Alright, good morning or afternoon. Welcome to our special budget and finance Committee Meeting of monday december 5, 2016. Im katy and chair thg team and to my left is normal yee. Our clerk is linda wong and sfgovtv like to thank leo [inaudible] derek. Please silence cell phones and electronic devices. Complete speaker cards and document to be included as part of the file should be submit today the clerk. Thank you. Today we have item 1, so if you can please call item 1. Orbd nons approving and authorizing the exectv director of port of San Francisco to execute project agreement with army corp of engineering to allow dredging of Central Basin by pier 70, not to exceed 2. 2 million for project cost and port providing a 10 percent matching share nod to exceed 900,000 of the Central Basin payable over the 30 years for matching fair from the port not to exceed 3. 1 million. Thank you we have the port staff here to explain why we are here on a monday for the item. Yes. Good afternoon supervisors. [inaudible] project sponsor [inaudible] and the new Deputy Commander of the San Francisco district of army corp of engineer major kevinmic cormic. Before i go further like to express on behalf of director forbes heartfelt gratitude for being here today rchlt being able to call the special Committee Hearing for us and also to the legislative analyst for turning out the report so quickly. Thank you so much. Why are we here . The pier 70 to get ortorianted the ports southern water front. The longest continually operating shipyard on the west coast and under lease as one entity or another for by same operator for all most 30 years b ea systems and has 2050 scaled craftsman. 1885 the first ship their turned out. Produce adlot of vessels for world war i and 2. The Central Basin is the driveway to the ship yard. When it gets to shallow the facilities cant handle ships of increasing sizes. Optimal depth is 32 feet. Now we are considerable shallower than that. The shipyard is having to turn away business making it less competitive and dredging it for the shipyard itself or the port is not a economical undertaking. In 2009 recognizing the number of federal vessels coming in and serviced i wrote the letter back in 20069 to army corp of engineers asking for assistance under the small navigation program, the continuing Authority Program 107. They took a look at that and numbers looked good to go into full blown study so did that in 2011. There were years where congress iced these program but got back on track last year. The army corp is extremely thorough and has a very rigorous process. We came out on the other end with a project that they liked and daerchled it in the best interest of national infrastructure. 8. 9 million which deepens the Central Basin back down to the optimal depth of 32 feet and importantly afterthat take on the maintenance dredging fold over what is a problematic situation for the port and shipyard tenet for year jz years as long as they have been there, fold it into had normal federal operation and Maintenance Dredging Program so it comes off or books. The cost benefit ratio looks good. Every dollar the federal government spends they spend to recope all most 3. That is mostly from ships not diverting to the next closest shipyard which is not that close. The steaming costs are expensive. This is what we are looking at, this is the dredge footprint itself. What you are look ing at in the lower right are the two dry docks are big vessels that submerge like a bathtub, it sinks itself and ship floats up and picks pback out of the water. The dry dock is one of the la largest on the west coast so takes the largest cruise ships. Why we are here today is we have been through this process since 2009, we come up with the alternative that the army corp want tooz build. We are on board with that and need to execute the agreement that locks that in place. We have matching requirements kripeed in the ordinance both for the initial dredge and the maintenance. We also have responsibilities to make sure that the facilities themselves that service the shiperize properly maintained, that is a part of the lease we have the shipyard operator and handling of hazmat staff. I mention it because its a liability technically but that side is dredged before. It is thury tested and there is nothing there. As i said, it will be deep ened to the optimal depth that is the new authorized depth and the army corp will maintain it Going Forward until something changes so looking at 30 years as one window for some of the financing rules, about 20 million. We have the initial dredge and comes out to annually a little over 400 thousand a year of benefit to the port so that is essentially taking off the books in recognition of the benefit to the the federal government. What would the ordinance do . The reason we are here today with a ordinance and not going through a more standard process is that the administration strange january 20 will lead to a new head oaf the arnly corp of engineer and that individual is require today execute the agreement so we are here with a ordinance waving certain contract provisions mostly because it is the army corp, it is federal boiler plate they use all over the country and we are pret a comfortable with our continues reviewed it and feel pretty comfortable with what we come out with. That includes do not exceed amount and again january 20 is the key date there. It does wave parts the environment code, but just to be clear it doesgoing through all the same processes we go through for other dredging. The dmoo Regulatory Framework is in place. The army corp is doing the neppa review and exempt under ceqa so this is for port is and dredging and pretty familiar with this territory. Thats it. Just want to say thank you again for being here today and special hearing and happy and other port staff are happy to answer questions. Thank you for your prezen sentation. Spl visor yee . Curious, on a aneral basis how much do you have to dredge . How many feet . Thats a good question. It varies from location to location depending on the shouling and shilting. In this particular spot it is between a half foot to a foot every year and it is notthats about average. And then i guess when was the last time it was dredged . The shipyard tenet did a emergency dredge 2014. They took a couple feet affthe top in the high spots to preserve the ability of the shipyard to take larger vessels but it hasnt had a full dredge to 32 feet for at least 10 years and that was also not done with city funds. The shipyard operator was able to get feema funding for anotherthey had discretion where to use it and that is where they chose to use it. It is a key part why the army corp is able to take it on is absent the federal funding it may not happen and doesnt work for either party so that facility wasnt be available for flal vesselsism. I thought i read the dredging is to occur every 4 year snz thats right. So its not yearly . Its not yearly. That is a estimate. It is depending on the rate of shouling it is more economical doing it every year. About every 2 feet they start get toog a point where it could restrict the business they can take, so they review that among other federal channels that require dredging maintenance and assume tg is dredging at the predicted rate about every 4 years you medicationed mentioned there hasnt been a full dredging in the last 10 years, how does this partnership you are embarking upon, how will it impact what you are able to do that at area . Will you be able to service more ships . What is the impact been due to lack of dredging and what will it be moving forward . Well, our shipyard operator hah to turn away several large ships. I couldim sure [inaudible] could name them off. They have to turn away seberal large ships because they dont have the depth. There are others where they are boarderline and it is a up to the discretion of the captains of the vessels whether they take them or not. They only try to do them when there is a very very high tide and have to be lighter and make accommodations. This project moving forward with this arrange mentd when it is back to the optimal depth the San Francisco shipyard will not have to turn away any vessels due to navigational restrictions. Do you have a senss of the numbers at all . The numbers of ships turning away per year . That you have been because of the Current Conditions . For example in year 2016 would you like to come to the mic. [inaudible] maritime marketing and port of San Francisco. Year 2016 there were at least four im aware of that turned away and it isnt only the big ships because if you remember the plot layout, we got two dry docks and we got a smaller drydock which is west and that is very orange and red in the photos so we had to turn away the submarine pump anieto which is home port in San Francisco which would have been a lucrative and long term job but couldnt get it into that dock because we didnt have 14 feet of clearance in that lane that comes in at the second dock. So, this whole dredging scheme is to not only deepen it but also to widen the approach. The short answer to your question is at least 4 ships im aware of in 2016 turned away. What is the next closest place the ship can go and get service if they are turned away from here . It depends on the size of the vessel but the other big one is portland, right . Portland is the next big drydock. One of the facts the army corp takez into consideration is how much father they have to steam and fuel cost. A consideration they added if there was a emergency on the bay a ship leaking oil that was right at the margins of the depth for get nothing to the dry dock for repairs. That was another piece of the puzzle. It sounds like all your environmental clearances are solid and there is nothing to worry about in the future here . Alright. I agree with that. Alright. Those are all the questions i think we have so at this time well go to the budget analyst report. Deborah newman from budget and legislative analyst office. The required 25 percent match for the initial dredging of 2 2,242,750 is appropriated and Going Forward over the nucs 30 years the not to exceed 897,100 of port matching funds of the 10 percent required match will be also included in future port budget subject to appropriation approval by this board of supervisors. The source of funds are port harbor funds which they use for dredging and recommend approval oaf this orbd nns. Thank you very much. Okay, seeing no other questions at the time we open up item 1 to pub lb lic comment. Any members of the public wish to speak . Seeing none, Public Comment is closed and if we can get a motion on the e item i believe there is a amendment that the port would like to submit to the committee for approval. Is that right . This right here. Yes. Ill differ to the City Attorney on the nature of that amendment. Because the amended ord nnss, the language requested by john gibbener onit requires us within 30 dayoffs the finalization of the agreement to put it on file with the clerks office. Recommended by the boards attorney. City Attorneys Office . Im informed section 7 should be a added to this proposed ordinance which we added by double underline. If you like me to read if t to the record i can. Sure it states section 7 entitled filing of executed agreement within 30 dayoffs agreement being fully executed by all parties, the port shall provide a copy the contract to the clerk of the board for inclusion into the file. And im sorry for the record, im tim or timothy you shidy deputy City Attorney assign today the port. Thank you very much mr. Io sheeda. Supervisor yee would you like to make a motion to amend . I yes. Well do that without objection. For this legislation to full board with positive recommendation as amended. And a committee report. As a committee report. We do that without objection. Any other items before us today. Would you like to excuse supervisor farrell. Yes, motion to excuse supervisor farrell. Ill make the motion. Without objection supervisor farrell is excused. Madam clerk any other business before us today . There is no other business. Alright, thank you, we are adjourned. [meeting adjourned]. 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