i would like to thank you for hearing our presentation. if you have anysupervisor chu: . mr. rose? >> madam chair, members of the committee, on page six of our report, we point out the office of public finance reports, using conservative estimates, the total cost of issuing the proposed to tickets of participation would be $316,280,000. that includes the project cost and related expenses, and included the interest cost estimated at $148,165,000.

annual interest rate of 5.63% on the cop's. average cost to the city general fund would be about $12,165,00 for a period of 12 years. the cost of financing the $132 million in improvements to the veterans building through the use of general obligation bonds would be an estimated $228,520,000. that is a $7 million less than the cost of funding and the improvements using the proposed cop's. furthermore because general obligation bonds are financed through property taxes, financing would have effectively have no impact on the city's

general fund, whereas the proposed cop's do not include a new source of revenue and require general fund expenditures of approximately $12 million per year. however, having said that, it is reported to us that under g.o. bonds, voter approval would be required. city officials that we dealt with, including the capital improvement advisory committee, stated needed improvement to the war memorial building but not be advised at this time. at these improvements are needed almost immediately. we consider approval of the proposed ordinance. therefore, it would be a policy for the board of supervisors. supervisor chu: just a couple of

questions, perhaps to nadia. with respect to the cop's being exposed, you break out the necessity for commercial paper, being able to take out what we anticipate from the commercial paper program. there is another line item for interest. could you explain the difference between the commercial paper program and interest related to that? what is that intended to carry us through? >> the numbers show that we used commercial paper, once the board approves this through 2012. as a result, we would use up to $15 million or more to fund the project. in that case, because we are drawing down on commercial paper, it is the accrued interest on that commercial paper that is included in the

$1.1 million, which represents accrued interest. supervisor chu: so commercial paper will be used during the planning phase? you can use that fund for planning, construction work? >> all of that. we are showing up to $23.9 million. the accrued interest associated with that would be $1 million. the way the program works is we would roll over the interest, and part of the takeout, it would be included in the payment stream to accrued interest on the commercial paper. supervisor chu: the difference between g.o.bonds and cop's. g.o. bonds tend to be at a lower rate? >> that is correct. there is a tax increase that is

the pledge. it is a higher rating than cop's. we estimate it at about 55 basis points spread between the two, but again, those are assumptions we are making. it depends on market conditions, supply in the market at the time that we enter. it could be lower. for the purposes of this analysis, it is a 55-point basis spread. supervisor chu: in terms of whether the board would approve this item, we would not be approving a tax -- property-tax rates. this would require the city to use existing funds to pay for the debt service? >> that is correct, but it allows us to delay that issuance as long as possible, because of the commercial paper program. even with a g.o. bond, we would have to do it today. with cop's, you can draw down on

commercial paper to come up with the funds. because we have used conservative assumptions, if we decide to use commercial paper through the completion of the project, the dollar amount comes even lower. you do not need the capital interest fund, and saving between a deal bond and commercial paper would be about 43 million. because you are required to have a reserve fund on the cop structure. supervisor chu: if we approve this item, we are expecting that our general fund would go up, and the amount we are paying for debt service, in the tune of $12 million. do we know what the city is paying, what percentage of our operation? >> we have the 10-year be have

allowed ourselves 3.25% of our discretionary revenues. as we pay down these revenues, we will look and only one appeared with this track fashion in peru -- including, we are within the 3.25% of discretionary revenues. supervisor chu: even if we approve this item, we would be within our 3.25% of general discretion funds? >> correct. supervisor chu: thank you. are there any members of the public that would like to comment on this item? item 8. >> madame chair, supervisors, my name is tim. 25 years have passed since the loma create your quick and we have seismically updated or demolished all of the buildings near the civic center but two. the veterans building and the

health department building. the federal building at un plaza is currently under reconstruction. the veterans building was damaged. no damages were repaired, but it was also seismically impaired. the next earthquake could cause incredible damage in the building and, particularly, damaged the theater. the engineering reports that are mentioned in your document talk about the building on a three out of 4 scale. in discussions with the engineers, reports, testimonies, the issue of whether the building should have been closed was raised. they recommended, if the city had a plan to be -- rehabilitate the building, it would be safe to leave the building open until such time it

was closed. if there was no plan, then the building should be closed and boarded up. today, we have a plan, one that is well conceived and well developed. although there is concern in the general public about the financing technique you are going to use, the alternative is to board up and close the building. that is with the engineering report basically says. if you have no plan, you should close the building. i would urge you to approve this and move on with this matter. supervisor chu: thank you. are there any members of the public that would like to comment on this item? seeing none, public comment is closed. colleagues, one final question to the war memorial. with regards to the improvements at 6.3, arts commission, opera,

are these identified funds, do we anticipate being able to raise these funds over time? >> for the war memorial, $4.3 million, inc. all ready for capital projects, which we have accrued over the past five years in anticipation of this major project. we have identified two sources for potential gift funds to augment that. weaverville confident about that additional $2 million. the san francisco opera is undertaking a fund-raising campaign for their $15 million to $20 million. we are meeting regularly with them and they do confident, at this point, about that amount. the parks commission -- arts commission has not fully developed its plan yet. supervisor chu: all of these items, in terms of improvements

-- the parts commisarts commisst identified yet, these are things that could happen after? >> yes, they would typically happen after the construction project. supervisor chu: ok. do we have a motion on the item? supervisor kim. supervisor kim: i would like to move it forward but just make a couple of comments. it was difficult for me to support just wanted to raise some of the concerns that i had but also to appreciate the presentation put together, the work done to bring this forward. clearly, this is a more expensive way of financing our seismic retrofitting. i know this may come up with the few remaining city and public buildings. i did have concerns that this did not pass several years ago with voters and they may not see this as a priority. this is an incredibly expensive

way to fund the retrofitting, but i appreciate the work that went into this, as well as staying below the 3.25% debt service. i understand this building has a lot of historic and important uses for the city that may not be recognized by the public, particularly, the use of the theater and the use by our veteran communities. i am excited there will also be a partnership with the sf opera. i think the concerns from the public are valid, but we need to move forward with this project. i wanted to thank everyone for their work on this issue. supervisor chu: thank you. we have a motion to send the item forward with recommendations. colleagues, can we take out with recommendations? thank you. item 9. >> item 9.

ordinance calling and providing for a special election to be held in the city and county of san francisco on tuesday, november 8, 2011, for the purpose of submitting to the voters a proposition to incur the following bonded debt of the city and county. to a record $48 million to finance the repaving, reconstruction of roads, rehabilitation, replacement of sidewalks, installation and renovation of curb routes, renovation of streetscapes to include pedestrian and bicycle improvements, and construction rehabilitation of traffic infrastructure, and related costs necessary that are convenient for purposes. supervisor chu: thank you. we have the department of public works. this is an item that we have seen before us. i do not believe the underlying details of this proposal has changed, but i have asked the department of public works director to provide a brief recap of what we have seen. >> ed riskin, director of the

department of public works. this item was before this committee and you recommended to the full board, which approved in june, a resolution for this bond. this was the board cost of finding that this was imminent capital need, and it was one that was in the public interest, one that could not be met through existing revenue sources. what is before you today is the board met at a place that measure on the ballot. it proposes to report it million dollars in general-obligation bonds that would do a number of things, but predominantly, the lion's share of funding, $148 million, would go to paving our streets. that level of funding would allow for 1400 blocks to be paid in our city. the proposed bond also has $50

million in it for pedestrian and bicycle safety and other improvements to our public spaces. these are improvements were there are few other funding sources for, so this amount of funds would allow us to implement many of the things that were discussed in recent public pedestrian safety hearings, and allow us to further implement the bike plan, further streetscape improvements. the bond also has $22 million to support continued implementation of the ada transition plan. that would allow us to do 1900 curb ramps,. $20 million of the bond would go to traffic signal improvements, which is the top on funded party of the transit effectiveness program.

about $7 million for seismic and other repairs, and other safety repairs, to city structures such as tunnels, bridges, overpasses, and stairways. what this bond will also do is create jobs, or than 1000 san and siskins -- more than 1007 second1000 san franciscans woule put to work. because of the local fire ordinance, this would be a significant job generator. what this bond will not do, because it came as a recommendation from the 10-year capital plan, is that it will not result in a property tax rate increase. the capital planning committee has established in the plan policy of issuing new debt only as old debt retired so that we have as a baseline of 2006 property-tax rates.

this bond and all others recommended by the capital plan are sized as such they will incur new debt for the city only as old debt is retired. there will be no increase in property tax rates. this is before you today or recommendation to the full board to go on the ballot this november. i would be happy to answer any questions. supervisor chu: thank you. mr. rose, any comments to add to the presentation? >> madam chair, members of the committee, as you stated, the numbers are the same, the debt service is the same. we concur by the statement by mr. riskin to say that there will be no pay increases in property taxes offset by the existing debt going down. we recommend approval of this based on the prior policy decisions of the board. supervisor chu: thank you.

colleagues, if we do not have any further questions, why don't we open this up for public comment. are there any members of the public that would like to comment on this item? seeing none, public comment is closed. colleagues, if there are no questions or comments, can we make a motion to send this item forward with recommendation? ok, we have a motion to send this item forward with recommendation. without objection. colleagues, bear with me for a second to rescind a few votes so that our colleagues who joined us later could participate. if we could rescind items 1 through 5 and item 7. okay, without objection. that will be the case. on items 1 through 3, item 5, 7, a motion to move forward with

recommendations. without objection. in addition, item 4. this is an item that we made an amended to with regards to the theater agreement. i think the consensus was that we were reluctantly agreeing to or renew the retroactive contract, but wanted to urge the mta to come forward with a new methodology about the new theater program, bringing forward the fastpass program at the same time. can we send that out with recommendations? without objection, thank you. do we have any other items before us? supervisor wiener: i just wanted wiener colonthe chair. i was at a meeting with the metropolitan committee. supervisor chiu: this regularly scheduled meeting was also

changed to 10:00, so we have to double our schedules. supervisor chu: thank you. given that there are no other items before us, we are adjourned.