is 262 more in expenses then proposed revenue. this is a small difference and is proposed to be funded by the port's fund balance. notably, we are selling in net operating reserve. we may be able to shrink that sell our revenues are again larger than our operating expenses. following the commission's action on the february 22 notice that this is an informational items only, the budget goes to the mayor, which will then be submitted to the board of supervisors the first of may for final consideration about or on july 31. you are seeing a proposed budget that is going to be subject to change. i should let you know that this budget does not include the cost of data consolidation, which is a citywide i.t. project because

those costs have not been developed. it also does not include proposed costs for the america's cup. it will be budgeted separately. i'm joined today now learn from their time and the other deputies to answer your questions. also, meghan of the mayor's budget office is here as well. we are here to answer any questions. >> is there any public comment on the budget? any questions? >> question. while admitting that i probably could have looked at this myself, but last year i believe is the first year we did a terribly well-year budget. i'm curious how 2011/2012 now compares to what you thought what happened last year. >> that is a very good question.

i'm going to have andres go over more detail, but some things have changed. we have french rate increases higher than expected. we also are adding new debts to the terminal, and we cut our project more than anticipated and also a reduction in his work orders back were one-time users or to reflect the actual spend rates, so i will have andres , and give more detail. >> good afternoon. i think elaine touched on most of the things. primarily, the drivers have been a fringe benefit costs, which have been going up significantly, and also some additional costs. as we have been rolling in some new infrastructure and updating the infrastructure for a wide, there is some additional ongoing maintenance cost in there, and

this year, we have actually included some additional changes in infrastructure because as we were going through the year, we will found that we had some issues and we need to upgrade them, so those costs were not included. we have held the costs on some of the work orders. we are going to be more aggressive on holding the line with some work order costs and trying to get the more true to actual expense. doing a quick look this afternoon, those were the major drivers between the fiscal year 2011/2012 that we presented last year and what we are presenting today. >> do you think it was a useful exercise to have done it last year? >> honestly, i think it is a useful exercise in knowing where we are headed. it was useful for me to see that the second year of this biennial budget was going to present more problems for us.

it helped to really hone in on the strategy to balance the budget year. it is always good to know where you are headed, but it will always also be subject to change. >> since we are once again in the debt market a year ago and hope to be for the cruise ship terminal, it is very important for our investors and creditors to see where we are going. i personally found it alarming. >> thank you. i was in the meeting this morning with the mayor's office going or the budget deficit, and someone from the enterprise agencies asked the question -- why does an enterprise agency have to cut when it does not affect the general fund at all? i cannot remember the exact response, but the person that ask the question said that as

every year and that was the best response they had ever heard. i know that we have to do our part to help the city, so the fact that we are doing more with other city departments to help ease the general fund -- i really appreciate, you for all your hard work. >> to be clear, one of those initiatives last year was project management of the cruise ship terminal, which will continue, so we still look for those opportunities, but as we cut our capital budget, they get cut as well. >> informational presentation of the port's proposed $21.7 million capital project budget funding for fiscal years 2011/2012 and 2012/2013. >> thank you. the capital budget to the -- that the port is proposing

totals $21.66 million. $13.1 million for capital projects in fiscal year 2011/2012, and $8.55 million for capital projects in fiscal year 2012/2013. the capital budget is largely a repair and replacement budget and does not begin to address our needs, as you are well aware. we certainly could use much more, and the proposed budget allocation -- allocates our limited resources in the most efficient way possible. to ensure the sufficient resource allocation over the past several months, the capital working group has reviewed and support our project. all the project request from the division, using a new scoring criteria developed specifically for the capital plan, and you will be hearing more about this at your next meeting. overall, the criteria is intended to direct funding to project that address a safe the

health code or regulatory issue, significantly reduce the liability to the port, promote commerce, navigation, and fisheries, promote natural and cultural resources, and leverage other sources of funds. for the first time, the two-year proposed capital budget is aligned cap -- exactly with the 10-year capital plan, and the budget before you outlines the capital projects that scored the highest. staff treated the approved 2011/12 budget as a baseline. the details of the differences from the budget approved in march last year and a proposal before you today is detailed in bit one of your report. the reasons we needed to make the changes were two primarily. the funding needed specifically for the dry dock removal for the emergency capital projects fund, which fell below the $500,000

threshold, which is too low, given the level of our emergence, and also $500,000 to fund a portion of the master plan for dredging of the central basin. the other reason we had to change the budget from what was approved is last year, the court staff assumed $12.5 million in available funding, and that is $2.7 million less than we have. in light of these changes, port developed a deappropriation solution. in most cases, reductions reflect project timing, so funds will be restored in by the year 2012/2013. for its staff is also proposing to fully or partially defund 6 capital project because the project are complete. the sources for the fiscal year

2011/2012 capital budget include $9.8 million in available funding with the appropriation proposal of $2.2 billion and two years of payment for the transbay cable. for fiscal year 2013, we have a much smaller capital budget, and that just reflects what we estimate will be our available funding. the proposed projects are as follows -- the court -- the port's maintenance dredging program for today will years. to be completed by the army corps of engineers. a clean-up of the historic building located at pier 70. replacement of the textures at pier 94, 96. the proposed capital budget also includes funding for an initial

phases of an inch it -- and for stricter plan for peer 70. also included, this goes on the dry dock. to install a new, force still remain, open space and alternative energy projects that meet the guidelines outlined in the agreement. greening and beautification projects at the southern waterfront. renovation of an existing building to house the fisherman's wharf harbour office and funding for capital improvements that we need to make for leasing reserves. there's also many repairs and replacement needs included in this budget, from our emergency fund to our peers structures to store pumps, floats, and vendors to upgrade the upgrading of our elevator systems. if i could move to the slide.

one thing that we have been very aware of is that the allocation of resources across the waterfront and the distribution of our proposed expenditures over two years in fisherman's wharf and the ne waterfront is about 33.6%. i would note that that includes dredging. very building in south area at 3%. southern waterfront at 20.9%. again, we will return to you for approval on february 22, and this will be submitted to the mayor's office as well as the city's capital planning committee. i'm joined here today with lawrence brown from finance, who prepared this budget and report, and together, we can answer your questions. thank you. >> thank you. any public comments on the capital plan? commissioners, any questions or comments?

well, you did a great job. no questions. thank you. item 10a, request approval of the executive director's nomination of gary hoy, sagiv weiss-ishai, hanson tom, joy navarrete, and brad wilson to the port building code review board. >> the building code requires the building code board to hear public appeals related to interpretations made by the chief harbor engineer. sectiona 105 of the code defines the process and selection and appointment of the review board members. five members are required on the board. the members must be recommended by the ford executive director, and the recommended individuals must be approved and appointed

by the port commission. the requirements for membership are split into two categories -- technical and non-technical. technical members are required to be certified building officials or registered as structural, architectural utility or fire protection engineers. non-technical members are required to have either technical skills or work experience related to construction. both technical and non-technical members must be employed by the city and county of san francisco. three members, including a minimum of two technical members, are required to form a quorum and an affirmative vote by three or more members is necessary for the review board to take an action. the maximum term of four board members is three years. section 105a limits the base of appeals heard by the review board to granting or denying of any permanent or revoking or refusing to revoke any permit

under the current condition of the san francisco could. any order of the engineer involving construction messes assemblies or materials or where safety is involved, and any order or abatement resulting from the chief harbor engineer hearing and any notice of violation order issued pursuant to section 102a of the port building code. a review board is not responsible to hear appeals related to the enforcement of design or accessibility. the term limits of the current building code review board have expired. during that review board's term, only one appeal was filed. that case had no action taken, due to the lack of three or more affirmative votes on the matter. for a new term starting today, the executive director has nominated four of the sick -- existing board members for reappointment. one individual for appointment

to the following position -- the recommendations for the technical board members are gary hoy, california registered architect employed by the department of public works, sagiv weiss-ishai, california engineer, employed by the five apartment, and hanson tom, employed by the department of building inspection. the non-technical board member recommendations are joy navarrete, environmental planner employed by the planning department, and bradley wilson, a california-registered engineer employed by the san francisco public utilities commission. the new nominee is sagiv weiss- ishai, who graduated from university of maryland in 2002 and worked in private industry until october 2007 when he filled his current position as a fire protection engineer with the san francisco fire

department. in conclusion, at this time, engineering staff requests the port commission to approve and 25 individuals nominated by the port executive director to serve as review board members for maximum term of three years. i'm open to any questions. >> thank you. is there any public comment on this item? commissioners? all in favor? resolution 11-06 has been approved. >> item 11a, requests approval of lease l-14887 with sitting by, doing business as hi dive for an eight-year restaurant is for premises located at pier 28 and a half. >> i'm here to ask your approval of the item read by the commission secretary. in 2002, following the termination of the boondocks,

run by j. kennedy, the port thought a new restaurant operator through the competitive bidding process. the process concluded in 2003, with sitting by as the highest qualified bidder. this lease was approved by the port commission august 12, 2003. the initial lease provided a term of 9.5 years, with an initial rate based on the greater amount of either the minimum rent, which at the time was $3,389, or 6.5% of gross sales, so the greater amount of the percentage rate was raised to 7%, as was negotiated on the second anniversary date. the initial investment that hi dive put into the premises was about $289,000, and it was

completed in 2003. fast forward to 2009, hi dive undertook an outdoor seating area, outdoor patio to increase their terms or they're seeking in the restaurant, and the area is about 522 square feet, located on the north side of the restaurant. for the premises currently, it is under a separate license, and rent is paid on a percentage basis. the cost of the construction was $138,000. this value triggers in the court building code. the 100% requirement for upgrades, and therefore, high -- hi dive undertook these upgrades, which were prioritized by our building inspection. the reconstructed the bathroom.

there was just -- there was an ada bathroom. there was a unisex. they needed to resurface and create a barrier-free path of travel from entry into the restaurant to the outdoor seating area. in addition, they had to receive a permit from the bay conservation development commission for the outdoor seating to allow this, so they installed public seating and trash receptacles. this portion of the upgrade was $154,000, bringing the total investment to $289,000, so this was their second large investment. hi dive, prior to the completion of the improvements, requested a second -- a term extension to

help amortized these costs. the tool that we have to do this would be under the 1993 retail leasing policy. that would offer a sole source leasing opportunity. we determined that in fact, they do qualify under the policy. they are a tenant in good standing. their lease term expires august 31, 2012. therefore, they do not have enough time left on their lease to amortize the cost. in exchange for the second investment and upon your approval, for its staff is requesting a sole source business opportunity. it will extend the term of the lease for 6.5 years. it will give them 6.5 more years of terms to amortize. aside from the retroactive

construction time of three months that we are offering, there are no other concessions, and there are substantial reasons why we should continue this lease. they are a proven tenant. they are in the top tier of rent-producing restaurants. if you look at our portfolio per square foot, which is really the indicator you want to look at their, they are in one of the top tiers of that. and they are a very cooperative, excellent tenant. other lease terms, the premises expand to 2459 square feet, which is the addition of the outdoor seating area, silver and is based on that. minimum rent will go up to $5,931, which represents a 50% increase to the base rent. there is a 2% annual adjustment.

gross sales are at 7%. i think that is it. i'm happy to answer any questions. >> thank you. >> ok. >> is there any public comment on this item? all in favor? resolution 11-07 has been approved. item 12, new business. is there any public comment on new business? item 13, public comment. is there any public comment on public comment? congratulations. you have just been appointed to the committee. you are not supposed to say. [laughter]

>> hello. i'm here wearing a different tack than i usually do. i am a member of the board of directors at the mission creek conservancy, which is a corporation that has been working to fix up mission creek. native planting, while we worked very diligently to persuade the mission bay developer that they really needed to look at the creek as more than just a sewer when they were building mission bay, and i think, from what we see now, and what our neighbors around mission creek tell us, it was a successful project because we have a lot of really beautiful planting around the creek. got some really nice parks. we are building more. and i'm here actually to announced publication of the

second addition of -- that mission creep conservancy original -- originally had written by nancy olmstead in 1986. because we thought there was a reason to let people know what the real history of mission bay was. it was a 300-acre bay that has been filled in over the years, and we ask nancy if she could update it for us, and unfortunately, her health did not allow it, so we persuaded a historian in the city to do the updates for us. we have expanded the history section are rounded of occupation of mission bay. we have x -- including expansion of the natural history section, and i'm here to give a copy of this new book to the board of

san francisco -- the port of sanford cisco and let you know we will be having several book events coming up soon, and we hope you can come. thank you. >> thank you. is there any other public comment? no other public comments, can i have a motion to adjourn? >> so move. second. >> all in favor? meeting adjourned at 4:10 p.m. >> wow.

>> welcome to "culture wire." today we are visiting southern exposure in san francisco alison prepares to launch a fantastic new project called beautiful possibilities. we will send them on a two-year adventure crisscrossing the united states to investigate american history and contemporary culture. it is using a traveling road show as inspiration. she will sit down and talk with residents in search of stories

and experiences that reveals exactly what makes us americans. >> beautiful possibility is a traveling research project that i will take on a five-month journey across the united states and lower canada. i document this tore on a map that i painted for the project and also from previous projects called the road map to lost america. on the map i have taken all of the contemporary borders off the map and replaced them with native territories, and then overlaid it with contemporary highways. i have scheduled venue stops at different areas along the tour, from california to south dakota, that will serve as headquarters for my local research. when i was researching the traveling medicine show, i came across this. they had put out an elixir, and

it referred to the elements that came out because of the high stress, high-pressure life, mostly because of the industrial revolution. anyway, i was fascinated by the term american-itis, and i thought it did a lot about the stress-related illnesses, and i was impressed that they picked up on that and the 1800's. i did a survey to see if it was irrelevant element today. i have a series of eight painted banners that are retellings of american history. i am particularly interested in transition history between native and european histories and retelling them as if they were a popular myth. there is a mix of eras and characters and times drat these banners. -- and times throughout these

banners. i use the olympics and the melting pot, or things reduced down, and come out of this reduction. and something else transforms out of it. they had this strict code of who we should be as americans, and then i had andrew jackson fanning the flames. this first contact, down to george bush in 2008. all of the characters that appear are real characters that are taken from my research. we are an interesting mix and i want to provoke wonder about who we are. every one of the characters are taken from actual photographs or documents that i found in my research on american history. in a lot of my banners, you conceal -- uc the melting pot, the imagery and myth that we use in our cul