the current design, but was a different scheme architectly and it did not provide for the park and that was the basis for the initial estimates that went into the design competition as well as the initial phase one budget. >> the initial phase one budget, carried escalation rates of 3 and a half percent per annum and construction costs and we had done an fta process to establish the levels of contingentcy in the budget at that time and looking at commencing demolition in august of 2009 with the phase one construction to be completed in just under 5 years in january of 2014. as we brought the architect on board and we moved into the design one of our first activities was to go through

what we called a concept validation phase where we would contrast the hok scheme with the work being developed by the architect pelly clark pelly to identify any discreptcies in scope and cost and to reconcile those before we moved into the scheme matic design. >> and so as we moved into the budget and to revise it there were a number of miles stones that we went through. may of 2008, we awarded the contract pelly clark pelly to be the architect and set forth the design schedule at that point which included the concept validation phase that i discussed which was going to be our first four months of work with the architects. moving into the schemeatic design and completing the construction documents in 2011.

in september of 2008, we completed the concept validation phase. reconciling the pelly proposal, and the design proposal with the base line budget and. hok scheme and we were able to incorporate a number of new ideas into the design of the transit center. of course, the signature park that is central to the pelly proposal and also a number of energy conservation measures that allowed us to move from the initial target of lead silver to lead gold and the vision that pelly had brought to the competition to the design of the transit center. at that time, we were maintaining the cost estimated cost of construction within the original $1.89 budget through a

number of valuing engineering measures both with pelly clark pelly as well as osha working as the cmgc. and we moved into natural ventilation and eliminated a glass enclosure that was to go around the perimeter of the bus boarding island. we reduced the number of skylights at the park level from five to three which opened up more program space in the park for landscape space but, through the use of tubes that the architect had proposed still bringing significant natural lighting to the bus deck level. we had refined the design of the structural system as well as the park landscaping and all of those value engineering efforts had allowed us to maintain a cost estimates within the earned base line budget and of course, in the 2008, 2009 time frame, we were

looking at particularly favorable pricing in competition and in the bay area market place. >> as we moved into the scheme mat tick design phase, the web corp in doing their constructbility review of both the phase one scope that they were currently tasked with but also looking at subsequently how we would construct the lower levels of the transit center in phase two, identified that there would be significant savings to the program if we were able to construct the transit center in a more conventional manner from the bottom up by corporating the rail level core and shell in the first phase of construction. and in february of 2009, the arab program was announced in the tjpa filed an application to pursue funding that would allow us to include that

construction in phase one. and it was based on that pending application that in june of 2009, the tjpa board authorized us to direct pelly clark pelly as they moved into the development phase to assume that the rail levels would be constructed in the first phase in preparing the design development documents. and in january of 2010, we were notified of the award of 400 million under the program to allow us to construct the rail levels in phase one and it was a significant benefit to the program to allow us to mid gate both the risks of phase one, and face two construction of the transit center. to provide a rail-ready transit center to improve the ground floor design of the transit center by providing program

space below grade where we could locate a number of utility and back of house programs freing up the ground level to more publicly, public programs and retail programs. and it also by funding the first phase of construction, allowed it more time for the land sale market in the bay area to recover, improving our financing picture in total for phase one. so, in may, 2010, the board adopted the revised base line budget incorporating the funding of 1589 billion. the revised base line budget included cost estimates based on our 50 percent designed development documents from pelly clark pelly and estimates compared from their consultants as well as the web corp and the

additional that we received through value engineering and it reflected the actual costs of constructing the temporary terminal and the bids that have been received on the demolition contract and some advancement of the design of both the bus ramps and utility relocation and the ac transit bus facility and they had elected to conduct their own facilitis which removed them from our program and our budget. >> we also the phase one budget reflected a new schedule for construction, with demolition beginning in august of 2010. and completing of construction in october of 2017. at the time, we were still looking at relatively low escalation rates particularly in the very near term, 2010,

2011. and of course, there were additional advancements in the design that were reflected in the cost estimates and we had implemented the cmgc contracting strategy and so that included both the estimates based on a cmg c contracting approach but the establishment of a cmgc contingentcy that i will scribe later in the program. and it included a rear,al location of program wide costs from phase two to phase one, the initial time line for phase one was developed, there was an expectation of a significant amount of overlap between phase one and phase two efforts, and at the time of the revised budget was adopted, it was clear that the phase two would not be in full swing until a later date and so there was a

reallocation or a reaportionment of program wide costs that had an impact on phase one's budget. >> so that the revised base line budget as we adopted in may of 2010, included these categories. and increased the building construction budget to just over 900 million. and i mentioned the two major milestones of the start of the demolition, and the target of october 2017 for bus operations. since the adopt of the base line budget, we have progressed the design through design development and the completion of the design development and moved into the construction document phase. and we have employed additional value engineering measures to help to contain and reduce

costs of construction including switching the ceilings with in the transit center from a gfrc material to metal. a redesign of the face material at the bus deck and the edge of the park, again to reduce the costs through the use of lighter weight, lower cost terms instead of the gfrc that had been originally proposed. we simplified the storefront glazing, at the west end of the transit center in particular to provide, to switch from amulonless glad to amulon glass allowing us to reduce the cost of what is a significant architectal element of the building in the area and volume. we also simplified along with the architect, the floor in the light column, to provide a

glass floor at the base of the light column that will continue to allow the light from primary light column to extend into the rail levels and opening up the circulation in the grand hall and reducing the cost from the skylight seating type of feature that had been proposed at that location. in addition to the hard changes that we have made in the construction documents, and we have had the architect as they were required under their contract to incorporate a number of bid alternates, which will provide us with flexibility as we move forward to the award of the individual trade packages to make the decisions if additional cost containment measures are needed. and these are just a sampling of the measures that are included. a lot of them have to do with

the architectal features of the building and the finishes of the building while preserving the programattic needs of the center. in aggregate between the value engineering and the deductive alternates there is more than $100 million in cost reductions that we have been able to make to the construction estimates and that is above and beyond the $100,000 that i mentioned before that the program was able to save by constructing the transit center in a bottom up approach with the (inaudible) ramp. >> before you move on to the rva. >> i just want to check in and see because there that was a lot of information, if the board members have any questions? >> director metcalf? >> i got it. >> dr. reiskin? >> i had a couple of questions. >> sure. >> one of them, so in 2010, we

got $400 million to build the box, and we increased the budget by exactly that amount and it looks like... >> yes. >> and at the same time there were 100 million savings of ve and some shift of scope from phase two to phase one and there were energy efficiency additions to the scope. there was whatever came i guess from the architectal vision that was incorporated. so did everything else just wash out exactly and that is why the increase to the budget reflected just the $400 million of the grant? >> yeah, just the $400 million of the grant application was developed in conjunction with looking at all of these other moving components of the estimate. >> so it is not just the cost of the box per se, then?

the $400 million grant was looking at the cost of the box in terms of the hard cost and the design cost and the construction management and it extended our construction schedule by two and a half years, they were both the hard costs of the box as well as some time dependent costs and there were other adjustments within the budget categories based on the picture that we were looking at, at that time, but those were kind of done in parallel with the incorporation with that funding. >> so that may, 2010, revised budget of 1.589 incorporated all of that. >> exactly. >> okay. >> and then the schedule, in may of 2010, also incorporated the change that you made adding the box changed the schedule and so that may, 2010 schedule incorporated that.

>> yeah. >> because now it shows that excavation will be complete, july 2013 and we are a year behind that. the engineering and the exact size of that butress had not been fully developed, and so what has happened is that the over all critical path for

construction of the transit center runs through the butress construction and so, with the completion of the butress at this time, we will move into the completion of the start of the excavation phase. so that completion date for the over all excavation has been moved out. and you will see as i mentioned a little later, a revised schedule that we are currently managing where a number of those intermediate milestones were characterized as the completion of the elements of scope have been moved out. but by resequencing the over all work, and we are still maintaining the october, 2017 completion for construction. so, kind of in real quick terms, what is happening with the substructure construction is that is going to start at the far western end where steve described that we are installing the map slab now and

moved from east to west and then as the structural steel work begins, that is going to begin at column line ten of the building which is roughly where shaw,alliliy is. as it moves from east to west, what is going to happen is the excavation in zone four will be completed as the concrete moves from east to west and as that comes up the steep will be moving from west to east and we will catch up and through that sequencing of construction, web corp has been able to maintain the over all schedule for completion of construction in october of 2017.

>> again, when in may of 2010, we were working with a tentative schedule. >> i understand. >> i guess that have we, has the board since approved a different schedule? >> no we are still on schedule. the critical component is that we are opening the station of bus administrations at the latter end of 2017. with the recommended adjustment we hold to opening up the station for the latter end of 2017. >> i understand that and just the right shifting of these steps gets us into a period where construction costs were higher then they would have been planned or the current schedules. >> and i don't know, if the schedule was approved at the level of thels milestones, would the board need to change that approved schedule? or is that just not a board approved schedule? >> what the schedule was driven

by the cooperative agreement between the state of california and the tjpa and san francisco that requires that we have the station opened for a certain time frame for the bus operations. the critical component is to have the bus operations in place. so that is what is driving the schedule. >> i believe that the budget item that was adopted by the board, did not include, the intermediate milestones, for the operations and the current milestones are based on the approved web corp schedule to meet that objective. >> i actually wanted to follow up on the direct's questions and i apologize that i am repeating because it is harder to follow the technicalities. the first question that he had asked and it is great to actually see, because not all of us were here on the board during this time to see the history, so this is incredibly

helpful to see how the budget has changed and also the value engineering work that has gone in to safe, $100,000. but the budget that has been shown is that we were able to maintain the $1.589 million budget. so the $100 million in value engineering savings that is just kind of met up with the increases that kept coming in. so we were always able to stay on budget, is that... >> yes. >> you are expressing? >> yes, that has been the process, working with the architect. it is really been a process working with the architect and with the web corp as the costs of construction have been further developed and further refined. the methodologies and the logistics. you know, at the time you have seen in the construction updates, the access tresle that is running the length of the excavation site. at the time that we adopted the

1.589 million budget there was not a concept of how we would execute that construction access and the tressle is roughly a $40 million temporary work that needed to be worked into the budget. so it is those types of evolution through the design and constructbility process that we have had to adapt to and continue to maintain the program objectives and the over all program budget. >> and then, just in regards to the last question that director reiskin asked. in terms of the interum milestones, when a change in the interum milestones impacts the budget, is that something that should come to the board? i understand over all that we will be on schedule in terms of for the larger public, what they care about is when the bus terminal opens or when the construction is completed and we are supposed to be on schedule for that. i think that the board would be interested in the interum milestones only as it impacts,

for example, the budget costs. >> and we do have a budget policy that there are certain changes that are required to be brought to the board. the changes in schedule and in that impact in throughout the escalation and some of those costs, don't quite rise to that level. but it is something that we could incorporate into kind of regular updates to the board. >> yeah, and we do let the board know, i think that if there is a major interum that is going to effect the budget and we do let the board know and we keep you updated on where we are on that. absolutely director. >> thank you, director ortiz? >> thank you. >> the single highest expenditure is program wide,

what is program-wide? >> program-wide costs are a number of agency costs. it is tjpa staff our accounting costs our legal conducting costs, the program management team, urs. all of those costs of managing and delivering the program are included underneath the program wide budget. >> and did that go through value engineering. >> sorry? >> did that section go through value engineering? >> we have continually looked at opportunities for containing, particularly our program management consultant and our other consultant costs. and a lot of that is authorized through the annual budget, but in the process of setting out the work plan for each year, we

have gone through a review of the staffing requirements to insure that we are trying to be as lean as possible in delivering the program. >> okay, thank you. >> okay, seeing no further questions. we can move on, but i do really appreciate the previous history, historical budget presentation. thank you. >> so, when we were in the scheme mattic design phase we went through a risk and vunerbility assessment which was an effort to identify potential hazards, whether they are natural or man-made that the transit center would be exposed to. and to incorporate into the design of the transit center features, that would help insure the safety of people using the transit center as

well as minimized on the impacts on the transit center itself of seismic and other events. it has been part of the design of the transit center since its inception for us to be operational after an earthquake with only minimal need to address cosmetic issues and be able to... to be up in operation following a seismic event. that type of issue has been in the design since the inception. as we moved into the construction document phase in 2011, it was appropriate for us to do an update of the risk and vunerbility assessment to incorporate both new information outside external to the project, on what the types of risks that the transit center might be exposed to, as well as to incorporate new

information based on the advancement of the transit center design from the schemematic level to a more fully detailed design. in doing so, we worked with the urs security branch of the urs. this is a branch of urs separate from our program management team. but brought in their experts a matter of experts to help us to conduct a top to bottom review of the transit center again and we also brought in a consultant to assist the tjpa in scoping and managing that process. the head of that team, is bob dusabela who is founding partner of dbs security, and brings over 40 years of professional experience in the

design of safe facilities to our project. he has a depth of contemporary expertise and percent. and he is the security consultant of record for the world trade center and the new path station in new york as well as consulting with amtrak and new york mta on the numerous other projects in new york including the station, and 34th station and union station in dc. so i would like to invite bob to come up and present to you our experience going through and our update of our update and risk vunerbility assessment and what the conclusions of that rba were. >> chair woman kim, it is an honor to be here members of the board.

i would like to just give some background, unfortunately we have been building great buildings in the united states for years but the paradigm for creating a safe and secure facility has changed dramatically over the past 20. it used to be that the aggressor or the criminal had some value in their own life. they have given that up. and we have a new kind of criminal paradigm where the individual perpetrating the crime cares no more about their own life than those that they are attempting to change the life of. that has changed the conventional design and construction and facility operations. and in a nutshell these terrorist threats have over turned the protective design paradigm, how we go to create safe and secure facilities. what that is really meant is that there are a series of what we consider now to be industry

standard best practices, the things that do to create safe places, the subject matters and urs was to do exactly that. obviously we are interested in limiting liability. that is a certain of any board of directors, it is a concern of anyone who is in the design profession. but we also wanted to make sure that we have a safe and secure facility. you will see in the bottom, the term that the safe act designation and we are going to talk about that a little bit and i will tell you what that means.. why do i mention the safety act? >> at the end of the day, there is no facility that can be built with that risk. every facility has some degree of risk. and so we make investments in the facility against the industry standards of practi,