there is a level of -- that we are providing. as a matter of policy, it makes sense when they request a bid to be very clear about what we're trying to accomplish. understand the importance of the capital improvements peace, i feel the minimal annual guarantee should have been included. to me, that is the only way to would have known if this is indeed the best deal. the fact that you were able to get 20,000 more in the last few days is an indication that there was movement there. the question remains is their

movement beyond where we are today. i want to give some deference to the department. we should not be in the business of second-guessing those specifics. i don't think that i would have approached it that way. at the end of the day you want to have the ability to ask each one of the respondents what you are willing to do for the city whether it is capital improvements or the minimal guarantee. that is the only way you'll know if you are getting the best deal. if you are doing that, there is speculation involved. i don't know if that is the best approach. thank you. >> i want to speak to the minimal annual guarantee component. many of the comments that were made are reflective of the

shared fought about whether or not and minimal annual guarantee component should have been included in the process. many of us understand that the office had problems with -- that did not result in the capital improvement which was helpful and necessary to make sure that the pope house is available for future generations. when the process originally took place and was put out there, the criteria on how it was that different respondents would be touched was actually part of the process. there was an opportunity for a formal process or appeal. someone that is actually said a minimum guarantee should have been part of the process. there was no such formal appeals that were submitted to the city.

the city has an interest in making sure that most departments tried to get a guarantee in the future. >> i think grander stand at the point and the point i make about the minimum annual guarantee is going forward and this is something that as a modern a policy should be the norm. there have been several prior -- that i can see the reasoning. just one last question, why 15 years as opposed to a shorter amount of time are we potentially -- shouldn't we think about making it 10-15 years.

>> this reflects the need to amortize. we have a red formula which reflects a growing market bit that we can benefit up from overtime. >> can we set up a recycling program around the lake? >> we have been working on a recycling program for golden gate park, outdoor cycling does

require a little bit of different operational support and investment ban indoor. >> i was there with my family on sunday and this is what our trash cans look like. if we are at the juncture of trying to modernize, upgrade, and make more attractive and at the same time protect a certain reputation and expectation of ourselves, i wouldn't least think that person recreation are the ones that are going to help illustrate that example. to only illustrate that, these are the cancelled around the

lake. we like to visit and walk around as well. i think that it is really important that these are opportunities that if in fact there is going to peak this profound change, a new vendor will do what they intend to do. that is what i'm looking for in this discussion. if we are sincere about adding to greening the city and setting the example, then i expect the park and recreation department to do with the cans to meter so that we can and -- do the best we can to watch our water and electricity usage. and some idea about the ticket their enhancement that there is a wildlife plan considering that

the crown jewels are about respecting and protecting nature. some of the aesthetic qualities as well as the ethical understanding of what we do that we would to some basics like recycle. since none of that happens right now, then i would it these help -- hoped that the that goes into consideration. an afterthought of instituting the idea of a -- in an rfq is a leftover bad habit from yesterday. there are those that have a parallel process to the board of supervisors unlike other supervisors. i only hope that it does not become an afterthought and if it does it will raise questions

about the process. we would like the best contract since the city benefits from the earned revenue. thank you. >> did you have something to add? >> they have committed to a one- year -- which is 85%. all of this will be two standards. for cycling will be a requirement of the lease and side of the facility. >> i know that supervisor

mirkarimi visited the other side recently and this was one of the education process. this raises awareness of water and energy conversation -- conservation. it is good for children and families to learn about the processes as well. i agree with the recommendations that came from the budget analyst report and strongly urge the wrecks and park department to look at these like they do on the airport leases. i think that the ortega family has shown through their concession stands in muir woods that there are working with local companies. on the costs at the address or

impressive to me and it will not raise the cost very much and it will greatly improve the quality of food. two to three employees that are currently working with it concessionaire will be about -- and it will be 100% local. this is a contract that will improve for generations to come. >> can you please call the role? >> aye. >> aye. >> aye. >> aye. >> aye. >> aye. >> aye. >> aye. >> aye.

>> aye. >> aye. >> there are 11 ayes. >> this resolution is adopted. >> a resolution retroactively approved an amendment numbered 2 to the north terminal book's release. >> this resolution is adopted. >> item 6 is a resolution approving the issuance of a not to exceed $1.6 million in debt principal amount of san francisco internal second series refunding revenue bonds to refinance -- refinance airport bonds. questions resolution is adopted. >> item 7. >> resolution adopted the settlement of potential litigation involving the restructuring of $120 million

california infrastructure and economic development bank of variable-rate revenue bonds. >> this is a question for city staff to. so why understand the situation, there was previously about $119 million debt on the books and jpmorgan agreed to wipe out about $21 million. we are reducing about 98.4 million. the asian art museum has about 78.5 million in and restricted access on the books. about a 19.9 liability that we are exposed to. it is that correct? >> >> members of the board, that

is correct. >> i think we debate the merits of the city's standing by heine to this which for many reasons i am in favor of that. we have about a $19.9 million exposure right now but my question is whether that could not grow to 50 million. right now, the asian art museum has its separate investment committee. in accordance with the settlement, we are going to have as a nonvoting member on the investment community but in reality no direct jurisdiction of what they do with that capital. our exposure would go from 19.9

million to 50 million. >> the unrestricted assets of the foundation which the board of supervisors is not have control over which is 70.5 million. because of the stock market or any other reason those assets went down, that would mean that the city's exposure would go up. the city's total exposure would be 98.4 million that the foundation would 0 jpmorgan under the settlement agreement. theoretically, it could go up to 98.4 million. >> fundamentally, what you're pointing out is correct.

we are standing behind the asian art museum foundation and in essence cosigning the loan so we are exposed to risk that the capital campaign requirements needed to make these numbers work and at are not matt. in working with the city attorney's office, we needed to waive those risks that are largely long-term in nature. we needed to weigh the risks.

were we to lose the benefit that this gives to the city. this is the risk. it is our immediate risk that this is a fear. quarks this is something that we should be supporting as a board. the concern is that we are assuming a risk with no jurisdiction or voting power over the investments that are made with our money that we are cosigning for. >> we are assuming risks. we do gain opportunities with the foundation as part of the

settlement agreement. the city gains and three nonvoting members to committees on the foundation. perhaps most significantly -- secondly, we gain the requirements that the foundation and the goes and organizational review. we gain a requirement that the budget or any modifications needed to be presented by the comptroller's office each year. that is our ultimate new authority over the foundation that we did not have before. >> the city was comfortable with the investment policies. i don't know if anyone is here from the asian art museum.

>> yes, we have reviewed the investment policy and we do not find it that abnormal or different than the nonprofit arm of the fine arts museum. fundamentally, what caused this transaction problems several years back was not due to an unusual investment approach. these were due to the market downturns in 2008 that exposed the city to really sincere in >> problems. unlike the fine arts museum or other institutions, the asian art museum did not have enough assets on hand. yes, there is an issue from the -- as is the cfo.

>> good afternoon. thank you for the questions. i believe that our investments have been where the benchmark was. i think that the investment philosophy has been sound as pointed out by the comptroller. it is really the market downturn that started to make the problems. if you need more details -- i know a lot of people were severely hurt in the latest recession for a number of reasons. the city's one of you, having no voting authority under the assets that are held by the investment committee. are the conservatives in nature so that these don't go from 20 to $30 million?

>> to give you a typical slice about what the investment portfolio consists of. >> i am the chief operating officer of the nation. we appreciate your support. the investment committee is comprised of really 15 professionals in their field. the individuals listed on the committee and he will feel good about those on our side.

there is certain elements of private equities and it would be in any sort of portfolio that is over $92 million that we have invested at this time. >> this is more of an endowment approach and a more risky approach. >> this is a typical sort of endowment approach and conditions to meet the current liquidity needs. >> thank you very much. >> i very much support we are doing and is about our cities assets right now. >> i need to want to thank the supervisor for this questions.

is there a reason why we are a nonvoting member for those committees? what is the distinction? >> we need to be able to assign some staff that we would think have expertise which would assist with the device. our interest was bringing people to the table to help advise rather than controlling the votes on the committees. fundamentally, if you would like to call this a hammer, and ability to enforce change on the foundation and the unfortunate

circumstance if we need to. we feel the approval was by far the most useful and correct. >> this is not the only institutions facing this kind of financial challenge, if you will. there are many more that is the case. -- which are very important institutions. at some point, we need to figure out a strategy for us for city government to deal with these

kinds of issues. we had a vested interest to make sure that we help these institutions. whe this is an issue that will e with the city government. we will be ensuring the viability of these institutions. i do think that there is a larger question to be addressed. thank you. >> i just wanted to say that i am supportive of the settlement

and. i like to thank the -- for their work on this. the city attorney played a large role in that. this is the best that we can do under the circumstances. i want to thank you for your work. >> one of the things we talked about and budget committee is where this transaction is where everyone has some skin in the game. we know the foundation is on the hook for raising $20 million.

as we think about other organizations, we need to be clear that the asian art museum is an exceptional example of this because of the requirements that we have with the collection. part of the agreement was a commitment to have to display that. the difference with this organization and the asian art foundation and others is that whereas we might be giving money to other organizations to provide services, the asian art foundation is helping to relieve our costs towards providing services for the collection. where as our operating costs would have an $11 million hit, we don't have that.

the building is city owned and not at risk here. thank you. >> any further discussion? can we take a roll-call vote on this? >> aye. >> aye. >> aye,. >> aye. >> aye. >> aye. >> aye. >> aye. >> aye. >> aye. >> this resolution is adopted. >> item 8 is an ordinance amending article 4.1 of the public works code to provide pro petitions -- prohibitions,

limitations, and requirements for the discharge of fats, oils, and greece. >> this passes on first reading. >> item 9, supporting the assignment of the mental health services act statewide and early prevention allocation totaling $3 million. >> this resolution is adopted. >> ordinance amending the environment code to amend the san francisco environment code requiring owners of nonresidential buildings to conduct energy efficiency audits. >> this ordinances passed on the first reading. >> item 11, when ordinance amending the public works code to ban distribution of handbills on private premises unless they are attached to or placed upon and did not damage the premises. >> i will defer to the sponsor.

>> this is an item that has passed unanimously by the committee. there has been a number of members of the public that have raised some questions. >> we would like to defer this for two weeks. and we would like to answer questions and hopefully there will be any issues. >> that is a motion. >> is there a second? this has been seconded by supervisor avalos. >> i appreciate the opportunity to discuss this further. i know that this is not much of i know that this is not much of the change between the curre