see. recently we attempted to finish medicare reporting on a deadline. so, for that it would be fine to get content. at a time when work is slower, there is no incremental cost to the city, it is only a productivity issue. 24/7 i would generally recommend smarter decisions to pay off the overtime. ultimately you pay it out at a higher rate of pay. in the longer term it is a much more financially conserve -- financially conservative approach. supervisor mirkarimi: do any of these apartments have both? >> typically there is a choice. unlike the private sector, in the public sector you can have

comp time in lieu of overtime. they can select a certain amount. supervisor mirkarimi: do you know the amount? >> at the moment i think it is -- steve, is it 40? 484 public safety. i think it is 244 non-public safety. reflecting the limits available. we have negotiated below that. the sheriff and the police of lower. -- are lower. supervisor mirkarimi: we do not have any numbers as to where those are maxed out on comp time in correlation with overtime figures? >> i am wondering whether the system would report. certainly, we can run a report on how much -- the advance at

the department level in the system, within the new system it will be. supervisor mirkarimi: it sounds like not. let's not now. -- >> not now. supervisor chu: thank you. can we go to the budget analysts report? >> madam chair, members of the committee, we reported on page 5 that we do not anticipate a significant increase in costs associated with implementing this ordinance. although one time resources would be needed to pull in the necessary changes to provide the required reports, costs would be absorbed into the budget.

the proposed ordinance to reduce overtime from 30% to 20% would create a significantly administrative burden for the mta, increasing the number of requests for chief executive officers to approve such requests. the overall dollars spent on overtime is determined mostly by transit operations and enforcement management. they believe that it is required to provide the required services. mta will continue to use overtime to ensure levels of service. they are not confident that the reduction will result, as i understand this legislation, which is not necessarily the objective, which is to control over time, as i see at.

they reported that if over time is capped at 20% rather than 30% of base salary of them over time be spread amongst a larger number of employees. additionally, if the current restrictions and required monthly reports with waiver processes are required as employees of for of the gaf, they discourage the use of overtime, necessitating managers' pay attention as we consider approval of this resolution to be a policy matter for the board of supervisors. supervisor chu: thank you. thank you also to the sponsor for suggesting that we continue the item. i think it would be useful to see what other reporting other

than my usual two. in terms of the time, we can look at it in terms of a number of different ways, giving it can in ways that help to address that issue. whether or not it addresses the issue of overtime there are appropriate uses of overtime and some of the departments have attested to using overtime as being more expensive than a straight time employee. i think that the overtime is and

supervisor chu: let's go to public comment -- i think that over time is. let's go to public comment. seeing no one, public comment is closed. supervisor chiu: i move that we continue this item for a week. obviously the goal at the end of the day is to make sure that over time that we have is used well. and bringing them from 30% to discovering more folks using over and being the most

efficient way to go at it. and given the past where we have had situations and i think they can continue to use that and that you can streamline reporting we have been -- supervisor chu: we have a motion and a second. can we do that without objection? item #seven foul please. >> item number 7. -- item number seven, please. >> item number 7. motion approving and exercising the final option set forth in

january 1, 2012, and this is an item carry forward and do not have a report with a budget analyst about this, but it is a way to contract services for two years, a carryover from if not, let's open this up for. and members of of of public wish to speak -- any members of the public wish to speak? seeing no one, public comment this close.

i had asked for the item to continue because the pop up on us in the morning the night before we pass the budget and i wanted to have a conversation with budget analysts about ways to make here with budget picture items being dealt with at this time through your extension. can we send this forward without objection? that is the case. item number eight, please. >> item #8.

ordinance authorizing the execution and delivery of certificates of participation evidencing in an aggregate principal amount of not to exceed $170,000,000 to: 1) finance the seismic upgrade of and certain improvements to the war memorial veterans building; 2) authorizing the building. supervisor chiu: today i urge support to bring these seismic upgrades to the war memorial veterans building. in short, this building needs help very badly. and he has a shoveler in he did drop with velvet in the building. there are many unique steps -- sculptures and architecture

within that building. the theater holds more performances and events annually than any similarly sized venue in the country. unfortunately it has significant seismic deficiencies. it poses significant life hazards to occupants in major earthquakes. i was told about certain chunks of the building that were very challenged in the 1999 earthquake. they are trying to make sure that no one gets hurt in that building in the future. then there is the current use of power that adds to the concerns we have. you will hear more in detail in a moment, but this would authorize the city to issue an amount not to exceed $170 million in participation to finance these improvements by the middle of 2015.

i want to thank the office of public finance, capital planning, and memorial staff for their work so far. with that, i would like to ask for the presentation. supervisor chu: thank you. i believe that we have [unintelligible] for this item. >> good morning, supervisors. not to exceed 170 in terms of financial improvements on the building. i will speak specific to the certificate of certification. this requires the city to release the assets to the trustee. and then the asset goes back to the city.

we have worked with at the department to clean up the two buildings and assets. that would be the opera house as well as the veterans building. they both exceeded the paramount of the bonds and are sufficient to act as collateral deficiency. we have lived with that assumption to capitalize interest, $168.4 million. with certificates of participation, investors require funding over the amount. under state law you are required

to fund a capitalized interest during the construction. . as you can see, the bond was felt in somewhere around 2012. we had planned to fund the project and made a few assumptions here in 2012. through competition we can save

up to $50 million. by approving this transaction we have allowed the department to spend the dollars, allowing them to use the commercial program to front costs without allowing us to sell today with the use of commercial paper that is very efficient at this time. in addition we have also added some documents. we ask you for that. we have looked conservatively at the numbers we are showing today. we have an interest rate of 5.6%. if you have any questions, i

would be happy to answer them. supervisor chu: ok, thank you. >> a good morning. it is my extreme great pleasure to be here before you to present the veterans building project, which i have been working on for over 20 years. the department of public works manager, without the capital planning program we would not be here today.

we have a presentation that we have passed around for you. certainly the president did go over the historic significance of the veterans building. it is internationally significant as the birthplace of the united nations. the city and the state landmark, currently we have data that over 300 performances for year. we have city offices on the third floor and fourth floor. currently it is vacant due to damage.

from the top of the building to the bottom basement level, there are serious deficiencies. i think that the photograph on the right side shows a portion of the fourth floor. this was one of the beautiful san francisco museum modern art galleries to 95. currently it houses the offices of the law library. closed due to damage. the project does focus on the winds -- the ways of correcting these building efficiencies. now critical to address the safety of building occupants, the portion of the project that

is funded by participation focuses on safety. upgrades on improvements and facility preservation for this building. over the last two years the board of trustees has considered and develop a program for the utilization. the board of trustees has accrued capital funds to do upgrades and improvements over and above those funded by the c l p's. an expansion over the hearts theater facility for greater attendance with a cafe of the first level, where they are producing.

the san francisco opera currently has 78 facilities throughout the city. it is going to consolidate its operations and has made a proposal that the board of trustees has accepted to develop the fourth floor of the veterans building previously occupied by the museum of modern art. the seven cisco opera investment of $20 million will include construction of two new event and rehearsal spaces. one of which will be equipped to serve as a 300 seat performance space. under the terms of their proposal as accepted by the board of trustees, the opera will use those spaces for six months of the year. the memorial department will be able to rent them out for the

balance of the fiscal year. they have also been working with the san francisco arts commission to consolidate the office of collection storage public gallery space in the veterans building. we are proposing to add an arts commission gallery on the first floor that will be freed and open to the public. we have known that these new programs as approved by the board of trustees are expected to improve our revenue generation in the veterans building by 50%. as to the project costs, they are projected to reduce the project by 1,000,20455.

the war memorial department capital fund of $6.3 million projects the arts commission capital fund for a tenant improvement in the latter half of the project by $1 million. in the san francisco opera they will be committing private funds of $15 million to $20 million. the sources of the funds, and i believe a further breakdown has been provided relevant to this report for the supervisors, it does out line the costs and how these will be used. hard costs for construction, soft costs include fees and product management. for the items to be funded over and above sea o p -- c l p's.

the war memorial board of trustees has completed its pre- design planning phase. currently we have completed achieve it -- two selections for the executive engineer and we plan to design the official design phase on august 1. we are proposing to actually close the building for construction by january 1 of 2013 for two years. we would like to open them on veterans day, 2014. during that time, from design to construction, the project is expected to create construction and non-construction jobs and it will, of course, conform with the city's local hire ordinance.

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