a cost to buy a middle income unit taking it down from market to affordability. We are looking at a much more modest number to drive those numbers. Thank you, supervisor kim has a question for you. Supervisor jane kim i was trying to job my memory on those numbers, do you remember what a. M. I we were considering . Thats correct, we were looking at 120 minimum. What we are looking at today is 100 ami. Thats right. At a 10 million reduction if you want to put that in 250,000 out the door at a lower bmi than the original deal . Thats correct. I think there is office of housing and Community Development staff would support that as being a fantastic opportunity for the city to yield more Affordable Housing. And again, as noted transfer tax stays as a buyer obligation. That concludes our presentation for you. Happy to answer any questions that you might have. Thank you for your time. Thank you, supervisor yee has some questions and i have some questions as well. Supervisor norman yee thank you. Let me ask about the the terms of the deed, i guess. If the terms include the affordability piece in the deed, then, lets say that the original buyer decides not to just build anything for a while and then 15 years from now the property is worth 200 million. Its easy to just sell it. So the new buyer would be obligated to build the affordable units also . Thats correct. That is why it is important to have this as a deed restriction and not just a contractual agreement between buyer and seller so it is on the deed, runs with the land forever for whenever this property maybe developed. As the budget analyst noted, we are not talking about a development, we are talking about a contract for real estate. There are certain things we could not do, but this is as far as we believe we can push that envelope to ensure when and if development happens we can guide that development and its affordability levels. Is there i know this is sort of a crystal ball question, did you get the sense that the buyers would be motivated to actually build in the few years because, the deal sounds great, but if it is not built, for the no deal. The deal is that weve got nothing. It is a great question. Its the factor that we look at those potential buyers, not only the capacity to close the transaction that is important as the city as the seller, but also the likelihood not only the development but a Compatible Development that this city would be proud to have on this corner. We are pleased that land lease has shown tremendous interest in this property. They have put their best resources on this property who are joining us here today in the chamber, and so we do believe they want to put their best foot forward on this landmark location. I mean, this is an iconic opportunity for land lease to really make a claim here and if they wanted to do business in San Francisco, this is their opportunity to do right by the city. We feel comfortable with the developer and the opportunity. The other question i have is in regards to up zoning, is that what its called, up zoning, making the height taller. So you move from 25 to 33 possibly. So, for the difference, that 8 difference, what affordability level are we talking about . Would it be all of it being middle income, all of it being affordable to the low income. Im just curious because right now we have a break down of 1510. What is the 8 going to do . In pure numbers, lets just assume there is 400 units of residential, thats just a number, but it helps if we actually think of how many units are involved. That adds another 8 . So thats another 30 units of Affordable Housing at 100 of ami. And thats a tremendous opportunity for this city. So thats the raw count of units that this would entail. Yes, i understand that account. Thats not my question. Okay. The question is of the 30 something units. What affordability level are we talking about . Is it for low income, middle income . That maybe more of an appropriate question, we were talking about the offsite in lieu fees should we provide the off zoning and shift the 33 , is that the question, like where would those dollars, what type of housing would those dollars be dedicated to building . I assumed that it was going to be built onsite. The commitment here by the developer is to comply with proposition c which requires developers to build 25 Affordable Housing on site. 50 at an average of 5 of average Median Income and the remaining 10 at 100 of ami should they build rentals. The ami is slightly higher if they build Home Ownership condos. The remaining 8 which would allow to achieve 33 is paid through fees. They are already paying market octavia fees and which will be an equivalent of 8 and those dollars will be deposited to the citys Affordable Housing fund and making sure those fees are deposited closely in the neighborhood into building Affordable Housing. In that case it could go towards housing for the affordable homeless or Affordable Housing. That actually hasnt been determined yet. If director lee wants to add anything to that, hes welcome to. Mayor edwin so there is no possibility that the developer would build 33 on site . I mean, we can ask our project sponsor. In our discussions what we had agreed to was 25 onsite Affordable Housing, and in the final 8 coming to the city via an offsite inclusionary fee. That would be based on the citywide return. It would be purchased by the Mayors Office of housing which grants towards a wide variety of projects anywhere from housing for people at 0 percent of average Median Income and really up to 100 which is more variable. Its typically between 055 ami. My question is if we were to push it to be onsite, if they chose it to go onsite, then the question is the same question, if they build 8 onsite, would you be for those that are at 55, for the low or the moderates, what are we looking at . That option is not only table to build that onsite. We havent discussed those ami levels of those units. If they cant build it onsite even though they want it, is that what you are saying . No, if they want to build onsite we would be thrilled. But what is included today in the 70 recent sale and acquisition agreement is that the developer is committing to building no less than 25 onsite fully complying with proposition c which was passed by the voters on june 2017. So they are committing to 25 onsite which is more than what the commitment that was made in 2015 by related which only committed to 15 onsite. The additional 8 was something we had negotiated, acknowledging that 30 van ness is publicly owned land. Under proposition k we had agreed that 33 for Public Housing on city owned land. The developer agreed that if we were able to up zone the site which i am committed to, that they would be able to provide additional fees to allow the project to contribute 33 of Affordable Housing and a mix of onsite and offsite units. Dont get me wrong. I appreciate the 25 . Im being pushing a little bit. I dont have the numbers in front of me. Thats why im not an expert of onsite and offsite and whether or not they choose to do onsite of 30 is it cheaper for them to do it if they can actually either sell it for 150 of ami for the fees . Right. Thats all im asking if they are going to build onsite. Let me respond a little bit differently to the question, if we were able to push 30 of Affordable Housing onsite, we would have to likely reduce the value of the building to the city, and normally actually i think in a very different transaction i would have pushed for 33 Affordable Housing onsite. However, we have a lot of competing interest and priorities that are tied to the sale of 30 van ness. And in this case, you know, 30 van ness Purchase Price is also being utilized to help us build 1600 mission which is the goodwill site to build the large Office Building and also help stream line many of the City Services to one building. I think given our Office Market that we have been seeing and the incredible ups and downs and the grimaces that i often make with the board that come up with the high commercial rents that many of the City Departments are paying, we had to make kind of a value call at the end of the day in both the Purchase Price that we are willing to accept and our commitment to building as much Affordable Housing as possible. Because the 30 van ness sale was linked to the construction of our Office Building, at the end of the day, i felt it was important to bring back a balanced deal where we bring no less than 70 million to the board of supervisors in order to bring towards the construction of mission, but we still achieve proposition c getting 25 onsite Affordable Housing. If we had pushed for 33 on Affordable Housing which there are Community Members that really wanted to do that, it would have reduced the Purchase Price thereby decreasing our ability to the office. This deal is a delicate balance of two competing city needs which are both very important, one for us to build our own office space that we have control over and that we are not, you know, in many ways victim to the wins of the commercial Office Market, and second make being sure that we are building as much housing four our residents as possible if that makes sense. So a 33 deal would have likely come with a lower Purchase Price. Im just raising these issues from a Budget Committee point of view. I really appreciate the negotiation that went on. I guess what im trying to do is whether we take that this into consideration or not. Im not arguing this point. Im wondering wait a minute, if im sitting this putting the numbers together and i think maybe i will just build it onsite if its cheaper for me paying the fees. We still gain, but are we gaining at units being at the upper end of the affordability or the lower end. That was just something that im curious about and of course i would push for the lower end. Thank you. Thank you, supervisor yee and supervisor kim for making yourself available to answer the questions. Supervisor malia cohen questions about the agreement. It doesnt legally bind the developer to build Affordable Housing units. The housing will be assured that thats exactly what they will do. Chair, you are exactly correct. It does not and cannot bind the developer to something that doesnt have ceqa approval. So therefore its a purchase and Sale Agreement with the restrictions that we felt comfortable, that we could deploy against the title in the event of future development. The alignment of the hub project for this opportunity for the mixed use vertically integrated mixed use project and the timing of that in that the hub effort and its eirs is about to engage in its wrapping up. You answered the question. We cant guarantee it. Thats correct. Thats an acceptable answer although it still makes me very uncomfortable. Supervisor, would you like to speak to that . I would like to bring the project sponsor up to speak. But i also want to note that the developer, that this is not going to be the last project in San Francisco. If the developer were to go back on their word although not binding, i think Development Projects would be very difficult for them in the future of the city and county in San Francisco. Also wanted to note that landly has stolen very talented [ laughter ] leadership. We have good taste. And im confident in knowing that you know the consequences of Double Crossing the city and county of San Francisco. [ laughter ] all right. I will leave that there. The floor is yours. Welcome back. In all fairness. Would you read your name for the record . Alexa arena from lendlease. We are really excited about this as our first project in San Francisco. We are primarily a residential developer in the u. S. Today and that is our intent for the site to look at rehabbing the office space and building residential on top. We are certainly not in the business of rehabbing Office Buildings. I think as mentioned there is quite a substantive amount of work that would need to happen to the building anyway. Your motivation is really to produce a redevelopment out of the project in the long run, but of course it is a psa versus having ceqa clearance. We are just in that art where we had some limitations on the ability to say this is absolutely what we are doing. We have to go through a process and things like study wind but it is absolutely our intent to keep an office space on top of that office space and residential. What im looking to hear is i guess you are reaffirming your commitment to building affordable units . Absolutely. And working with the Planning Department around the hub and get more Affordable Housing units out of this site overall. Okay. Thank you very much, ms. Arena. Good to see you. One more question for you mr. Up dike. There is a plan comparison to the 2015 and 2017 deals. Im curious why we used the 641,000 number to value an affordable unit in 2015 and then use 300,000 value for an Affordable Housing pricing at an Affordable Housing unit for today. Can you just reconcile that discrepancy . The agreement was different than this agreement, in that the agreement in 2015 had a buy out clause. If the city had additional Funds Available to the combined yields of sale with mission and van ness beyond that 122 million target. If we had secured more than that, the agreement which related would allow us to buy additional affordability to reinvest those additional proceeds into direct onsite affordability. But negotiated with the developer was the price point of that affordability at this rather extreme number of 641,000 per unit. Thats why this number was in 2015. It was a negotiated number. They did open their books and showed us how and related california does know how to build housing thats for sure. They were very transparent with us and thats the number they came to with the cost of building affordability. Today we are using nce numbers, that is a very conservative number because it is based on more traditional in the way of City Projects that they are not in high rise annates you nature where this is a high rise project. That rises to 38 million of whats the value of the extra 10 . I hope that answers your question. Yes. Any other questions . One of the biggest criticisms i had of the bigger deal was the buyback of the 141,000 per united and one of those deals was that director negotiated on behalf of the city and folsom of the buyback of the 240,000 range allowing us to reach 40 of middle income ownership onsite in that building. Im really excited that the deal coming before us today is very close to that deal where we are going to obtain an additional 40 units add basically 250,000 a unit which is far below what it cost to build a unit of housing here in San Francisco. So, when i think at the 10 million discount achieving 40 additional middle class units that we did not have in the previous deal but still achieving the minimum price that we need in order to build a new Office Building for the City Department that we will be at the control level and not at the whim of the market before us today. Supervisor malia cohen okay, lets go to Public Comment. Ladies and gentlemen, if you would like to come to talk about item 7 and 8, please come up. You will have 2 minutes. When you hear a soft chime, you have 30 seconds remaining. Public speaker good morning, im jim has and i have been involved for 30 years and im here to endorse this. You talk about affordable and the city finances. Im here to talk about a different issue. The intersection of van ness should be the most prominent of the city. It is not. It is a tawdry place. The streets and sidewalks are narrow. The access to transportation is poor, there is very little services. It is very uncomfortable. We have 10,000 employees in that area and thousands of people that attend performances and many residents and many of those people find it very unpleasant if not unsafe. This developer has a major opportunity to help solve that by creating a fantastic ground floor experience that is retail and entertainment pourous to the street and would like to see additional transit on that corner. That is required by the city and the developer. Asking the Development Fees required for that building regarding the transportation and other things, be recycled in an in kind way which is a city term, i believe, to help pay for the additional improvements to the public realm. So, this should be a consideration in approving this project now and in the future and it will be a burden on everyone to get what we should have at this intersection which we dont. Supervisor malia cohen thank you. Anyone else who would like to speak to this item, seeing none, Public Comment is closed. Last remarks . I would like to thank chair cohen for putting these items first on the budget finance subcommittee and thank you for the benefits this will provide the neighborhood. The van ness market corridor is in great need of additional housing and additional development. We look forward to the on going work of the Planning Department on the market hub to ensure we are able to do that. But we are expecting a lot of up zoning and development in this neighborhood and its important for the city to keep an eye on making sure we are keeping up with amenities and reference for Office Workers that we are Building Office space and workers for it. I do want to acknowledge mr. John up dike and mr. Gavt. This is really important for the department and we were trying to balance a number of competing needs. We thank you for this work today. It really maximizes the citys priorities in achieving revenue for Office Buildings and our goals for the maximum and Affordable Housing in San Francisco. Colleagues, i ask for your support on this item. Thank you very much, supervisor kim. I think we are going to take some amendments first before we vote on item 8. Supervisor yee, do you have, can you make a motion . Supervisor norman yee i would like to make a motion on an amendment on item 7 by the proposed resolution to add a finding that the Public Interest or necessity will not be inconvenienced by the conveyance of 1660 Mission Street and 1680 Mission Street from sf San Francisco prosperity to llc. Supervisor malia cohen thank you, well take that as amended. I would like to amend item 8 as a committee report. Supervisor malia cohen thank you. Well take that without objection. Got that, madam clerk, lets call item no. 1. Clerk 170150 [lease agreement sp yde parking joint venture northern waterfront surface parking lots 2,955,607 estimated total rent in first year] reading code . Supervisor malia cohen all right, we have mr. J edwards presenting this item. Presenter good morning, chair cohen, board members. I would like to share this item before you in regard to the extensive outreach and process we went through to determine this joint venture of this parking lot opportunity. This was initially we received authorization from the Port Commission in 2015 to issue a request for proposal for the surface lots and shed lots that you have in your report. Currently all the sites are operating on interim lease on a month to month basis. The Court Commission believe this is in the best interest to a Settlement Agreement to provide stability and investment to upgrading the parking lots in order to improve the Financial Performance and visitor experience. Due to the location, these lots serve a number of well membered destinations, including the exploratorium and embarkation and restaurants. I have a site map. Can you put it on the overhead. Sf govtv will pick it up. There it is. As you can see these lots are very prominently located close to embarcadero and this is serving all of our tennants and the visitors that come to the water front. In an effort to diversity and lot operations, the request for proposal with sound in part operator in partnership with joint with community and local enterprise partner. Lbe. In november 2015, the port issued and rfp to 50 prospective Parking Management companies after an Extensive Community outreach. The board received four very professional proposals from a combined 8 firms. The port formed a panel that consisted of both port staff and mta. Staff who evaluated scores and ranked each proposal and also in a presentation. The joint venture comprised of sb plus and Park Management received a highest score and they are here today in the chamber. The sb plus is a National Parking operator and hyde park an lbe with the city and county of San Francisco. As required in the joint venture is structured for both companies that share in the risk and reward under the terms of the lease. The port received authorization from the Port Commission march 2016. Authorizing to negotiate the lease with the joint Venture Partnership and the jb partnership has executed a lease. The port will actually queue upon approval of the board of supervisors. Beyond the partnership which i will describe in a minute, the sb plus will provide membership opportunities for hyde park in key operational aspects in running and managing large parking operations. We hope this will lead to future opportunities between both individually and possibly jointly. So in terms of the Financial Performance of the lease, the lots, the combined lots that are currentlily generating about 2. 25 million to the port in net revenue. This is an important contributor to our on going Capital Infrastructure needs at the port and these lots provide a steady reliable source of income. Out of the lots that you have in front of you, the seawall lot, 321, located right here will be a 5year lease and 323, 324 is a 3year lease located right there. And that is in order to the other four sites will be on interim leases because these are future expansion sites for other port activities. The seawall lot 3221 shown right here, the reason thats only interim lot is we have entered into a memorandum of understanding with the Mayors Office and Housing Community development for potential Affordable Housing site. 324 here under exclusive negotiating agreement with ken wood investments. The overall, the two seawall lots do have a minimum base rent outlined in the budget Analyst Report and increase to 3. 5 annually. The rent will be the minimum percentage rent paid at 66 based on the gross receipts. So, according to our reports and projections, these lots combined should generate roughly 2. 9 million in annual revenue to the port in the first full year of operations. Thats a substantial increase over the existing amount. In addition, the partnership will invest significant capital to the signage, install new revenue control equipment and Energy Efficient lighting and the lots. The goal is to operate the overall appearance of the parking lot and improve the visitor experience. This concludes my presentation. Thank you, we appreciate your presentation. We are going to pivot and go to bla and hear their report. Yes, madam chair, supervisor yee, on page 6 of our report we have table 4 that shows that 66 of the Gross Revenue brings to the projected for the five parking lots in the first year with slight revenue and extended for 5 years for all five parking lots based on that 66 of got from revenues. The port is projected to receive 50,691,723 in total revenues. On page 7 of our report. The proposed lease expected to generate 748,037 of additional rental revenues in the first year to the port and approximately 280,277 in additional parking revenue. We recommend you approve this resolution. Supervisor malia cohen thank you very much for the recommendation. We are good with the presentation. We are going to go ahead with Public Comment. Is there any additional Public Comment . Seeing none, Public Comment is closed. Thank you, supervisor yee, is there a motion to accept the recommendation from the bla and approve the positive recommendation to the board. Supervisor norman yee i ladies and gentlemen, as we get back online, i would like to call items 2, 3, 4 together. Clerk yes. Madam chair. Item no. 2. 170174 [2011 lease and use agreement redding aero enterprises, in reading code . Item no. 3. 170173 [2011 lease and use agreement turk hava yollari anonim ortakligi] reading code . Item no. 4. 170172 [2011 lease and use agreement aer lingus, limited] reading code . Supervisor malia cohen thank you very much, madam clerk. We have with us ms. Kathy white from the airport. Thank you very much. You are going to be presenting these items . Presenter thank you very much. Kathy white ner from the airport in San Francisco. The airport is requesting your approval to add three airlines, to the airports lease and use agreement for approximately 4 years and 4 months remaining on the term. The agreement expires in 2021. The lease and use agreement is the mechanism that allows airlines to allow Flight Operations and determine space in sfo. The agreement provides a common set of lease provisions such as rent, fees and permitted use of space and also provides the airport framework to add an annual payment to the city. Each time a new carrier begins at the airport, they are added to the agreement which includes a modification and requires board approval. Over the course of the last probably 7 years weve had about 49 Airlines Sign onto the agreement and these three are the latest three. The Budget Analyst Office recommends approval and i would be happy to answer any questions. Supervisor malia cohen thank you, lets go ahead and pivot to the bla. Yes, mad chair, we have a table 3 and that shows the actual landing fee revenue from the airport from july through 2017. Totally and showing table 2 which shows the rent to the paid by the three airlines to the airport would be 2,962,513. We recommend you approve these resolutions. Thank you. Anymore comments or questions . Great. Is there any additional Public Comment . Seeing none, Public Comment is closed. Supervisor yee . Supervisor norman yee i will make a motion to move this with a positive recommendation. Thank you very much. Without objection that motion passes. Madam clerk, item 5. Clerk 170242 [apply for grant state of california, department of housing and Community Development various parks and Community Centers 7,500,000] sponsor mayor codes code Supervisor Malia Cohen thank you, we have tony morean. Presenter good morning. Today im here on behalf of the director of Parks Department and the Mayors Office and the Planning Commission and here to you to the board of supervisors to apply for the grants Program Grant for an amount of 7500 million. The parks and recreation ask the officers to administer the grants. The grants is based on a number of low Income Housing units developed in the city for the years 2015 and 2016, pardon me, its actually Housing Units that are permitted, and during that time we permitted quite a few. So, we are eligible for about 2. 2 million just based on the number of permits issued. In addition, the projects that we are proposing to fund with the grant are all located in areas of the city that are financially disadvantaged, park deficient and in field areas that allow us to secure additional up to 4. 4 million. So the total amount we are eligible for is about 7. 5 million. We are, these parks that were selected were selected with the different staff from the Mayors Office of housing, planning and the Parks Department. We considered that the projects that would be funded would be completed by june 30, 2019. This is a very short grant performance period. Once we get the award which will be announced july 1st of this year, we will prepare and expand legislation to appropriate the money. This concludes my presentation. I appreciate that presentation. Thank you very much. There is no bla report for this item. We are going to Public Comment. Is there any additional Public Comment . Seeing none, Public Comment is closed. Thank you. Supervisor yee, what shall we do . Supervisor norman yee what shall be do, asking the state for 7. 5 million. I will recommend this is approved. Without objection. Thank you very much. Madam clerk, would you call item no. 6. Clerk 170193 [supplemental authorizations for interdepartmental property transfer mou amendment no. 1 central shops relocation increasing transfer price by 8,578,429 to an amount not to exceed 82,278,429; authorizing notice to proceed Oryx Development i, llc] reading code . Supervisor malia cohen before us is Shelly Campbell of the Public Office commission and you will be followed by samuel chiu. From public works. The floor is yours . Good morning, im the project manager for the facilities improvement program. The major component of the program is a substantial replacement of the citys southeast plant. We have been working closely with gsa and public works to relocate central shops which are currently located adjacent to the plant to a new location. We urge your full support of the relocation. Samuel is here to give you a progress on completing that effort. Presenter good morning, madam chair, cohen, supervisor yee. Im jerry chew from public works. The premise of this project is to replace the central shops to the acquired sites of selby street and 1975 galvez avenue and the lease site at 450. By being close proximity to the Current Operations rather than the alternatives which were explored 2 years ago including sites for the way in hunters point. In february of last year, the board of supervisors approved legislation to execute a project delivery agreement which memorialized in an mou between sf puc the office of Contract Administration to be construct by the developer at these sites. The total mou was for 73. 7 million. With the approved ordinance also stated that when the architect completes the construction drawings, the developer will provide the city with a guaranteed maximum price. If that guarantee maximum price exceeds 5 million. The city will seek the board of supervisors approval before proceeding with Construction Works or phase two of this project work delivery agreement. To date, the developer has met all project schedule milestones. The Community Meetings outreach in december were well received. All applications have been permitted and construction if approved will begin may 1, 2017 to target a completion in june of next year. Thank you. To give you a little bit of context, last month sf puc included a total project of 7. 7 million to 8. 2 million. This variance of 8. 6 million includes an increase to the cost of acquisition sites and tenant relocation a higher Construction Cost for the new central shop facilities. A contingency held by city for future city request and for unforeseen conditions and cost relocates is for facilities infrastructure as necessitated by construction. We are onsite for april 15th of this year for onsite may 1. On tuesday this week, the full board approved the pg e utilitys easement legislation and yesterday the government and Audit Committee moved with approval to the full board instead of an agreement with 1955 galvez. The tenant at 555 selby has agreed to vacate by april 13th, we need to finalize the terms of the relocation. More specifically in regards to the increase Construction Cost. The city staff has worked through the last year with the developer and the team to reduce the increased cost by 1. 9 million from 62. 1 million estimated at the start of the Schematic Design phase to 60. 2 million upon completion of the 100 documentation phase. This net variance of 5. 2 million from 55 million to 50. 2 million can be attributed on the following to the poor conditions onsite, 1. 4 million is needed for foundation than originally anticipated and 1. 2 million is needed for the precap system. There are also high cost from preliminary estimates most notably 900,000 for Industrial Equipment and 100,000 for electrical needs for the central shop now and moving forward. In addition, there were about 450,000 in that increase for additional hard cost and architectural and engineering cost due to the revised scope. This concludes my presentation. Supervisor malia cohen okay, good. I have a couple of questions. Out of the many things that you mr. Chiu in particular from public works is presenting what i am most concerned about is the increase from the construction budget from 55 million to 62 million. Public works has claimed that the 55 million which is 10 is due to the details of cost variance which you detailed a little bit in your presentation. The unforeseen site conditions resulted in a need for a more robust system increased cost and industrial scope in electrical and the bidding market which we have very little control, i understand that. But, the reason we allow for this contracting, if im not mistaken when they came to the board we authorized central to install the shops quickly, while they are staying with the project, the cost is really difficult to swallow as you can imagine. The public works claimed this happens often with Construction Cost and we have a contingency in the budget anticipating this. Well, this is still very uncomfortable to get around. So i do have a couple questions for you. When we approved the sole source contract last year, the board assured it was a decision we had to makeup to keep the project online on time and within budget. Now, i understand that oryx didnt anticipate this increase. Could you speak to that . Sure. Last year, the original ordinance was approved at 55 million. That cost was based on the preliminary estimate using conceptual designs, using per Square Footage allowance for example and understanding of nearby sites to understanding what the conditions were. Oryx and its team of contractors were not authorized at that time to perform work. For example, we werent able to go ahead and do detail to technical investigation to find out what the actual site was like. It turns out at this site, 555 selby, that was located at Old River Bed with the steepest and north moving shallow towards the south. So that wasnt anticipated. For example, the Industrial Equipment, what they do was to take or model it after a comparable facility in modesto. So afterwards they came and the architects and engineers, the equipment that was determined needed and appropriate for the current central shops has changed. So, the current estimate of 62. 2 million incorporates the final Design Development through this year of design. Okay, well, how often do Construction Projects cost for comparable projects see this level of increase . From experience, we typically maintain a 1015 contingency for projects for items like this, unforeseen conditions or due to necessarily due to Market Conditions that are always a crystal ball item or even changes to the program that are necessitated once we start the project and design the projects and working with clients. Okay. So, this cost is something that its within the realm of possibility . Correct. This increase is within the range of construction development. Okay, my final question. I have in front of me a list of the details describing why you need the 5. 2 million Construction Cost increase. I see that 1. 7 million is dedicated to Foundation Cost because the until cost estimate was based on soil and Foundation Conditions 2 blocks away from the project site. So, for what reason did the contractor test the soil 2 blocks away from the site instead of the actual site itself . If i can clarify that. It was actually based on their experience with another project nearby. It wasnt testing done for this project. And there wasnt a testing done for this project. Okay. Typically when we have testing of a project for a nearby site is an indication of what your site will be like. Could we have anticipated the cost of the increase if we tested the actual site . That would help to reduce the risk. The more you test on the site, you more information you have, yes. Thank you, mr. Chiu. Supervisor yee, do you have questions for the presenters . Supervisor norman yee its pretty similar. As the chair cohen mentioned when it was presented to us before as a sole source contract. We asked a lot of questions about why and the answer was they would do this on time and on budget. And so, at some point we have to trust the professional judgments, but this increase gives me less reasons, fewer reasons to trust the professional judgment because this is way off. We are not talking you know a decade ago estimates. Even the moving cost, the relocation cost, its like what . You are going what is it . 1,000 of whatever it is to 2 million 200,000. When you make an estimate that far off, i have to question what were people thinking coming to chambers saying we are professionals and you should accept it. Tell me why i should accept it now and is there a reason why you wouldnt come back next year and tell us, by the way, we are off another 10 million. I will start clarifying that by the original ordinance. The developers task first and foremost was to complete the construction drawings. At that point they would provide a guaranteed price. We are back here because the guaranteed price has exceeded the 5 million. Secondly, in terms of what are we doing now to reduce the possibility or even mitigate the possibility of coming back again later on is that we have put the in place a city held contingency for unforeseen conditions or request as part of the mou between puc real estate and oca. We believe this contingency will help to mitigate and in line within the range of what we typically maintain as contingency for Construction Projects. With respect to the relocation cost, if i may ask director up dike to speak to that. Thank you, samuel. Director of real estate. With respect to relocation cost. Frankly, the flywheel desoto tenancy was assumed originally to not be eligible for benefits, but upon legal view of their status that ended up being an eligible cost. Its simply not on the radar, on the radar. An opinion noneligibility of cost to an opinion eligibility cost. The final settlement of that amount of cost we can solve administratively. As samuel mentioned for the contingency and amount for continue relocation expenses, that is the amount. We do not plan to return to the board on this matter. Im hopeful that will be. Mayor i also want to say weve mitigated these cost between the sublease and which ran longer than we anticipated because we had additional time for the relocation of these two tenancies, that generates over 900,000 in anticipated revenue. That is the bottom line and we were able to replace these occupancies of a season of filming of chance. I know he was delighted with that opportunity to keep that filming. They are filming outside of San Francisco. So there was a nice twist to fate where they were able to grant some revenue for the expenses. I would reveal this rather specific unrelated to me. This is where you come in and you say this is what we estimate and the cost to be and here you are talking about something that was as simple, not simple, nothing is every that simple, but when you have a legal determination that made it 2 million more. That to me should have been done when you came the first time, not, oh, we just found out. These are to me not very excusable rational. And by the way, when you come in with any contract, i would assume, and im talking about the first one, that you already have these contingency plans in there. I think almost every contact i have seen especially if it has anything to do with construction, the contingency point is built in. So whats the difference between this contingency and what we should have had. Did we have one in the first contract . If we didnt, thats not being very using good judgment. If you didnt include it, this is in poor judgment. There was a very small contingency in the first agreement. So it didnt work in other words. It wasnt adequate to cover the cost of the increase we are looking at currently. Did you see any possibility that this looks like about 23 contingency plan is good enough . So, if i may, the city contingency works out to about 3 , you are correct. But within the project development there are contingencies that are within the contract. So the city held contingency of 2 million, thats outside of the contract. Within the contract, there is some contingency for both the general contractor for construction use and for the developer for things like project control cost and entering fees should the scope changes. In total we are looking at 9. 7 of the total development agreement. So within the 80 million there is actually some contingency funds in there . Correct. With sf puc and real estate we felt it was important for the city to maintain part of that contingency outside of the contract. So thats why there was a split between the contingency within the contract and contingency outside of the contract. Okay. I know this is an important item for the city. I know its an important item for district 10, supervisor, but this smells, to me, we shouldnt have come back with an increases this size on the sole source contract. So, but i know its important. Supervisor malia cohen thank you. I would agree with you. I like you voted last year and we voted to move forward. We were very uncomfortable and kelly was the one that did the presentation initially and john up dike closed a little bit, but, i feel like my back is against the wall. We need this to go forward so that we can continue to move forward with the entire project. I will say this since our conversation last year for sole source contracting, i think he came back once as we made our desires to see better, stronger rfp process and know particularly to puc and public works. They seem to be the worst offenders in this case in particular. Supervisor yee, im going to have to ask you to hold your breath. Hold your breath, hold your nose and support this so we can move this forward. I dont know if there is anything else from mr. Chiu, if not, i would like to pivot to the bla. Thank you, madam chair and supervisor yee, on page 17 of our report we have a table 3 which compares the total estimated cost to the central shop relocation project of 73. 2 million to 82 million in the original amendment to the mou as included in the resolution this shown an increase of 8,578. 49. On page 18 of our report to date, 90 million of wastewater enterprise sole source approved by the board of supervisors for this project. The difference between the 90 million already appropriated by the sf puc and the total 82,027,849. There is an additional 7. 7 million of city cost. And i would just like to emphasize on the bottom of page 18 what both madam chair and supervisor yee that you have been stating and questioning. We point out that ordinance no. 816 authorize the existing agreement with Oryx Development developer and general contractor to design the facilities. The cost to be determined to be the one team capable of designing this project and capable of the budget. At the time the Construction Agreement was for 75 million and the total project was not to exceed 73 million. We note that while approving and sole selected officer the general contractor likely expedited the process and design phase. The citys requirement for Competitive Bidding compose a larger policy with an open process to contain the most Competitive Price for the city. Having said that, we agree this resolution should be approved and we are recommending approval. Supervisor malia cohen thank you very much for that statement of clarity. Supervisor yee . All right. All right. We are just wanting to see if you have any questions from the bla. All right. We are going to Public Comment at this time. Is there any additional Public Comment . Seeing none, Public Comment is closed. All right. Supervisor yee . Lets take a motion to move this with a positive recommendation to the full board. Would you like to make the motion . I would like to make a positive recommendation to the full board. Without objection. This item passes. Do we have any further business for this body . We have no more business. Thank you. We are adjourned. [ meeting is adjourned ] again. clapping. good afternoon, Everyone Welcome to to city hall so i want to thank everyone for being here on this lovely valentines day and we really have an Important Message we want to share with everyone and that is that on the valentines day we want to make sure that everyone feels loved and included here in San Francisco and by that we need to make sure we provide housing for everyone that want to live and work here for generations to come. clapping. so today, were joined by people my colleague ahsha safai will acknowledge but bring up our mayor of the city that has been working to make sure our housing policies enable future generations to live in San Francisco with that, mayor ed lee. Thank you. clapping. katie and supervisor safai joining on that valentines day rally for housing yeah. Got a lot of love in the house and a lot of the labor leaders theyre showing their love they love building they love living in the city, too, we have all the residents who is to us we need more restrictive housing for everyone and so this is a time to make bold announcements with the board of supervisors and the Mayors Office get together we do bold things we are in agreement we do things like from the city college we dont mess around why not more middleIncome Housing for First Responder and working class folks all of the Different Levels of people need more housing in the city we can build rehab and one thing in 2014 i said we needed a housing plan i know said that to john rahaim his staff was going nuts not getting all the permits out get them out faster at the knew and the public knew we announced thirty thousand rehab housing by 2020 well, today, because everyone is middleclass and working together 17 thousand one hundred of units have been completed clapping. 36 affordable inform middleincome and low income we have to keep it going working very hard and build and when we Work Together we can get stuff done today we are announcing something i really am excited about supervisor katie tang is reinching home sf home sf is a working with our Developer Community with the neighborhood with our labor leaders we can do more than that zoning if we provide more incentives this is what working with the board will be helpful in doing so with the home sf program over 6 to 8 hundred more restrictive units can be built in the city for middleincome and families throughout the city im excited with the supervisors come up with Creative Ideas im sorry 6 thousand did i say 6 thousand units im getting excited when we are initiative at the same time our residents say we have to be practical whether we Work Together both can be accomplished with quality housing that all of our units represent and our nonprofits help to manage and the you city we are refugesized your Public Housing portfolio not see combe e delipidated housing youll see housing that mixed use and the residents are the same people but with a lot more restrictive hope excited about working with the board lets get more housing for everyone lets have a great valentines day. Thank you, mayor ed lee and were announcing a renewed effort around a program designs for middleincome and workingclass families guaranteeing new projects thirty percent for workingclass families and a requirement that over 40 percent of units are at least two bedrooms or grooemz e three bedrooms to serve our families that want to have children. clapping. so we will be bringing forgot legislation in the board of supervisors in the coming months and hope youll join you theres a lot of things happening this in the federal government there might be people that dont want to include us in the country in San Francisco we embarrass diversities we really need to walk the talk and build the housing that is inclusive and not begun that for generations i hope youll join me and the people that working hard in our city we want to make sure they remained housed in San Francisco with that, im going to turn it over to my partner on this valentines day my work partner supervisor safai. That was great, thank you katie im your partner for today happy valentines day im supervisor ahsha safai and first want to acknowledge the men and women in labor plumbers local 38 and local 261 exaggerates 22, and the janitors local 87. clapping. the peoples are here unfortunately in the city weve gone to the extreme and becoming a city of the 88 we have to make drastic steps in the housing policy the only way to house people to make a bold step so were here to say that is time to step forward for working people and step up for working families and need to begin to make them a priority in my district prior to the Great Recession you could find an Affordable Housing but now homes are north of one Million Dollars in the sunset homes well noting of one Million Dollars in the bloifts approaching one Million Dollars not for workingclass and the market took care of of itself but our chances and opportunity to make a bold move and steps towards working families over the decades produced 23 thousands of low Income Housing when a Redevelopment Agency we produced housing for workingclass but no consistent funding stream for working families ill repeat no consistent funding stream for working families so if youre a janitors if youre a laborer if youre a pledgeer or carpenter and a hotel working or noose no housing designed for you, we dont have the funding we need to make bold steps in the coming weeks well talk about inclusionary but i stand here today in full support of everyone that supervisor katie tang we need to step up for working class families. clapping. when the teachers are trying to get housing and have the lands for free theyve come across the reality money streams there is funding for the paraprofessionals but not funding streams for teachers when we cant fill the positions were in a entries around housing for working people an important aspect of what makes our city strong the next person i want to bring up local local 261 speak from their appreciative mr. Josh. clapping. thank you supervisor safai and thank you, of course, to supervisor tang for bringing in forward and to the mayor and all of us we at local 261 join the others members of the building and Construction Trade to do Something Special over the past several years thats the most successful hiring program in the country. clapping. a wouldnt have been possible without the leaders from government and lavish and housing advocates but that breaks down it all breaks down having a chance for local resident to get a job working with the trades from the community and breaks down when they seek to support their families and started a family and be a local hire in San Francisco it breaks down when you dont have housing so this is a follow proposal here to talk about working families and middleIncome Housing generated and Building Trades everybody coming together like i said local hiring works when we have what . Housing what do we forbode to build. Housing Human Resources all right. Lets pass this law. Thank you next ill have to say we cant do this would you the Planning Department were trying to solve the challenges we need smart people on the ground firsting the out the details ill bring up director rahaim but the team hope sf and calling names thank you all so much clapping. thank you xrifr and good morning and happy valentines day im proud to be here to work on this gram as the mayor said he gave us a charge to say lets if you get a way for more restrictive moderate and housing we developed a basis and proud to be here i think we agree that families with children are the integral part of the intent for the middle and moderate housing meets the citys goals to solve the housing crisis will have housing for workingclass and thirty percent of all new housing will be permanently affordable and 40 percent are required to include two bedrooms or more restrictive and challenging in San Francisco are here weve got a lot more work to do this is an sdwralg part and the most Significant Program we can put together weve working on in a very long time but part of a multi faceted program for an Important Role in keeping families in the city i really look forward and want to acknowledge the mayors leadership and supervisor tangs leadership were looking forward to working with that to move forward and get housing built thank you very much. clapping. so thank you for being here and again everyone that as a partner so many advocates if you can raise your hand if you support more restrictive housing in San Francisco. So amazing to see all the grassroots support for more restrictive housing and, of course, we know yes, their our neighbors that maybe be obtainable to more restrictive housing but we need to include all the workingclass families on this valentines day i forgot you not well build more housing for all of you so thank you very much for being here test good afternoon and when speaking before the commission, if you care to, do state your name for the record. San francisco Planning Commission regular hearing for thursday, march 16, 2017, id like to remind the members of the audience that the commission does not tolerate disruptions of any kind. Please silence any devices that may sound off during the proceedings. And when speaking before the commission, if you care to, do state your name for the record. Id like to call roll at this time