obligations fort -- for the safely revenue obligation. >> i have a report for the report. i will try to make this quick. so this is a second series of revenue bonds. very exciting. if you remember we issued these a few years ago and we down sized the series to make sure that we had everything in place before we issued a larger series. this is a larger series. we are asking for authorization of up to $175 million in revenue bonds. depending on the market this will probably come down. we are asking your approval related today bond financing. let me go through a quick presentation on

the overhead. >> so, this is for quick, everyone's recollection in 2007, proposition a allowed us to issue revenue bonds at this time. both you and the board of supervisors have to authorize the issuance and the controller has to certify that we have the financial capacity to pay the annual debt service. in 2012 we issued our first revenue bonds and got our first set of ratings which were split. moody was a a and single a and we had a former policy to issue our revenue bonds for state of good repair projects of primarily and to fund gaps where they weren't available. so, our state of good repair needs are quite significant as i'm sure

everybody on the board is aware of. we have identified that we have 510 million per year renewal backlog. we have identified as well that we need $366 million a year to replace our assets with no growth and to renew our transit assets to $150 million a year and in the next year we expect to double to $1.5 billion. it impacts all of our service and systems. and also limits expansion due to growth. the capital needs and shortfalls, the transportation of good repair. our total value of assets a little over $12 billion. we have replaced a backlog of 22 percent of our assets and this requires an annual investment of $510

million as discussed in prior slide. we have available about $15 million per year and the different between the 510 and 250 are on going deficit to keep us in good shape. on top of that we have plans that are approved. the bicycle strategy itself is about $343 million pedestrian strategy is 12 million and close to $300 million. our needs are pretty large. the revenue bonds are 1 part of our strategy to address our capital needs. as you can see there are other efforts under way. we have a different tool kit of revenue available for our capital needs and the revenue bonds. are one of the items that we are working on.

in terms of the bonds themselves, the 2012 a was -- did i do this again? sorry. i'm not competent in this skill set. the revenue bonds in 2012 a which will be financed are prior revenue bonds. the 2012 b was the new series and about $26 million in new money and now we are asking for the 2013 revenue bond about $113 million in projects in transit and parking. we are fixing a 30-year rate. a reserve fund and we would use the existing in department you are that you approved in 2012. indenture. so this next slide summarizes

the project with $150 million. they are separated into seven categories. most of it is going to transit. $90 million is going to transit. about $14 million going to pedestrian, $30 million going into parking infrastructure and the remaining going into our bike program. so, this is a break down of the request. as you can see the majority of the funds. i'm sorry, this is a 2012 status update. disregard everything i said. this is what happened in the bond issue. we issued $26 million. so far we have encumbered about $17 million of that. the 2013 project criteria. if first criteria was to fix the

gap, the 2012 revenue bonds wechlt looked at the projects with 5 years, we looked at the program that had data good repair shortfalls and make sure they align with the strategic plan and the strategies and we looked at the bond asset requirements in terms of the asset life running $30 million, the project timeline would have to be within 36 months and the cash flows and the ability offset to free up other funds. so, this is the $150 million that we are proposed for 2013 bonds. once again, $90 million is going to transit, $14 million going to bike program, $30 million to parking infrastructure and the remaining to our pet program. so it's split between our

multiple modes. the majority is going to the munis fleet. as you know we are going to have purchasing nrv's. it's a huge program and the bond is going to help finances these vehicles. we have improvements and $30.5 million and the terminals and boarding in these categories. i won't go into other categories unless you have other particular questions. you can see them on this slide. the timeline for project delivery schedules are on the slide. we pay particular attention to make sure we hit 36-month timeline window that bonds must be spent. it's aggressive and we have identified project managers for all of these projects and have reviewed the timeline to see if there are any problems and at this point we feel we can meet

the timeline window. once again we are pledging these revenues for the bond funds. they have pretty much included all of our revenues except for general fund baseline and parking in lieu because those funds if they are used would be an obligation and require an approval. these include the revenue fund resources and we've included $500 million revenue to back the bond. on this slide, it's a depth service structure. we are expecting to pay about $11.3 million additional debt service. maximum debit services

pronld lower than $17 million. the total average about $26.3 million including all 2013 bonds. it's about 2.5 percent of the operating budget. if you remember the policy limit our ability to spend about 5 percent of our operating budget so within that threshold. here is an idea of debt services coverage on a net base of 20.6 and 28.8. these coverage levels are very strong. we believe that this will allow us to access good rate, a good market pricing. so, these are the numbers that we've troun make sure that our ability to pay debt service is

strong. lastly on here is a next step. after you approve, we will be going to the board of supervisors approval and cpc which is the planning committee and we'll go back to get ratings in october and close the bonds and have the funds available in december. the rates are going up as we speak. as you all well know. we hope to hurry this up and have a successful sale. our first sale was. my guess is we probably won't see the same numbers that we saw in the first sale unfortunately. so we are asking for your approval to move forward with these revenue bonds and give the director of transportation the authority to make changes in the documents as is required. after the board of supervisors approves it. >> thank you, we have a member of the public? >> yes. herbert weiner.

>> yeah, herbert weiner. one question i have is what priority being given to the addition of the fleet? because i notice that there is lrv addition but what about addition to neighborhood buses. because the neighborhood after all is the heart and soul of the city. i think it's very important to address that need. the second thing is about revenue. i'm wondering if the bicycle coalition should pay for it. now in earlier days of san francisco, like 50 years ago bicyclist did pay for licenses. it would actually protect the bicyclist if the bicycle was stolen. some of these are very expensive and it also is contributing to the revenue of mta. and i think

that would be very important. i'm also wondering about paying for parking. because motorist pay for parking, why shouldn't bicyclist. they incest on the same rights as automobiles. conversely they should have the same responsibility. these are some of the questions i have. i don't pretend to be a financial expert. i hope i kept up with this presentation. i doubt if i have. these are questions that come to mind. >> members of the board, questions or comments? is there a motion? >> motion to approve? >> director heinecke? >> this is the third bond issue and the one to refinance to get it council to the historically

low rates and we did the 2012 with $20 million and now with 17 million now encumbered and now we are going for $150 million plan and you told us the plan to be used for, is there a plan, but we are not yet at the 5 percent ceiling. under these projections we have the obligations assuming it all is existing? is there a long term financial plan that we are going to have a 2014 bond series issue? >> in the 5-year cip that you approved, it anticipated that 2012 there were two series, one was refinancing and one was the new debt and anticipated the second issuance in 2013 and we brought a lot of this information forward last year when we did the first issuance.

the 5 years cip also anticipates the second issuance under the $102 million over the next 3 years. the idea is that this is an on going program. that we would take it all the way up to 5 percent is something we need to balance against the debt service that it places under operating budget. the revenue bond we are able to meet needs or close gaps that we really don't have any other source for. so we do anticipate a second round, a big chunk of which would be additional lrv fleet and rehab and replacement two or 3 years, hence. >> so, that all makes sense. look, i realize that we have deferred maintenance and we have to find a way to finances it and it makes sense given the rates. one question i have is given the plans for future bond issuance and given what i think we all can agree is probably

unfavorable rate structuring here, if the reason we can't push this stuff forward is that we wouldn't have the time to get it done within the window of the financing? >> yes. it's primarily a delivery issue. for example, the light rail vehicles, might be likely use of the next round of funds. we won't be at a point where we are ready to spend the dollars on that wave of light rail vehicles. other things, need environmental clearance before we can take such and action approving these revenues. this is first of all is consistent with what we have in our cip and it's what we believe that we can deliver at this point in terms of things that are ready to go. >> is the tep something you considering with funds in the future years? >> the current plan would anticipate using the general

obligation bond revenues for the tep, but depending on what the tep needs are in two 2 years and the success of the general obligation bond that could absolutely be one of the things, but the public comment earlier, these proceeds are not for the tep, it also can be used for bus purchases for earlier point because the asset life of a bus is not long enough for these bonds. what we did as part of our due diligence for this is try to look exhaustively at unfunded needs that met the bond criteria that could be delivered within this 3-year window and we this i this packet represents that. there may be some other things, but we are also a little bit mind full of the debt service burden. too final we do that is in the long-term planning is

there a plan to bring this back down or is the plan for the foreseeable future for the debt service carrying a percent. is there a plan to mind the balance or is it because we need the money upfront? >> it's a good question, but given or state of good repair needs, it's good to see the service for a long time. i would decrease operating expenditures because some of the stuff that we are spend ing in operating budget we'll hopefully see low maintenance and we'll be tracking that as well. we hope to see that side free up some of our revenues that are going towards maintaining access to debt service. >> these are very significant moves, we are taking 2.5 percent of our budget and going

towards very serious needs. i'm opposed to that but it's a significant change. >> i want to add we did call both items, the second item is authorizing that expenditures that we make in advance and support of these projects to the bond eligible can be captured by the bonds once they are issues. it's a standard process that the city uses on most revenue and general obligation bonds. i just want to be explicit that there are two different things that we are seeking. >> i'm going to ask him one more unfair question. in the past we've been criticized because funding programs or whether it's ballot initiatives, the money has been

shifted around and used for other things. i know you know what i'm talking about. are these going to be for what is described only? >> there is legal descriptions in terms of how we are developing everything from the resolution that you are voting on to all of the bond documents. we also have, we've put into place a bond oversight committee that is chaired by rudy notberg and making sure that the bond expenditures are being used. we don't have the ability legally to take the proceeds and use them for things that are not in the program. >> there are things within the programs that this administration and other things that some folks, you know what i'm saying. >> we can ask, the committee

has created policy and procedures that preinclude the redirection of the funds and as well as non-administration which we call the soft cost. we have written procedure cosigned by us and the controllers office and by dpw that we make sure we are sticking to the integrity of the bond structures. it's been echoed by the bond committee to make sure that doesn't happen. >> mr. chairman, thank you for your patience and to you too for answering if question >> i would be remissed if i didn't thank the many parties on the help on this project. bond council, financial visors, the whole team worked on this. >> the board, director ramos. >> thank you, i was very supportive of moving forward with this. i have heard it over

and over from folks how important state of good repair is if we are going to build confidence from the mta and wherever else we are looking for funding. if we are going to bond funds, it might as well be for state of good repair. i appreciate the work on staff. make sure we keep this house in order. one thing i wanted to point out to or ask about was on slide no. 4, where you are breaking down the shortfalls, you've got implementing the bicycle strategy at $343 million, this might not be a good place to go into a big debate but i thought we were looking at a much higher number than that, $500 million or $600 million. >> this is the gap. >> is there a motion? >> item 11 and 12. both items. >> is there a second?

>> second. >> all in favor say, "aye". >> aye. so awarded. thank you so much. >> item 13 removed from the agenda. item 14 to conduct a closed session. >> second. >> all in favor say, "aye". >> aye. >> there will be no discussion. with that we'll put the room into closed session. >> >>

all right t board being out of closing session to discuss the matter. the board agreed to settle the case. there is no discussion to litigate. the motion to not disclose. >> all in favor say, "aye". >> aye. >> we are adjourned. >> >> >>