be compared to our original expectations, i expect there will be some savings. supervisor chu: just a question for the health service system. a point of clarification. the city's contribution to the health service payment is based on the 10-county survey of the largest counties in california, ins " -- excluding san francisco. it looks like after you conducted the survey, a 10- county survey has actually increased for the coming year? >> yes, by 6.7%. >> $482.85 to $503.94? could you walk us through how that impacts what we pay? we current a 100% of the single employee cost. what about dependents? >> currently, the charter for active employees guarantees the

10-county amount, and for dependents, the charter says that we will pay 75% -- not the charter, the majority of collective bargaining agreements. most of them say we will pay 75% of the employee + two kaiser rates. so we have to calculate what the rate is, non-bargained, and then multiplied it by 75%. that is what is paid for essentially for dependent care. a large chunk of what we pay for is for dependent care. for retirees, the charter guarantees that we will -- an actual air difference of retirees between -- who are retired before they are eligible for medicare. their premiums will only be 50% of what an active member is.

i should look at my notes here. i apologize for not being ready for that question. so we also provide a subsidy for retirees in which -- first, we do a difference between an actual employee and a retiree. because the law allows insurance

companies to age rate coverage, their premiums are much higher than active employees. so we subtract the difference. prop e amended the charter to say that retirees payments should be half of what a non- active armond premium is. at adds to the total cost that the city pays. a symbol employee shall pay nothing, the city will pay 75% of the kaiser =2 rate. the retirees subsidies are the property and actuarial process. so the city picks up beyond the 10 counties that is guaranteed in the charter. supervisor chu: and that is simply because of collective borrowing over the years?

>> for active and employees. recoveriesupervisor chu: is thee from the public that would like to comment on this item? i do not have any speaker cards. >> [inaudible] is here. >> walter paulson. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. i want to make it clear from your loving and giving heart each and every giving year start the money off fine february in the month the money is really going to shine march is going to march down the money i'll april you are the money easter bunny

when you smile thank you for this item i gave it a whirl thank you for this item each and every day of the year supervisor chu: thank you. are there other members of the public that would like to comment? >> good morning. i am speaking in favor of the ordinance. the present system, as you know is broken. it is not sustainable. this is a small step to eliminate that situation. thank you. supervisor chu: thank you. other members of the public that wish to comment on items six and item seven? seeing none, public comment is closed. i believe there is an amendment to one of the pieces of legislation. either the city attorney or

department, could you elaborate on what that would be? >> in light of the comments regarding the plan, what we suggest the committee do is add to the very end of the proposed ordinance, because that's the provided in response to the recommendation of the executive director of health service system, the board approves the vision plan all reduce the long as it contains a provision that makes its implementation subject to the comptroller's determination that the city is administratively able to do so. supervisor chu: that is item 6 or 7? >> item 6. supervisor chu: questions from the committee? supervisor mirkarimi: i would motion to approve the

recommendation with the amendment. supervisor chu: recommendation to accept item 6 as well as to send both items forward, one as is, one amended. without objection. thank you. why don't we go to item two. >> item 2. resolution approving the sale of an improved surplus property located at 909 tennessee street, within lot no. 001, block no. 4108, city and county of san francisco, to the highest responsible cash bidder for a purchase price of not less than $1,310,000; adopting findings pursuant to the california environmental quality act; conveyance is consistent with the city's general plan and eight priority policies of city planning code section 101.1; and authorizing the director of property to execute documents, make certain modifications and take certain actions in furtherance of this resolution. supervisor chu: this item came before the committee last week. one of the purchasers had backed out of the transaction. the decision was made that it could not be sold for any less than $1.3 million.

at the time, the amendment was accepted. if the department has any additional information to that, i would advise you to speak. >> acting director of real estate. i would just like to reference the prompt update to the budget analysts report. that includes any new costs involved in the second bidding effort. we concur with the conclusion of a minimum net proceeds from the sale that would be anticipated. our intent is to report back to the border supervisors upon the conclusion of the sale and closing of the escrow with the actual proceedings amount. happy to answer any questions. supervisor chu: is there anyone from the public that would like to comment on this item? come on up. >> you load 1.3 what do you get

another debt st. peter, what you bless this one you load 1.3 on the side and went to you get another day older and deeper in debt won't you bless us some more on the item supervisor chu: thank you. are the members of the public that would like to comment on item 2? seeing none, public comment is closed. supervisor kim? supervisor kim: i have a clarification question for our budget and legislative analyst's office. i know we cannot do but a supplemental appropriation until the actual purchase or sale goes through. i am curious -- clarification

around the recommendation to amend the resolution to specify the remaining amount. whether that is different and how it can be done. >> members of the committee, supervisor kim, that is our recommendation. that should have been done before the sale that was not done. i realize the sale has not taken place, but given the laws of the board of supervisors on the surplus property ordinance, assuming the sale is infatuated at the minimum price of $1.3 million, there will be approximately five under $11,000 left over because the board of supervisors previously approved $725,000 in the department's fire department 2010-2011 budget. so our recommendation to you is to amend the legislation for the

board to make a determination, do you want this to go to the -- that $511,000 to go to the city reserve, or housing for the homeless? that determination should be made by the board, if you follow your own law, which is the city's surplus ordinance. supervisor chu: just a note to the city attorney, the issue without recommendation hypothetically is the fact that this is a resolution at the moment. it would require an ordinance in order to be submitted in order for us to appropriate the excess sale. in this situation, what i would recommend is because the department has not effectuated the sale again and we do not know what the final price or value would be, we would require that the real-estate department come back and report on what that final sales and transaction price would be. at that point in time, any member of the board could introduce a supplemental which would be an ordinance which could appropriate the money.

if that sale is effectuated, it would be in general fund reserves. the board always has the ability to submit an ordinance in order to utilize that money. is that a good summary? >> i will take that. you are right. in the spirit of the surplus property ordinance, the sale of this type of property -- the policy of the city is that it goes to the mayor's office of housing for use of affordable housing. this is not and a provision of that money. this does not achieve the appropriation. in order to move that money once the sale occurs, in order to move it to the desired place, the board would need to move a supplemental appropriation of those funds. supervisor chu: supervisor mirkarimi? supervisor mirkarimi: thank you

for the city attorney for clarification. according to supervisor kim, i would be more than happy just to reiterate our point into the record that when the time comes, we should follow what the letter of ordinance ascribes to, and that is that funds go directly to housing for the homeless. i would be more than happy to support that supplemental appropriation to make sure that it does just that. let's be clear from the committee perspective, that while there are now one or two other steps added to this, i do not want to get lost in this confusion about us proceeding on a particular sale once that takes place, then the whole other debate begins again.

i do not think that this is something worthy of debate, but i look forward to that, should somebody want to challenge that. supervisor kim, if you want to move forward with something, i would be ready to do so. supervisor chu: thank you, supervisor mirkarimi. we have an item which is a resolution before us. this was amended from the previous week. with regards to the usage of the remaining funds, we still need to understand from the real- estate department what the final body will be. i would also employ the committee and other members to think about also the $380 million budget deficit that we have and take that in context of what is going on with what decision need to be made at that point in time. with that, do we have a motion to send this item forward? okay, without objection. item three plays.

-- please. >> item 3. resolution approving modification no. 5 to the professional services agreement for construction management services for terminal 2/boarding area d renovations and related facilities in the amount of $1,710,000 for a new total contract amount not to exceed $16,850,000. supervisor chu: thank you. i believe we have kathy widener from the airport. >> good afternoon, members of the committee. the airport is seeking your approval for a contract modification with t two partners. they are a joint venture between parsons transportation group, the pc console and group an allen group to preconstruction and management circuses for the renovation project. the proposed modifications would increase the contract amount by $1.7 million for a new not to exceed amount of $16,850,000. the board originally approved

this contract in 2008 for an amount not to exceed $15 million. the contract has been modified four times since then to increase in not to exceed amount by $140,000. these individual medications were approved by the airport commission but were not high enough dollar amounts to require board approval. the airport construction design and staff deliberately modified the contract at the end of the year in order to ensure better cost control the new contract represents a 4% increase of the total cost for the project. this amount is within the 5% construction management industry standard for a project of this size the airport did reach its airport expenditure for this

contract. because of the importance of the work, the contractor has continued its services so that the opening of terminal to would not be delayed and we would not incur any increased cost to the project. that being said, the airport has not incurred costs associated with the construction management contract of approximately $600,000 over the previously approved contract amount. this delay was a mess calculation on the part of the airport staff. i want to assure you and that airport garment staff makes every item to you in a timely manner. -- tries to get every item to you in a timely manner. i apologize for the delay. i hope it will not impact your approval of the modifications. happy to answer any questions. supervisor chu: thank you. let's go to the budget analyst report. >> the only thing i would add is the 608,707 $3 owed to t2

partners has not been paid to the airport. we recommend you approve this resolution. supervisor chu: is there anyone from the public that would like to comment on this item? >> i would like to see some good change on the airport let's fix it up now in the downtown airport will i see it all rise on the airport plane i hope it turns out right on the airport range 16 million does not reallylack will i fix it up right on the airport plan

i want to see some good change by the airport plane. supervisor chu: is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. supervisor mirkarimi: motion to approve. supervisor chu: without objection. item four please. >> item 4. resolution approving the exercise of the last of five one-year options to extend the term of luggage cart lease and operating agreement no. 01-0343 between smarte carte, inc. and the city and county of san francisco, by and through its airport commission. supervisor chu: thank you. miss widener. >> members of the committee, kathy widener. the airport is seeking our approval to exercise the fifth and final one-year option to our police and operating agreement with smarte carte. this extension would continue the existing formula of rent payable to the airport by smarte

carte for the rental of luggage carts in the domestic terminal and international terminals, is attracted by the amount payable by the airport to smarte carte to provide free luggage carts in customs areas of international terminals. the financial terms of the contract remain the same as the current agreement with a minimum annual guarantee of $570,600 for the rental part in our domestic terminal. an estimated cost by the airport to smarte carte of $2 million to provide the free cards in the customs area of the international terminal. the reds payable by the airport will be 25% of smarte carte's gross revenues or a minimum and a guarantee of five and a $70,000, whichever is greater. the amount payable by smarte carte -- 2 smart card by the airport for the luggage kurds in the customs area is either $2.87

million or the actual cost of $1.27 per card used. this formula results in a net payment by the airport to smarte carte of approximately $1.5 million. the original contract between the airport and smarte carte was approved by the board of supervisors in 2002. this is our last option year on this contract. we will start a new rfp process to provide luggage carts at the airport some time in the spring. we anticipate having a new contract for board approval in the new year. i would be happy to answer any questions. supervisor chu: thank you. why don't we go to our budget analyst. >> madam chair, members of the committee, on the bottom of page four, we point out under the existing lease an operating agreement, the middleman to guarantee -- minimum annual guarantee, payable to the airport is subject to an annual

cpi adjustment but they do not yet have the latest cpi adjustment, and that is the reason why we are making a recommendation on page 8 -- first of all, we recommend you approve the resolution but we also recommend that you request the airport to advise the board of supervisors, in writing, so the board is apprised of what the actual minimum guarantee will be. >supervisor chu: thank you. is there anyone from the public that would like to comment on this item? >> you are a smooth airport operator smooth airport operator north end south end west give it a good start with the smart carte you are a smooth airport

operator you are a smooth airport operator north and south and east give it a good start with the smarte carte supervisor chu: is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. we have a motion to approve the item. i would request that we also accept the budget analyst recommendation to have the airport come back to the board and let us know what it ends up being. without objection. item five. >> item 5. resolution authorizing the general manager of the san francisco public utilities commission to execute water system improvement program- funded professional service agreement no. cs-919r, harry tracy water treatment plant long term improvements project, construction management services staff augmentation, with hdr engineering, inc, for an amount

not to exceed $16,000,000 with a term of up to 60 months, pursuant to san francisco charter section 9.118. supervisor chu: thank you. >> good morning. i am the project manager with the puc. the agreement before you today was provide services to the puc in managing the cost of bay area water treatment plant, long-term improvement project. this improvement project is part of the water system improvement program being undertaken by the puc. with your indulgence, i would like to give a brief background on the harry tracy treatment plant. this is a schematic of the water system for the puc. harry tracy is over here.

actually, a major component of the system. it provides supplementary and emergency water supply to san francisco, including the city and san mateo county. the harry tracy plant -- this is an aerial view of the treatment plants. this is north, this is 280, the airport is to the west. san bruno is over here. the plant was built in 1972 and was expanded in 1988 and 1992. major improvements are currently planned to ensure that we maintain the service of our customers. this includes having driven capacity of 140 million gallons a day and having the ability to meet service demands in case of an unplanned emergency, such as an earthquake, or one other key facilities in the systems are shut down.

as shown here -- i will not bore you with the details -- we will be doing a lot of improvement on almost all the components of the facility. the key point i want to highlight, the challenge of the project, we need to keep the plant operational while doing construction. the bids for the construction were received in december of last year. the construction is planned to start in april. we expect it to last four years. i am happy to answer any further questions you have. supervisor chu: just a quick question. it sounds like this is a project that has long been in the works. in particular, a product that has had a significant increase of costs from the original budget. could you explain that? i know that had a lot to do with the natural environment we found ourselves and with that harry

tracy water treatment plant. >> back in 2009, as a result of an investigation, we discovered an offshoot from the san andreas fault. it runs summer through here and here. san andreas is about 1 mile to the west. the plant would be quite susceptible to damage, should aim earthquake occurred. as such, we looked at the integrity of the various facilities and discover that these two reservoirs' -- this one here and this one -- may not withstand a major earthquake. so we would do a new reservoir here and do further seismic improvements to the various facilities. the costs are actually increased by almost double as a result of

that. supervisor chu: from that point in time, given where we are today with the current bid climate, it looks let it will be lower by another $700 million, the cost? >> yes, that was the engineer's estimate. fortunately, because of the business climate, we got a bid for about $175 million. supervisor chu: thank you. why don't we go to the budget analyst report on the issue. >> on page 4 of the report we have on 0 table 2, hdr engineering showed the highest score under the request for reposal. they scored 84.65 out of a total of 100. we do recommend that you approve this resolution. supervisor chu: thank you. is there anyone from the public

that would like to comment on this item? item five? >> tracy water day after day fix it today we will build a water world around you fill it up in a day fix the water today we will build a water world around you do not say no hold this item of tracy water system closed never ever let tracy water improve and go supervisor chu: thank you. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed.