plan is approximately -- our 10-year capital plan is approximately $2.17 billion. we are not right nowwe are not f these potential developments against that need. if we are to move forward with the america's cup development agreement, this would be a critical way of finding sources of funds to offset that 2.1 $7 billion. and that is it. supervisor chu: taking a look at your five-year outlook, it looks like the expenditure is outpacing revenue growth we are seeing. in the previous slide you showed the projected for revenue growth, going from $68.9 million to $78.4 million.

the growth is not tremendously large. do you think that there are any opportunities to be more aggressive on how we negotiate leases, for example? to generate more real-estate money? or do we have more locked in contracts? what is driving this? >> in terms of revenue growth for maritime, it is estimated at $2 million, a significant amount of growth in five years. we continue to make assumptions to promote the cruise terminal, cruise business, and ship repair that goes with it. the bulk of it is related to the cruise industry, including harbour businesses. on the maritime side, excuse me, on the commercial side, we have a little bit of everything. about one dozen long-term leases that are 66 year leases that are

probably halfway through their terms well. the percentage of rent can fluctuate. we also have long-term leases at the ballpark and a couple of other development projects. we have been successful in the last couple of years growing revenue by taking a hard look at off street parking to the meter program. what has allowed the port to maintain its budget over the last year and into the current year has been renegotiation of those parking lot leases. however, as you know, some aspects of the america's cup will cause those parking aspects to go away. some of that growth in commercial real estate from today to the five-year is a net reduction in parking that is all set -- to your point, we worked

hard the last time to be issued bonds early to try to invest in areas that we do not feel our meeting revenue potential, one of which was pure 27 and the other is the back lands. we still think that those have a great potential. but we pushed those out just a little bit farther when we worked on the america's cup. for myself, i think we are being conservative with respect to the benefits that we expect to see. i would hope that we see a lot more in terms of revenue or offsets to the capital plan needs. supervisor chu: let's go to the budget analyst report if there are no questions. supervisor chiu: actually, i have a couple of questions. as far as your budgeting improvements, $14 million for the coming year? if you have 2.1 $6 billion in

capital expenditures, are you hoping to -- i was wondering, how do you think about reconciling that. >> it is a challenging question and you are correct, the 10 year capital plan assumes a certain amount of need to bring the facilities up to code, frankly, to modernize the facilities. as you know, each time we developed a peer or pier area, we spend money to beautify it or make more public benefits. the operating money that we are able to get each year really goes to tenant repairs, to keep a tenant. fix a b e window, for example. we tend to be able to fix a couple of rooms per year. to put this in perspective, one

shed roof is about $3 million. to that end, in the time i have been at the port, we have been very lucky with that the generosity of the san francisco voters, allowing us to build with bond proceeds. we also have the ability to issue or receive district receipts if a project moves forward to meet that criteria. as you know, we have been working very hard to come up with financing mechanisms. right now in a 2.1 $7 million number, we do not have all set for those costs. as we move through the process with our new developer, we hope that future iteration can be offset by development expenditures.

>> how many of your peers are sitting fellow? >> there are 39 piers and 80 structures. the one that is completely shattered is pure 36. there are many others in operation, but they are weight restricted, so by definition they are not generating revenue at capacity. we have had to offset that with revenue growth in other places. as you know, we have nine sea wall lots. it is our hope that several of them can be developed to that level and multiplied the amount of revenue that can generate per square foot. 4 per acre is probably a better way to think about it.

there are a number of shattered buildings at pier 70. 98, down in the hunters point area, is condemned. supervisor chiu: are there other revenue plans? or is it a matter of not having the capital improvement ability to bring them up to a place where we can use them? >> the most creative plan that we have to date was to negotiate with the export voluploratarium.. preparthat is why the pier 27 ce ship project is so critical to the port. we hope to keep your 35 open and we make an investment every day, but what we have done with priorities is tried to look at where they have the highest and

best use. pier 9 is the best example of having maritime and commercial tenants. we would like to replicate that. we have a plan to do that at pier 19 or 23. we have bond proceeds we have borrowed to do planning for that. to enter your question a different way, we tend to think that there are eight years in the plan that we will not be able to rescue, instead we are trying to maximize investments in the ones that we can bring up revenue on as quickly as possible. supervisor chiu: for those that you can not? they are simply fellow? >> unique things do come up. you're 26 and 28 are both in and as you know, they are potential candidates for development and we are still hopeful that that could happen. in your district, pier 33 is one

that we look that nell. it is functioning and actually quite full. of long-term horizon, it is difficult to see where it could go. in the time that i have been port director, out of the blue new ideas will show up. right now we have no plans. supervisor chiu: i do your love creative ideas from constituents to use them for other types of recreational facilities. what sometimes where you see a place that would be perfect for public assembly, the amount of investment which would have to put in is fairly daunting. it is one of the problems we're having with your 32. frankly, it has changed the economics. supervisor chiu: 150 question,

something i am asking of large apartments, how much of your department is i.t. related? i continue to hear that there are software systems that you are maintaining to keep track of your assets and i think we could probably manage them citywide. can you talk about that situation? >> about $4 million of our $66 million operating budget is i.t.. i think that what you are referring to, a couple of years ago there was a management report done by the comptroller's office, showing that we needed to have a better inventory system. we are in the process of buying one that we think will serve as our needs better. we are also looking to the

question that you raised earlier, to try to migrate our systems on to something that will allow us to manage property on a year by year basis. so, those are some of the ideas that we have, going forward. we have a fairly robust system for property management that i do not think his views anywhere else in the city. i do not think anyone else has a similar need. and we have a lot of the same engineering system as other departments. supervisor chiu: of their details that i could take a look at? >> we could create details. i do not know that there is a synthesized report on hand. supervisor chiu: thank you. i would say to the mayor's budget office, we have attempted to understand whether there are things that are duplicative. it is an ongoing question i am

curious about. if that is a request that the mayor's department has made, we would be happy to get that information as well. thank you. >> certainly. supervisor chu: why don't we go to the budget analyst report pelop? >> page 16 of our report, we pointed out that our recommended reductions to the proposed budget total $530,000 in fiscal year at 11-12. the recommended reductions, an increase of 3,362,000, 4.4% in the department's 11-12 budget, those recommendations are detailed on pages 17 through 20.

as i understand it, recommendations have been encouraged and we would be glad to respond to any questions. supervisor chu: the court concludes -- concurs? -- port concurs? >> yes supervisor chu:c. supervisor chu: thank you. there are a number of attrition savings that the department agrees upon because of late dates of hiring. i would be fine with the recommendation. so is the board. in terms of the recommendation of it being one time in nature, i would categorize it as that, as the savings are only going to accrue for not paying the salaries for one year. you're number two, will not have the savings because it will be a full-time individual by that time.

>> first of all, i do not think that we have attrition savings in the port. we do have it in the airport, quite a bit. historic way, madam chair, since we have been reviewing the budgets, attritions savings has been a constant and ongoing savings for the city. i understand your point. we could look at this either way. but certainly, historic way, the mayor's office takes a certain factor of attrition savings. historic with a budget analyst reviews that and comes up with either an agreement or recommendation on an increase, so that is why we have kept it in the ongoing account. supervisor chu: i understand that point, and you are correct, it was referring to the airport before the end of the port, but

i think that if the attrition savings we are capturing is associated with a delay of it. of time, it is not naturally occurring, it is something that we expect to be at one time savings. perhaps we can work through making sure that we are capturing savings ongoing. just another question with regards to premium pay? i see that that is a recommendation that we received from the airport and the port budget. it is predicated, currently, on a pending budget analysts report. i am wondering if you have an anticipated timeline so that the committee is aware of what the recommendations are finding. >> we anticipate that report to be issued to the board of supervisors in june. supervisor chu: i am wondering, if we take action, and help me

understand, right now the recommendation is to reduce the premium pay, but i am not sure what the findings are, so i cannot speak to that. if the savings would only result in a negotiated change, is it something that we want to bank on when we have not entered into those conversations yet? >> that is exactly why. as a matter of fact, in our draft reports we had originally included these recommendations in fiscal year 2011-2012. because of your very. , we changed that recommendation and put it in the out year in 12-13, pending a look at the recommendation. this is only an estimate, to be sure. but it will not impact any of those recommendations in the 11- 12 budget. supervisor chu: so, we will have

an opportunity to review that. ok. given that the port is in agreement with the budget analysts recommendation and there is no disagreement about that, if i could recommend that we take a budget analyst recommendation and dispense with those recommendations, that would be helpful. is there any objection to that we will do that without objection -- to that? we will do that without objection. thank you very much. if we could have the next apartment? -- apartment? -- department? >> in the executive director for the board of appeals. as you like to know, we provided border charted process for a wide range in a typical year. land use related, stemming from

determinations made by the department of building inspection and commissions zoning, administrator, and historic preservation commission. matters typically come from determinations made by the department of public health, public works, and also decisions made by the transportation authority. on average the board handles approximately 240 rattlers per year. volume has been lower in the set -- past several years by 35% because of the suppressed economy. we are starting to see a return to more normal appeals volume. we expect to hundred on file, down only 17%. the budget is only funded by two sources. the majority are surcharges levied on permit applications and renewal fees charged by the departments. on permits that have recently been appealed to the board, much

smaller percentages are paid by individuals coming to the board and seeking to file appeals. treasurys may be adjusted so that adequate revenue is covered for the board's expenses. this year we are not asking for any adjustment in those rates. analysis suggest that rates will determine sufficient revenues within the budget. revenue from surcharges is down for the third year in a row, but we are seeing a recovery in that area. the projection is that we will recover 93% of the anticipated revenue, up from 84% in fiscal year 2009. the board is proposing a budget of 929 $258,000, basically the same as the current year budget with a slight decrease.

the mandatory increases that we have had to deal with in terms of the part of technology work orders have been absorbed by overhead. largely by reassessment of the department's liability. i know that you are interested in the five-year financial outlook. for us it is time for the economy, revenue closely tied to how well the city is doing in general and what they are doing to seek new permits for businesses. in the current budget when revenue comes in under what was projected we have been able to mitigate your and shortfalls by reducing expenses. certainly we would take a similar approach to face with a same challenge in the future. i hope the two will support the board proposed budget for next year. supervisor chu: thank you very much. i know that this item does not

have a budget analyst report. on this item, the board of appeals, there is no report? >> correct. we consulted with your office on the budgets that we would do and not do. i think that the two budgets are the two today that we decided not to do. supervisor chu: thank you. for reference to members, the budget is on page 25 and 26. it generally looks like a pretty flat budget that is completely covered by filing fees and permit appeals surcharges. generally it is funded neutral. just a quick question for the comptroller's office or the budget office curia on the overhead's there used to be a charge -- office? on the overhead there used to be

a charge and this year there is a zero. >> members of the committee, we do cost allocation plans every year to determine how much each of these departments bowed to the general city. what we do is we look at prior year actual expenses. in some instances if the department has paid more than the actual costs in prior years, we reduce the current year. supervisor chu: do we expect there to be a different balance in the year after? >> there is usually some variance between the estimated cost and actual cost. supervisor wiener: thank you for the presentation. typically, four out of five have to vote.

>> correct. i think that this makes attendance more significant. we cannot hold the meeting without the four members present. supervisor wiener: even then it could have a significant impact. so, it just seems like a more sensitive thing than the other commissions. my question is, how often does the board of appeals have all five members present? in talking about over the course of years. i am not asking you for calculations the two would not have bought the top of your head. >> i do have that information in

last year's report, which i can send you a copy of. in most instances even when there are only a few members present, the board is usually able to decide appeals in will only continue matter if it looks like a missing commissioners will make a difference in the final outcome. supervisor wiener: that is a practice? >> absolutely. supervisor chu: thank you very much. for this department are no action items to necessarily take. thank you for the presentation. >> good afternoon, madam chair, supervisors. as most of you are probably aware, the mandate of the board is to permit and in force when

to ordinances' and protecting tenants from displacement due to excessive rent increases while making sure that landlords maintain fair and adequate rent. i always come before this committee to say that my goal is always to be the least of problems. i hope we will achieve that goal again this year. the budget is very similar to last year's. there is a $500,000 increase due to salary, mostly increases for the attorneys, mandatory fringe, and 24 staff or increased interpreter fees. we are getting many more multi- lingual hearings. we also have some increased i.t. expenditures. spending $50,000 of additional computers, we will be digitized and the documents. in the office luddite, but my understanding is that by converting our documents they

will be more accessible to the public and will be preserved for a long period of time. other than that we have funds in there for carpeting and painting, but i am hoping to patch and do spot painting so that we save on some of those items. in terms of funding for the brent ward, we are funding through unit c. we have no general fund monies. our fee is not set by the controller until august, when we know how much carry forward we have to offset necessary increases. i am proud to brag that our fee has remained $29 for the last three years. i believe that we have sufficient carry forward this year as well to be able to fund our budget at the same $29 level. in terms of a five-year

forecast, basically, my goal is to try to keep the expenditure is as low as possible. we are not filling a clerical position for a while so that we can achieve savings there. keeping expenditures as low as possible so that we keep the fees as low as possible as well. i am happy to answer any questions you might have. supervisor chu: this item also does not have a budget analyst report. the item is on page 49, as well as page 50, d telling what the budget is. generally it is completely covered by the brent arbitration fees and the use of fund balance. i do have a question for the department. with regards to the amount of fees charged at $29, part of your budget anticipates using about $1 million in fund balance

to balance the budget. can you tell me how healthy your fund balance is at this moment and whether there is a rationale to charter grant arbitration fees more in line with? >> of will not know the final numbers until august. as i expect, they would be extremely healthy. supervisor chu: have they typically been so high? i am just wondering, does your fund balance usually run at that level? >> actually, it is a bit of a moving target until august. i was surprised that it was this high this year. supervisor chu: do you have a reason why it was so high this year? >> i do not. it could change again.

supervisor chu: could you find that out and share that with the committee? >> our lead. supervisor chu: i think that a lot of people are going to be relieved that there is one less feed in terms of going up in price, but in terms of charging it cries for operating expenses, generally you are relying on half a million dollars' worth of fund balance to pay for operations. clearly having the balance in using it for offsetting costs is good, i am just wondering at what point do you start to think about changing that the amount so that you are collecting what it is the two are spending? >> i do not believe that that is within our control. we do not have the discretion to do that. >> madame chairwoman, we will take a look at how much fund take a look at how much fund balance is available after the