project law before and undergrounding. remind the if there has been a case. maybe you could make your case stronger about utility undergrounding with the use of these funds? >> to answer your question, no, this type of funding has not been used for this purpose previously, which puts us in a new process, which is a bit of a learning curve for all of us. a long story short, there are few opportunities for funding for the utility undergrounding. we received a federal grant for the streetscape improvement project, and we were hoping that it was included in that, but it was not an eligible use of those funds. we have researched this and we have found no viable opportunities. so this is the only viable source, at this point in time. supervisor avalossupervisor miri

am debating the motivation, but the fact is, you affirmed what i thought, that this is the first time we are using these funds, so of course, this potentially stipulates precedentce. so for future projects, we could perhaps see this happen again, should the ducks lined up and say we want to do you tilly undergrounding -- utility undergrounding. >> i will say one more thing. in this particular instance, it is important to note, out of the community planning process, utility undergrounding was the number-one priority for improvements. that is the reason we are pursuing it. if it had ranked lower in the prioritization, perhaps we would have looked at using the funds elsewhere. i just want to make sure everyone is aware, that is how this is being prioritized. supervisor mirkarimi: i think it

would rank very high in any number of the sectors that we represent. in terms of the sourcing of where the dollars are coming from, that is to the core of what i am driving at. this is an applicable source, one that is appropriate, as it relates to the restoration of the visitacion valley library. >> the street is, correct. supervisor mirkarimi: if you want to add to that, by all means. >> one thing i wanted to mention is visitacion valley is the first of these public infrastructure funds. this is some of the first man that we are expanding on anything from that money established in 2005. we are now able to appropriate

with money that has accrued. to the degree that it is a project that fits specifically within the transportation improvements, identified in the legislation, we felt it was important to complete our commitment to the project. supervisor mirkarimi: i do not deny the reason, nor the need. mr. rose? sorry for interrupting you. any opinion on the fact that this is the first usage of this funding for this particular purpose? does it strike any concerns or issues? >> unless there is a legal prohibition of using these funds, and i anas i understand it, this is why the fund was set up. i do not see any problems.

on page 3 of our report, we stayed on november 18, 2005, sections 319 through 319.7 were added to the city's planning code to add a new fee on the visitacion valley area to establish an infrastructure fund to mitigate impacts from residential development on public infrastructure in visitacion valley including, libraries, streets, recreation facilities, and community centers. specifically, 319 specifies $2.3 million related to the fees will be used for the construction of the visitacion valley branch

library and $608,000 in developer fees accruing in the visitacion valley fun to complete projects such as underground utilities on leland. supervisor avalos: i am sold. i have been to leland avenue and i have seen a small section that has seen some significant street scape improvements, and it is amazing. especially in a part of the city like visitacion valley that does not have anything like that. we can look at valencia, ocean avenue where we have these types of improvements, but not visitacion valley. i appreciate the work of the committee to bring that forward and to put this as a priority. the library is a special asset

in the neighborhood. i appreciate all of your work on it. colleagues -- supervisor mirkarimi: i would agree, motion to except with recommendations. supervisor avalos: we will take that without objection. mr. young, please call -- do we have the department of real estate here? ok, item #2. >> item 2. resolution approving and authorizing an agreement for purchase and sale of real estate to obtain two permanent, exclusive, subsurface easements from cargill, inc., for the purpose of constructing the san francisco public utilities (sf puc) commission water system improvement program-funded project no. cuw36801, bay division pipeline reliability upgrade - bay tunnel, for a purchase price of $650; adopting environmental findings under the california environmental quality act (ceqa), ceqa guidelines, and administrative code chapter 31; adopting findings of consistency with city planning code section 101.1; and authorizing the general manager of sfpuc to execute documents, make certain modifications and take certain actions in furtherance of this resolution. >> good morning, members of the

committee. real-estate division. the item before you today is a pc they-division reliability project. in particular, a tunnel facility that will lie within two different easements' acquired from cargill inc.. the length of these tunnels, one is 2,000 feet long, another is a data 37 feet long. this is a tunnel that will live approximately 80 feet in depth below grade at the bay. i have on the overhead a shot of the area. this is south of the dumbarton bridge. on the east side of the bay. this shows the cargo holdings.

their own approximate 8,000 acres of land -. -- cargill holdings. the agreement before you is a simple $650 payment for nearly two acres of rights, underground, in addition, an ability to pay up to $8,000 additional cost incurred by cargill in processing the transaction. that includes escrow fees, legal fees, and other associated title document that they have to work through so that we do not complicate ownership. happy to answer any questions. we also have the upuc staff her. supervisor avalos: thank you. we can go on to public comment.

>> walter paulson. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. we need a pipeline. it is going to do some good in a special way i am so glad we got it underneath the bay good day pipelined it is going to keep on a shining supervisor avalos: if there are no other members of the public that would like to comment -- seeing none, public comment is closed. colleagues, move forward with recommendations. mr. young, please call item 3.

>> item 3. resolution authorizing the master lease of the windsor hotel at 238 eddy street for the department of public health. >> i am back. this particular lease is for the department of public health for their direct access to housing programs. the property is as 238 eddy street. this is also known as the windsor hotel. it is a 99-unit residential complex, on by a limited liability company. in this particular location, we have 45,800 square feet of residential space for those 91 units, another 5656 square feet of credit space. serving in totality, direct access program.

the lease deal points provided for your consideration today are a lease of $45,444 per month for the residential units, $5,181 per month for the clinic. these rates are the same rates as were in effect last year at the property, so there is no increase in the base rates. the property was under a prior long-term lease. that has been on a month-to- month holdover for much of 2010 as we negotiated certain terms and conditions of this new 10- year initial lease with two 10- year options. the increases in rates are calling within a cpi inflator of no less than 3%, no more than 6%. the reason for the delay in bringing this forward as a new long-term lease, dph and real- estate wanted to see evidence of

good faith of making certain improvements to the property. we feel that has moved forward expeditiously we also wanted to guarantee a cap on future expenses that of no more than $5,000 per year, if there are capital needs within the building through the term of the lease and extensions. and we have a secure that in this agreement. i think the budget analysts report goes into considerable detail on it. we have no problems with that. happy to answer any questions. i believe dph also has a representative here. supervisor avalos: thank you. mr. rose? >> members of the committee, the rental rates would remain the same in fiscal year 10, 11, so no increased cost to the city. i would also point out on page five of our report, tabled to, the proposed rental rate of

$5,992 per resident per year at the windsor hotel is about 20% less than the $7,400 average rate per unit currently paid by dph for other similar hotel operations. we recommend you approve this resolution. supervisor avalos: thank you, mr. rose. if we could open this up for public comment. >> we have had a dream about leasing the land it is time you give us a grand then we could settle down in this city and town i know it is going to be on eddy street you are trying you are trying now

i am glad we are going to lease some land. give us a grand and we can settle down in this quiet town give it the best you got i think it is going to be on eddy street you are trying you are trying, budget committee now supervisor avalos: thank you very much. if there are no other members of the public that would like to comment, we will close public comment. move forward without objection. >> >> item 4. resolution authorizing the director of public works to execute an amendment to a professional construction management services agreement for the san francisco general hospital rebuild program from $8,000,000 to $16,400,000. >> good afternoon.

my name is ron alameda, project manager for the seventh is good general hospital rebuild program. i have a short power point and some hard copies to hand out, if he would likyou would like. we are seeking the approval to increase the construction management project to $16.4

million. supervisor avalos: is that microphone on? >> sorry, i will lead into it. we are seeking to increase the contract in order to continue to support and add additional support to the rebuild program that has been advancing nicely over the last couple of years. we are also adding support to end adjusted generator project, which you may recall has been absorptive the project recently. this will also allow us to continue our current forecast of 27% lbe participation, as opposed to the contract goal of 28 -- 14%. two years ago, by way of rfq, jacobs engineering was initiated into the sfgh rebuild team,

including the design team, executive andof construction manager. jacob has been a great asset to the team. so much so that we continue to tap him in additional capacity is. as we progressed and grew into a team, the roles and responsibilities of jacobs team members have expanded. we had created in 2007, began to formulate the delivery method of this project. what we based the original contract on was participation by jacobs on a more periodic validation rule. as we move forward, we found the

need to continue to use more in a full-time capacity for cost and schedule of validation, as well as adding a $20 million emergency generator project. you may recall, that is a predecessor project which we began to realize was going to impact our schedules, in so much that it was trending not to be complete in time for us to do the rebuild. so we melded the two projects together and we were able to preserve the schedule by way of melding those two projects. supervisor avalos: i was told a big part of the delay was getting permiting through sacramento and there was still lives on the part of the contractor, but there was a backlog, and furloughs in sacramento led to delays.

is that your understanding? >> there are a number of things in play. important on both projects is the existence of furloughs. we have experienced delays in design and review, permitting of all the project increments included in the emergency generator. i am happy to announce that we have the permit in hand as of two weeks ago. so we're moving forward with the emergency generator project. in terms of the rebuilt, we have parsed it up such that there are a building permits required between the city, seven from the state. we have five out of eight in hand. now we are focusing on the remaining three, which are advancing as planned, but the worry of furloughs continues to haunt us. another element that touched on

the emergency generator is, it was a predecessor project and it took time to identify funding and initiate the project. we were getting pushed even before we went to oshpod. that is why i suggested we meld the two and do the efforts concurrently. it is a bit of both. at any rate, between 2010 and 2008., we have monitored our use of jacobs and have readjusted in light of these forces. that is what is driving the increase in contract. i do want to underscore, the over all approved budget is

sufficient to take care of this increase. so we are not looking for any additional funds, just contract and capacity, since we are over the $10 million threshold. when we did this forecast, we also looked at what was happening in the market and benchmarks similar hospital projects. i have listed a number of similar projects. they have similar needs. supervisor elsbernd: i have a question, a more general principle that i am concerned about. this chart brings it forward. we have webcor as our general contractor, and now we have someone overseeing them. and then we have you and other city employees overseeing everyone else. nowhere on this chart is laguna

honda. when we did that, we had turner. i do not remember having somebody other than city staff keeping an eye on turner. why do we need yet another layer of people watching? >> there was a three-fold balance developed. again, i am committed to having a third-party cost estimates in this schedule review. that is principally what they were brought in for. as well as adding the generator , which was not even contemplated in 2008. at laguna honda, i know their

makeup and mix was a little bit different. it evolved over time. i think they went in as a design-build and then migrated into more of a cmgc model. it is kind of the same but different. where i was trying to drive the recent benchmarking is, we are continuing -- one, this is a common function in the makeup of the team. to that end, we have continued to drive toward the lower end of the ratio. with the increase, we have a ratio of 2.24%, ratio fee versus

construction. it is continuing to be on the lower end of the spectrum. my last slide, in summary, we did commit to balance out the city staff as well as consulting staff. this diagram illustrates the makeup of the different roles for construction management. simply put, the blue boxes are city staff, graieen, jacobs. each stream of activity is coupled with city staff, their skill sets, as well as jacobs' expertise in these projects. it would meet our commitment of expanding cities that as well.

in summary, we have built a strong team of designers, contractors, construction managers, and panting the program at an aggressive pace to accomplish much. jacobs has been instrumental in rounding out the team with talent, experience, and data unavailable from other sectors. as we said earlier, we have balanced out the construction management with city employees, that of consultants, needing to grow the broader experience. with that, i will take questions. supervisor elsbernd: i have one for you. a source of funds, dollars to be used to pay for this increase, are what? could you explain this to me?

revenue from some sort of police? -- of lease? >> members of the committee, and these are the san francisco general obligation bond funds as originally authorized. >> to address this need, we had originally had a budget item. we are still looking at the soft costs.

we are also tapping the lease finance funds that came to. the emergency generator projects. yes, we have identified savings on the construction side of the balance of the budget, but we are not tapping that to take care of this. supervisor elsbernd: what i am reading from the report is that you are using $1.2 million from the emergency generator project and $7.2 million in cost savings. is that not accurate? again, the more fundamental point, and this is based on the city's experience with laguna honda, one of the ways that we sold this to the electorate, the general hospital, we did all kinds of preconstruction work, we learned our lessons with laguna honda for failing to do

that. hopefully, with general, we have done our due diligence. we are not even one year into the project and we have already found that -- we have found $60 million in savings? what does that say about our original cost estimates? >> the market shifted on us considerably. supervisor elsbernd: so it is all market? >> there are a number of factors. the market is favorable right now. we are diligently reviewing all the models. we are incrementally developing -- we did the original budget of of schematic drawings, which is further than other projects have sprung up in terms of depth of information. as we progressed to the design element and construction documents in permitting, we are always revisiting the budget,

revisiting how we are utilizing team members to try to optimize and recognize where things are running long, where things are running short. supervisor elsbernd: remind me, have we already issued the total bonds, are we doing it in pieces? >> in pieces. there have been two bond sales. we are assessing the size and timing of the third bond sale. that is some time next year. supervisor elsbernd: so even though the voters have authorized us to issue bonds up to a certain number, if the market continues to perform as it currently is, there is a chance we may not even need to go to that number? >> it is a question of timing. we are looking at buying out the entire job by next summer and then having a better idea where it will come in. then there are some other costs as well. we will have a firmer no. then,