chu supervisor chu: hello. welcome to the regular meeting of the budget and finance subcommittee. our clear today as mr. victor young -- our klerk today is mr. victor down -- our clerk today is mr. victor young.

do we have any announcements? >> if you wish to fill out a reduced make a comment, please fell at a speaker card and submitted to myself. items discussed today will appear but on the board of supervisors vision on may 17, 2011, unless otherwise stated. supervisor chu: thank you very much. would you call item one place? >> item 1, resolution approving and authorizing execution of modification one of lease and use agreement l-10-0084 was emirates for lounge space in the international terminal, boarding area a, of san francisco international airport. >> good morning, members of the committee. the airport is seeking your approval for release modification to its existing lease with emirates in order to

add an additional 9502 square feet for the airline to construct a post-security lounge for the passengers in the international terminal. the current lease with the air force for 1696 square feet of boat ticket counters and administrative offices and has an annual rent of approximately $250,000. this lease began in 2008 when the airline started service at sfo. emirates was among the first wave of airlines to sign onto a new lease and use agreement with the city. they were part of a group of airlines approved by the board of supervisors in may 2010. when they signed onto the new lease and use agreement, they essentially extended their existing term of their least for an additional 10 years through 2021. the airline would now like to add approximately 9500 square feet of club space to their existing lease.

this would have a new annual rent of approximately $1.8 million and represents a $1.5 million increase in rent to the airport. under the proposed lease modification, all construction costs associated with building the new club space will be the responsibility of emirates. the budget analyst has approved the lease modification, and i will be happy to answer any questions you may have. supervisor chu: thank you. why don't we go to the budget analyst report? >> as indicated, this increase in space would result in an additional $1,538,374 in rental revenue from emirates, payable to the airport. as you know, because of the airport's break-even policy, there would be no fiscal impact. we recommend you approve the resolution. supervisor chu: thank you very much. if there are no questions, why

don't we open this item up to public comment? are there members of the public who wish to speak on item 1? seeing none, public comment is closed. supervisor mirkarimi: motion to approve with recommendation. supervisor chu: we have a motion to send the item out with recommendation, and we can approve that without objection. thank you. item two. >> item two, resolution authorizing the director republic works to execute an amendment to the constructive services management agreement for the laguna honda hospital replacement program, changing the amount from $15,303,429 to $16,196,764. supervisor chu: thank you. i believe we have a representative from dpw. >> good morning. program manager for the laguna honda hospital replacement

program. you have a resolution requesting approval for the modification of the services agreement. our last modification provided for services through the anticipated completion of the new buildings at laguna honda. these were substantially completed during 2010 and approved for occupancy by the office of statewide health, planning, and development in november 2010. the facility is now occupied since december. this modification now provides for services for the next phase of work, completion of the remodel of the wing of the existing facility. that remodel, which includes provision of seismic upgrades as well as electrical and mechanical and other improvements. this is anticipated -- this phase of the work is anticipated to be complete in 2012, whereupon the program will then undertake final site of fruit -- improvements and abatement and demolition of wings. i'm happy to answer any questions you may have. supervisor chu: thank you. mr. rose.

>> as we point out on page four of our report under fiscal impacts, this modification of $893,000 would increase the not to exceed amount of this existing contract from $15.3 million to $16.2 million, about a 5.8% increase. i would point out that the existing agreement was previously awarded based on a competitive rfp process. although the original award of the contract was $601,000 and now the new not to exceed amount, if you approve this, it hundred $93,000 modification, would result in a total not to exceed amount of approximately $16.2 million. mr. thomas notes that the significant increases occur because the agreement was negotiated in stages. where the agreement was modified annually based on the work plan for the particular year

involved, but we recommend that you approve this resolution. supervisor chu: thank you very much. supervisor kim: i just have two questions for dpw. actually, my question is just in reference to our budget and legislative analyst's report. just wanted to hear from dpw in terms of the rationale for increasing -- negotiating the increase rather than doing a competitive rfp process. >> as was mentioned, the intent was to have a consistent and continuous presence of particular positions, specifically, the firm has provided us with cost estimation with schedulers as well as with engineering support and inspection support. specifically, we have provided inspectors of record, which,

when the state approves an inspector of record to be assigned to a program inspector, they have continuous inspection for the life of that program. the lion's share of this contract has been for supplying additional inspectors of record for the program. there have been three specific inspectors provided for this job. supervisor kim: thank you. also, the source of funding for this additional increase -- was that budgeted within a $584 million in the table two, sources of funding for the replacement program? >> yes. supervisor kim: there was a budgeted amount that was not put into concrete -- in the contract in case of an increase? >> correct. there was an overall expectation of professional services within our budget that was to be distributed amongst master architect, city support staff as well as consultants supporting cm services.

supervisor chu: thank you. we have no further questions from the committee, why don't we go to public comment? are there members of the public that wish to speak on this item? seeing none, public comment is closed. do we have a motion to send this item out with recommendation? ok, we do have that motion and a second, so we can do that without objection. item three please. >> item 3, resolution declaring the intent of the city and county of san francisco to reimburse certain expenditures from proceeds of future bonded indebtedness, authorizing the director of the mayor's office of housing to submit an application and related documents to california debt limit allocation committee to permit issuance of residential mortgage revenue bonds in an aggregate it's about not to exceed $8,100,000 for pell street apartments. supervisor chu: thank you very much. the sponsor would like to say a

few words. supervisor mirkarimi: this resolution authorizes the mayor's office of housing to apply for the california debt limit allocation. the target population of the project on fell street is for families at 50% and 60% of the area median income. it is currently home to 207 low- income residents with an average tenure of 11 years. the building population includes 28 children and 62 seniors. average occupancy is 99%. the target population will not change as a result of the project, and current residents will remain in their units during and after the rehabilitation process. the rehabilitation will be green, including the installation of portable tape and/or solar thermic systems,

replacing the elements with more environmentally conscious alternative materials. supervisor chu: thank you. >> good morning, the mayor's office of housing. we request your authorization to apply to the california debt limit allocation committee. these are bonds that will be repaid from revenue from the project itself, and the city is not responsible for repayment of these bonds. it is true conduit financing. the -- we will be back, should we get an allocation in july, for the fourth authorization tax. supervisor chu: thank you very much. for this item, there is no budget analyst report because there is not a general fund impact on this piece of legislation. if we do not have further comments, why don't we open this item up for public comment? are there any members of the public who wish to speak on item 3? seeing none, public comment is

closed. supervisor kim: motion to move forward with positive recommendation. supervisor chu: we have a motion to send the item forward with recommendations, and we can do that without objection. thank you very much. can we call items four, five, and six, please? >> item four, resolution approving the fiscal year 2011- 2012 emergency shelter grants program and authorizing the mayor on behalf of the city and county of sentences go to apply for, accept, and expand the city's fiscal year 2011-2012 emergency shelter grants program in thailand from the u.s. department of housing and urban development in the amount of $1,253,445 and to expand reprogram funds in the amount of $124,000. item five, resolution approving fiscal year 2011-2012 community development block grant program, authorizing the mayor on behalf of the city and county of san francisco to apply for, accept, and expend the city's fiscal

year 2011-2012 community development block grant program in thailand from the department of housing and urban development in the amount of $18,583,517 and to expand program income and reprogram funds in the about $1,966,471. item six, resolution approving the fiscal year 2011-2012 home investment partnership program and authorizing the mayor on behalf of the city and county of said it is good to apply for, accept, and expand the city's fiscal year 2011-2012 whole program entitlement from the u.s. arm of housing and urban development in the amount of $7,576,727 and to expand program income in the amount of $430,000. supervisor chu: thank you. we have two representatives on this item. >> good morning, supervisors. director of community development for the mayor's office of housing. we have in front of you three resolutions. we come to you on an annual basis to ask for the approval

for the acceptance and expenditure of our community development block grant funds, emergency shelter funds, and home funds. you see in the attachment to your materials the list of community-based organizations for which these funds are intended. as you recall, our office, along with the office of economic and workforce development, met with you earlier this year to present what was then a draft allocation reflecting a much more significant cut that was actually received at that point. the house had proposed a 62.5% cut. we tentatively went forward with the 30% cut allocation. when congress finally revised their budget, the final cut was 16.54% for the community development block grant program. the emergency shelter grant program actually received approximately a 35% increase, so we were able to offset some of

the decreases in cdbg by moving some of our grantees that would be eligible to receive esg funds over into that pot. this is the culmination of a long process, starting off in december when community-based organizations submitted proposals for the competitive review process. those proposals were reviewed by the departments. the initial recommendations were issued in march after review by our committee on community development. as you recall, that committee has been restructured to reflect up with its by both the mayor and the board of supervisors. the committee first submitted the set of recommendations at a 30% level. when we learned that congress was probably going to not significantly decrease allocations, we presented the committee with a 20% allocation

by moving some of the organizations that we have cut back into the portfolio and decreasing some of the reductions we have previously made. as i think i indicated to your offices earlier, we were asked by the committee to not make simple across-the-board reductions but instead to make strategic reductions and increases that reflected our ability to best serve the neediest of the population. i think that when you look at what we chose to decrease and what we chose to replace, we did try to preserve those services for homeless residents, for victims of domestic violence. we also chose to focus our services in areas that would avoid duplication with other departments. we have been an active participant in the ongoing cbo task force that has been bringing together representatives of networks of

cbo's in an attempt to best align our priorities with those of the of the department's. you can see that we have been focusing in the areas of -- in terms of work force, economic development, housing development, financial literacy, transitional age youth services, homeless services, domestic violence services, and general community centers. we feel that this portfolio, while it was a difficult decision to eliminate some organizations, and i think i presented you with the spreadsheet that shows we did have to make some very difficult decisions -- this was the first year in which we had to propose the defunding of organizations that were high performers. we have never had to do that in the past, but this year, with that cut, we did have to make those tough decisions. in terms of fiscal year 2012 funding, to give you a preview of what it looks