providing revenue and levying property taxes ending june 30, 2010. item number five, ordnance providing revenue and levying property taxes for san francisco unified school district ending june 30, 2011. item number six, order nansd providing for revenue levying property taxes for fran bay rapid transit district. item number seven. resolution establishing the appropriations limit for fiscal year pursuant to california constitution. commissioner avalos: thank you. >> i'm kneel levinson. -- neil levinson. what you have before you is probably one of the most important pieces of legislation. or several. as it brings in over $1 billion of our general fund as well as the other entities. what we have with these four ordinances is a property tax rate which comes to $1.164 per

$100 of assessed value. this is a very slight increase from the prior year. largely as a result of increased debt obligations of the school district. the impact on a home that was assessed at $500 a year before -- $500,000 a year before is approximately $8.62. when you combine the fact that the assessment -- that's a $400,000 is the analysis that we did. is about an $8.62 increase in their taxes from a level of $4,555, to $4,563 rounded. that's as a result of people who have not had other adjustments in their property tax this year would have seen a slight reduction in their assessed value through the automatic cost of living increase. because of an actual negative in the cola, then the slight increase by this rate results in about $8.62 increase.

i'll be happy to answer any questions about the components of the rates. the other piece of legislation before you is required by the state constitution that there be a report on the limit that limits the amount of spending under certain conditions for both the state and local governments. what our report shows is that the city remains well under our limits. this establishes what the limit would be for the city for these types of spending is about $2.4 billion. and that the amount of spending subject to this requirement is under $2.1 billion so that we are still well within that limit and don't have to take any special actions as a result of it. commissioner avalos: has there ever been an occasion where the city has gone over that or gotten close to that limit? >> no. commissioner avalos: ok. thank you for your presentation. mr. rhodes? >> mr. chairman, members of the committee, the only thing i

would add is we used a $500,000 example for a single family residence that would result in an $11 increase in the property taxes. we recommend approval of all of this legislation. commissioner avalos: very good. thank you. comments, questions? we'll open this up for public comment. thank you mr. levinson. item three through seven are open for public comment. we will close public comment. >> motion to advance with recommendation. commissioner avalos: we can take that without objection. all those will go to the full board with the recommendation. mr. young, if you could please call items number 8 and 9. >> item number 8, resolution aprolving an authorizing execution of amendment number 1 to lease, use, and operating agreement for bart station and related facilities and grant of easement at san francisco international airport, leeze

number l 97-0081. item number nine, resolution approving the terminal two news stand coffee and specialty stores lease we'll host international incorporate the and the city and county of san francisco, acting by and through its airport commission. commissioner avalos: thank you, mr. young. >> thank you. welcome back. good afternoon, supervisors. kathy weidner with san francisco international airport. i'll address item number 8 to begin with. which is a lease modification to the airport's lease use and operating agreement for the bart station of the airport. as you may recall, bart fairs to and from the san francisco station include a premium fare and in july of 2009, bart increased that premium fare from $1.50 per ride to $4. this increase represented a

substantial increase at the cost for airline, airport employees to take the bart system to and from the airport every day. so when that increase in the premium fair began, the airport started a free shuttle service for airport employees from the bart station to the international terminal at the airport. commissioner avalos: that was for city airport employees? >> yes. for city employees who work at the airport. airline employees were also eligible to use it, although their 25% discount that pre-existed this agreement with part was in place. so many of them just continued their normal routines. at the same time that we started the shuttle, san francisco airport and bart also sat down to try to negotiate a compromise to make the premium fees go back to the $1.50 from the $4 for airport employees. after a series of meetings and discussions and concessions, the

result of those negotiations are what are before you today in the form of lease modification. the airport has agreed to certain changes in the current lease that we have with bart in an attempt to get the $1.50 surcharge imposed just for airport employees. and that is the -- that was our priority in making some of these concessions. the airport does believe this is the best way to address the situation for our employees, and we both the airport commission and our board of directors has approved the agreement. and we ask for your approval as well. i would be happy to answer. there are a lot of specifics, i would be happy to answer any of the questions you might have. >> just one place i haven't -- one part, one piece i haven't really heard much about is from airport employees. particularly by email, haven't

gotten too many calls what the response has been from airport employees, were they part of negotiation, how were they informed about what went on in terms of negotiation to get back to the $1.50 level? >> there were many, many meetings with airport employees. i think mostly through unions when the surcharge was originally increased. we had lots of public comment at our airport commission meetings around this item. our airport commissioners heard from them. i believe that maybe what happened is once the shuttle started running they felt like, at least they had another option. so maybe perhaps that's why you hadn't heard -- you didn't hear directly. the airport staff has heard from them and this is something that has -- that is very important. it's a big chunk on top of the fair they already paid to ride the system. and it makes a big difference. hundreds of dollars for some folks per month. so this returning to the $1.50

at least brings them back to what they were used to paying about a year ago. so we have gotten good feedback on this compromise. commissioner avalos: when do we expect the shuttle service to be discontinued? >> we have agreed with bart that once we have approval from this board on the agreement, we will notify employees and we will discontinue the shuttle service within a month. 30 days. commissioner avalos: it seems like that disruption is a place where you're going to see -- now that people are not paying premium and they'll see a dent in their pocketbook, happy to pay now the new -- the re-established premium to the airport, which i support. i just think that that's part of -- that disruption could be something you might hear from. i might hear from as well. what you are anticipating to be the response. >> we have been in communications with the folks

that depend on the shuttle right now. we have done surveys. we have handed out information notice about what we are planning to do and asking approval for. so i don't -- i think everyone knew that the shuttle was always temporary. actually went on probably longer than the airport anticipated originally. but i don't think it will be a surprise. everyone who rides the shuttle has received a number of communications around this issue. they know that the shuttle is coming close to an end if we get approval on the agreement from the board. commissioner avalos: great. >> i was in the airport last weekend. don't you even have notices up all over the place by the bart station to employees? >> the bart shuttle from the station comes right to basically outside of the curb at the international terminal where the bart station is, i believe there has been a series of communications posted there. i haven't seen them recently but in the past. i'm not surprised to hear there is a new one.

>> there is. i have seen it as well going through the airport. what's the population of employees we are talking about? >> bart estimates it's about i believe 6%. let me make sure that's right. i'm sorry, 3% of all bart trips to and from the airport are airport employees. and again it's hard for us to know exactly who is riding the system. we believe it's a few hundred people a day who are airport employees who ride the bart system to and from the airport. >> is it possible in this conversation, can you remind me what the parking policy is for airport employees? >> for city employees who work at the airport, airport commission employees, parking is provided. for any tenants -- are we talking city employees? or anyone who works at the airport? >> city employees. then other.

>> city employees are provided parking if they need it. you have to apply and you get a permit and there is space at the airport depending on where your office is. it's not all airport terminals. some is off airport. some of it is in the parking structure at the terminal. but if you are a city employee who works at the airport you are provide add parking space. >> and that's gratis? >> one more time? >> free. >> yes. >> then for those who work at the airport but not city employees, what is the policy? >> for airline employees and for folks who rent space, concessions, people who work for our concessionaires, that's part of our contract with the company that leases space from the airport. so that ends up being some of the companies pass-through the cost to the employee. they can purchase it back if they'd like. some provide it free as well. i think that there are some

airlines who have spaces that they don't charge their employees to use. >> i know you do not come here prepared to talk about that, but i would love to get a little more spess physicality on what -- specificity on what that real population is of parking spaces used? >> numbers, you'd like numbers. >> i would appreciate that. >> that we provide for free and we receive rent? >> that's correct. thank you. that would be very helpful. i'll share it with my colleagues. >> ok. commissioner avalos: while we are on bart airport contract, let's have mr. rhodes present the analysis report. >> mr. chairman, members of the committee, i'll add a few comments. first of all the airport receives $2.5 million a year from bart.

that was an agreement previously approved by the board of supervisors and that's for the debt service, flat, over 50 years. under the existing agreement, bart pays that $2.5 million in advance. under this proposed agreement, bart wants to be treated like other airport tenants so that they would pay on a monthly basis therefore the airport would lose the interest income that they are earning now which is not that much. it's about $16,000, $17,000 a year, about 1.5%. it's not a big deal, but it's something that i want to bring to your attention. the airport would get no portion of the advertising revenues if you permit bart to advertise at the airport. however under prior agreements

between the m.t.a. and bart, the n.t.a. actually receives advertising revenues from bart in all bart stations throughout the bay area. and in this particular case if you approve this agreement, it's estimated that the n.t.a. would receive about 15% of $64,000 in fiscal year 2010-2011. this is based on the minimum annual guarantee bart gets from its advertising contractor, and about 15% of $487,000. so that's -- the n.t.a. would receive a minimum based on that of about $467,000 from bart and that's through september 30 of 2018. the airport receives no revenues. on the other hand, if you approve this agreement, the free shuttle bus, which is costing

the airport over $500,000 a year, will be eliminated. so that certainly is a benefit and it's already been explained the benefit to the employees by getting the reduction from $4 to $1.50 in order to go directly to bart. supervisor, i think that's the important issues in our report. and because of the aesthetics issue which members of the board of supervisors has raised in the past, we consider this matter to be policy for the board of suse advisors. commissioner avalos: thank you, mr. rhodes. any other questions? on this contract? then let's go on to the lease item. >> supervisors, i will address item number 9 which is what we hope to be one of the last,

there may be one other coming, but you have approved over the last few months a series of new leases for the terminal 2 opening which we hope will -- we anticipate to be opened spring of this year. or 2011. this is a piece of the larger concession program that you approved. this was something that came in originally and staff decided some of the concepts we received could be flushed out a little bit. so this went back and came in on its own. this is a new lease in terminal 2 with host international to operate a news stand, coffee, and specialty store operations. it consists of five separate spaces, only one of which is presecurity, a coffee shop. there is a large news stand and gift store, another small news stand in another location, post security. a clothing, retail outlet, and specialty keels outlet. it consists of five different

sites under this one lease with host. the lease term is for 10 years. and the grant with no options to extend. the rent is the greater of either a minimum annual guarantee or the formula of percentage rent based on gross revenues that you have seen on all the other leases. the mag for this lease is $1.12 million, although based on the protections of sales we believe that this contract will be paying on a percentage rent, at least in the first year, with an estimated rent in the first year of $1.320 million. the award of this lease is based on a competitive request for proposal process with host deemed to be the most responsive and responsible there. i would be happy to answer any questions. >> thank you. commissioner avalos: thank you for your presentation. mr. rhodes.

>> mr. chairman, members of the committee. this was an r and p process. host has been recommended as the winning bid iror proposal. i would point out on page 2 of our report that host has bid the lowest minimum annual guarantee of $1,126,000. i point that out just a as a matter of fact. however when you consider all of the criteria that the airport used in their evaluation, host is the winning bidder and we do not question that. we recommend that you approve this legislation. commissioner avalos: great. thank you. so we are about in terms of the incidents for the first year of the lease we are about $200,000 over the mag? >> yes. based on projected sales for the five different locations. both host and airport staff has looked at the projections and agreed they will most likely pay the percentage rent not the

magazine commissioner avalos: i found it interesting in the report -- mags. commissioner avalos: i found it interesting in the report, one of the primary factors being considered, that there are a lot of bids that turned out to be not able to get to the mag. i'm wondering how common that was in the past just for my own information. >> i believe that that may have been part of why this is separated out from the original package that came to you. airport staff who looks at these mags and traffic and projected sales i think we are just not comfortable with the concepts that were originally prevented. meaning they probably wouldn't going to get close to their mag. commissioner avalos: was that paced on experience? a -- based on experience? >> i think it's based on looking what happened in the past. location of the different sites. and the traffic that we anticipate to be moving through

there. that is why i believe this came as a separate item. they brought it back in house to re-evaluate and look at different concepts that would ensure better success so that we would prefer that they exceed the mag, obviously, and pay on a percentage of gross revenues. but that everyone was more comfortable they could get close to the mag and we wouldn't have to come back and say we need to re-evaluate this in the future. commissioner avalos: thank you. supervisor elsbernd. commissioner elsbernd not so much a question as it is a complement. if you read or anybody read the articles from the "l.a. times" over the weekend about all the horrendous bidding process that is happening down in l.a.x. for the concessions down there and how it goes on and on and on and on, i just say to any airline watching, anybody considering do we want s.f.o. or l.a.x., watch

the process here, see how it works and your answer will come to you quite quickly. >> thank you, supervisor. commissioner avalos: supervisor mirkarimi. commissioner mirkarimi: thank you. earlier this year we had a conversation with director martin and the question came up and wasn't answered at the time and said he would get back to us is this is considered san francisco property, correct? so that when businesses are contracting with the city, the question was is, what level of compliance was there our work force for source agreements for these contracts extended on airport property? so in this particular case, how would that play itself out in terms of their requirements and compliance in hiring people as it sees fit with our local first source hiring requirements? >> if memory serves, i know that we looked at the extensively during the budget process.

i do think something was produced. i will make sure that whatever it was we gathered i get to you. my recollection is that the first source hiring requirements are part -- will be part of these new leases as they would be with any contract. we would use the language that the city requires us to use with any new contract. so the first source requirement language would be a part of these -- is a part of these new contracts. commissioner mirkarimi: can you just confirm that this is exactly the automatic sort of part of your system as well, too? there had been some confusion in the conversation if that was really the case or not. >> i will confirm it. my memory was that we -- the language, first source language is required to be included but there were some questions about the reporting that happened after the fact. i will confirm that for you. commissioner mirkarimi: thank you. appreciate that.

go to public comment. commissioner avalos: we can open this up for public comment. these two items. item number and 9. two 8 an 9. we'll do two minutes. >> budget and finance pauler paulsen. i see they'll be leaving on a bart train, ♪ and i hope that it's a good prize oh, i know you like to ride the bart train there's so many stations you can be found and the price is great all around i know it will be good all the time you're leaving on a bart train and i know the price is going to stay the same oh

i know you like to ride the train and you can be found in every station along the way and i know you're going to make it good today and come fly a good concession price come fly come fly away it's going to be great you're going to fix it the price because that's going to be done today come fly with me let's fly with me let's make pack it up and let's pack the price up and fly away in city land it's going to be a good concession price today and we're going to fix it up and fix it up the way the city way come fly with me come fly a good price for this concession

item nine and eight today ♪ commissioner avalos: thank you. if there are no other members of the public who would like to comment on these two items we'll close public comment. and colleagues,. >> motion to advance with recommendation. commissioner avalos: ok. we'll take that without objection. those two items will go to the full board with recommendations. mr. young, if you can call our last item, number 10, please. >> item number 10, resolution authorizing the lease of 1,426 square feet of space, a license of 2,400 square feet and the shared use space of 1,360 square feet to the elias m. nasra and family partnership, california general partnership, and city hall low created at 1 dr. carlton b. goodlett place.

commissioner avalos: welcome. >> welcome back. members of the committee. assistant director of real estate. so i want to give you a little bit of background as to how we arrived at what's before you today. back in early 2007, mccall, who is operating a mobile cafe operation in the north light court terminated their lease. following that termination we decided to pursue a social enterprise and cafe operation in the north light court. and this board approved a recommendation to have juma ventures operate that which lasted from spring of 2008 until, unfortunately, spring of 2009 when their financials were just not performing at all. so they elected to affect and early termination. there was a penalty associated with that early termination in

terms of forfeiture of their security deposit. which actually made the city financially whole until currently. now it's in agreement that results from a competitive solicitation process an offering of one operator for both the north light court and the ground floor cafe. we are not recommending the current operator, chaun su park and i'm personally handling discussion was her counsel to ensure that our transition to a new operator should what's being presented is approved is smooth and any funds potentially owed for unadvertised value of improvements or other things associated with her initial lease are fairly lined out and she's compensated accordingly. those discussions will go on a separate track add mrltively in

accordance with her current lease. the item before you today is simply the new lease. what i'd like to do is introduce your new building manager who we promoted back in december of 2009, rob ryder, don't know if you had a chance to meet him. he will provide you with the details of the current lease under consideration. commissioner avalos: thank you. mr. ryder, welcome. >> thank you very much. the lease before you is a five-year term lease at $1,500 a month or $18,000 a year. the -- it also has a c.p.i. index in terms of increases. the operation of the north light court lease and ground floor lease will be as john updike mentioned, a unified operator. the cafe on the north light court will be offering other amenities, sundries, a wifi service, paper magazine, period cals -- periodicals, a small flourist as well.

under this lease the operator will be using sustainable foods and healthy food choices, compoastable utensils, etc. if you have any questions, i can answer those now. >> thank you. >> mr. chairman, members of the committee. as has been stated this was an r.f.p. process. the winning recommended bidder is elias m. nasra and family partnership. you can see on page 3 of our report in table one their rental bid amount of $1,500 or $18,000 a year. we recommend that you approve this legislation. i would point out that if you look over the past several years, actually this $18,000