contribution for new maritime preservation projects, a facility selected by the port at its sole discretion. for, discourage a location of non-water dependence commercial uses/facilities, other than parks, on sites with waterfront access. five, maintain adequate water depth of current deepwater berths to accommodate current and future port maritime activities by using best efforts to prioritize funding at minimum levels of dredging in the ports capital plan. such an internal goal of the% of the port's annual operating capital expenditures, excluding bonds in grant proceeds will be expended on dredging, a friend repair, short side power and utility upgrades, fisherman's wharf and harbour improvements, pier repair, rail

infrastructure, cargo warehouse repair and deck repairs. achievement of this goal is subject to compliance of maintenance of operating reserves. current exclusive negotiating agreement as well as in the financial covenants imposed by outstanding bond obligations and grant awards. additionally, from time to time, this bolt may be re due to financial conditions that result in operations. the school will also be subject to budgetary approval by the port commission, vader, and board of supervisors -- this goal will also be subject to budgetary approval by the port commission, mayor, and the board of supervisors. seven, prioritize water- dependent uses and not allow limits to sanded rigid standard operating periods for purpose of accommodating adjacent non-

maritime uses, accept an otherwise identified in the land use plan. this preservation policy initiated the recommendation of commissioner crawley, is meant to give guide in the importance of maintaining the -- held for maritime access for current and future maritime activity in accordance with the ports and city's long-time held maritime history and the ports perpetual maritime mission. i will close my comments in reading from a book, as did peter daly when he was it here in april. it is called port city. it is from the former corte commissioner and longtime labor leader. in the book he states, "the tragedy for maritime use of the port is you can prevail over particular issues hundreds of times, but you only get to lose

once, and then what you fought for is gone forever." with that i conclude my comments. i asked you to vote to ratify the resolution in front of you, ratify the maritime preservation policy. i am open to any comments or questions you might have. >> so moved. >> second. >> you referred to it, and i am not sure what the definition is. in the memo we have the% of annual revenue to be allocated towards -- you mentioned in your presentation 50% of operating revenues, and 0.6 you just said annual operating capital. these could be interpreted as different financial conditions, so i am trying to clarify exactly 50 percent of what? >> the third. 50 percent of the annual

operating budget -- capital budget. >that is distinct from the 10- year operating plan. commissioner woo ho: that is that 50% of the 10-year operating plan? >> we are and 201112 budget. if in 2009, then the annual operating budget would be $7 million. that is how it would fit. the way that the port commission typically manages its policies is they are policies that you can grant waivers for.

for example it there was a particular reason that the court staff felt that an alternative use should be done, then we would have to seek a waiver to your own policy. then there are caveat particularly in the item you saw with respect. other policies, i e the fact that the mayor set the budget and the board of supervisors ratifies it. >> i am not to do it clear on the language that was added 2.3. - to point 3. what is the intent of that? the intent is it the port has a

priority that they would like a maritime asset they would like to develop that that not identified funding and there is an opportunity to develop another site, it could be adjacent, non-adjacent, the goal would be to encourage in the negotiation of that development agreement, the funding to help pay for the development of port maritime asset for the upgrading of the assets as part of the lease or development deal with the port. >> thank you. we do have public comment. dennis dessinger. i'm messing tha hat up. >> thank you. thank you for having me today. i need to put on my glasses here. a couple of notes i have.

i'm director of business development for san francisco should live here at pier 70. i am here to support the policy. we see the policy of strengthening the of the city of the port to serve maritime industry for commercial recreational, and also to keep the cargo flowing across the docks. keeping the infrastructure intact, available for commercial recreational distances keeps it available for jobs. we also feel it maintains an experienced work force. case in point, the shipyard right now we employ 150 to 250 skilled men and women some 10 different unions. with the ports help, we recently completed dredging the approaches to the shipyard. this has allowed us to bid on a larger package, and will allow us to have bigger ships going forward here did prior to

dredging we could get ships in, but only at high tide. even with commercially-viable bids, some of the owners would not accept the ships coming into the yard. we lost business. we have to downsize the manning , losing economic work to the area. i am actually happy to reflect today, as of an hour ago, the military sealift command awarded as a significant package. >> yay! >> they did this after all missing the dredge survey last week that we completed -- and they did this only after seeing the dredged survey last week that we completed. this will bring in a large number of subcontractors and local vendors. with that, i want to thank the port stop and commissioners for developing the sentences the waterfront into the economic engine that it is, and we see

this policy will solidified the ports success in the future. thank you. >> lee criston. >> good afternoon, commissioners. i am a member of the ports maritime commerce advisor in committee. even though i am retired now, i have been a customer of the port for over 20 years. first as an executor of the shipping line, and lately as the regional manager. it is welcoming to see the port staff has drafted a proposition for a long-term policy, for preservation of the deep water board, as well as thick the future maritime uses, which will

continue to provide many import opportunities for the residents of san francisco and the bay area. the port of san francisco has a unique position in the bay area, because it is the only port that has facilities for passenger and [inaudible] . also, we have deeper water. and we can accommodate them. it is really a form we protect those stocks for future uses. it is very important for the shipping committee to note there is a policy in place to protect those. i am also happy to say there is wording in this document. with that, i want to say that i

will ask the port commissioner to ratify the policy, which i strongly support. thank you very much. >> marina secretano. >> madam president, commissioners, i am renas a cretonne marina secretano, and o commend your hard work on this document. i want to appreciate prioritizing the maritime uses over some of our viewing quarter issues that we have experienced. i think that with creation of the tour of bicycle companies were you rent a bike here and go across the bridge and take a ferry back, we've seen a tremendous increase in the

number of passengers. i can only say that our industry is growing continually. we have about 400 people that are making a living on the series, and we understand in the spring there will be a new one coming in. the fact that the project -- the port is prioritizing maritime is a breath of fresh air. i am not trying to be critical, but we have been through different port directors, currently not our -- certainly not our current director, and we know there is a balance between the infrastructure, but i am still complaining that pier 54, which has a lot of needs and has been yellow tag and red hat, and i do not know what state is in today, but that could have been the maintenance facility for the water emergency transportation authority, which has a stream of

funding. i am not saying they're rich, but they have a stream of funding. that project has gone over, and i am not saying we couldn't stop it, but i felt like if we could keep these peeriers -- i know is balance, but i hate to see the port of standards as those in the business. i do appreciate your hard work. >> any other public comment? >> good afternoon. i am the business director for the san francisco bob pilots. we've been on the bay since 1850. we are a long-term tenant, and i want to add my support of some things to moniqe and ue and sta.

>> i want to thank the executive director and peter and jim. thank you very much. this was long overdue since the transfer in the late 1960's, but i do believe this is a proponent for strong maritime and strong economy. that is what makes this city great. i want to thank you personally for putting this together. nice work. >> any other comments? >> i would like to thank commissioner carly in particular, but all of you for supporting this important measure. it is hard to imagine that we need a policy like this, and recent article seemed to imply we desperately need a policy like this, so i think you very much for asking for an inspiring as altogether. i also want to thank the commissioner for catching something really important, and

arabic to read a change into the record if i may as a result of her igor i.. is that ok with you? >> it occurs of the very last whereas in the first page of the resolution. so i will hopefully go slowly so that you guys can cross. not your hands when you're all on that page. -- knod your heads when you're all on that page. it comes right after the signature page of the staff report, before the policy itself. paper page 3, third piece of paper. everyone on that? in the bottom the very last whereas, the whereas needs to say where as the port commission desires to create a new budgetary goals to fund capital

maritime projects -- strike the word with come in search in an amount equal to, and 50% of ports. strike net revenue and insert the word annual operating budget, which money's fund certain improvements and the enhancements to the ports maritime facilities and activities as described in the port of san francisco maritime preservation policy, attached as exhibit bay. whereas the port commission desires to create a new budgetary gold to fund capital maritime projects in an amount equal to 50% of the port's annual budget, which monies will fund certain improvements and enhancements to the ports maritime facilities and activities, as described in the maritime industry preservation policy. i think the results are enough.

>> could i suggest the annual operating capital budget. >> yes, thank you very much. you are again correct. >> i have a question on this. how much to regret to -- usually set aside for dredging? >> of the typical dredging budget is approximately $3 million, anywhere from 7 million to $14 million. the mores we have had is 14 million from if i am correct. average is about 7 million. dredging is usually a fair chunk of that. apron repairs is also a fair chunk of that. it is typically imbedded in peer repair, but this is set a different way. it does not really create a new expenditure threshold, because this is standard practice. it articulates it as a priority.

>> when we say pier structure, is that all peeriers? >> we could limit that if you prefer, but it is all peers. >> almost everyone has a priority. >> i understand it now. i think this is a much hwang- awaited policy, and i want to amend the commissioner for bringing this to us today. i would love -- of a point member for -- i love point number four, so thank you so much. great job. >> any other comments? all in favor. >> as amended. resolution 1158 has been approved. item 10 a, request approval to amend the construction

manager/general contractor contract with turner construction company to increase the contract amount for the long lead item treetop contractor bid package for structural steel by an amount not to exceed $6,050,000, which consists of a base amount of $5,500,000 and a 10% contingency amount of $550,000 for project phase 1 construction. >> good afternoon, commissioners, and executive

director. i am the port project director of the cruise project. what a great project following jim's presentation. this is a true maritime project and a good one for the fourth. in june of this year the port commission authorized stock to word the construction manager general contractor contract to turner construction company with the direction that the contract not commit the port commission to approval of the project or grant any entitlements. since that time, turner has made recommendations on construct ability, verify the phase one cost estimate and developed a detailed phase one construction schedule. i am pleased to advise the project is tracking well to the project budget of a phase one -- of phase one, which is torn -- shown in the memorandum. just to refresh your memory, we are looking at the project in two phases.

the first phase is subject to completion and certification of the final eir for the cruise project and approval of the project by the city. in that case the event authority would demolish pier 27, the entire said, which is shown in the drawing of the existing site and the north part of pier 29. the poor would relocate the short-power system the poor would construct the cruise terminal, commencing in 2012 for temporary use by the port authority, commencing early 2013.

this shows phase two, the ship. after the event, the court would build up the remaining building, which includes the customs and border protection and security rooms come install marine of equipment. and complete the improvements on the ground, which is the northeast plaza, a two-acre plaza and the crown prince -- ground transportation area. that is between pier 27 and kurt 29 area. it is an approved, we have an extremely compressed schedule to deliver it in time for the event. in order to meet the date stipulated in the host and venue agreement, the general contractor needs to place the order for steel now because of the long lead time.

this process begins shop drawings, purchase of steel fabrication and installation. the poor recognizes the city may disproves the event, cruise terminal, or both event. we acknowledge to place the order now, prior to the project approval is at some risk to the port. however, this is the best course of action because of three reasons. now is a great time to purchase the deal. prices are low and we have indications of prices will escalate. if the cruise terminal project it disapproved, the court to cancel the fabrication. 3, this lower-cost deal could be reduced. as indicated in the memorandum,

no construction worker insulation will occur at the site until after the regulatory approvals are granted, including environmental review under the california quality act and the port commission and city have approved the project. for the street package, local participation level has been set up 20% with a gold no less than 10 percent of the work hours to be performed by disadvantaged workers. local enterprise goal is 17%, but the total -- the total value of the entire contract. for funding sources, as proposed by the port staff, funding for the amended contract will be provided by culmination of the ports 2010 revenue bond proceeds for the fiscal year 2011 for capital projects in the port share proceeds from sale of the

watermark condominiums. the availability and use of the watermark condominium proceeds are subject to the release of 17,000,700 $900,635 reserve by the board of supervisors' budget and finance committee. it is anticipated the item will be heard by the board finance committee. in conclusion, for staff request for commission of an approval to the construction manager, general contractor contract, with turner construction company to provide funding for the subcontractor bid package for structural steel subject to city certification of the final eir, approval undersea sequa. >> so moved. >> second. >>commissioner woo ho: when you

mentioned under option 2, how much money would be expended? you mentioned you could cancel at so -- as some point, but how much money would have been invested? to go i do not have the table, but i think the last part would be installation, which i believe was $2.7 million. the first part of the shop drawings, which is basically engineering time of 225,000. after that the steel would be ordered and delivered to the fabricator and brought to their sight. the added labor for fabrication -- >> it would not be all this deal? then you said you could resell it if for some reason -- >> we could reuse it on other projects, but we get the most of you before it is fabricated,

certainly after it is installed we only have one use for it. take a right. thank you. -- >> right. >> it is 3.7 million we would have been advanced. i would say would be advanced for steel use somewhere else. it could be used at the back plants, pier 70, any number of places, we just would have purchased it sooner than we would have for those projects normally. on the other hand, we're trying to buy it at the low point of the price curve. and the steel could be reused? >> it is hard to say at what point we would exercise the cancel option, but the order would include purchase of raw steel and the fabrication and

delivery. if at that point but project does not go forward, then we would be meeting to employ this deal elsewhere in the portfolio. if at some point the project receives approval sooner, we could exercise our determination rights at any other point in the delivery stream. >> is there a point where it would be harder to use this field? >> it is specialized for this building, not for the site. you come put it somewhere else. it is a building that will look like the building we envision for pure 27. is that correct? >> yes. could be. >> could be, is that what you said? [laughter]

what i am getting at is we would be able to use whatever funds are expended, that still could be utilized elsewhere and not be out significant funds regardless of the point in time within which we had to terminate. >> correct. there are many materials we do inventory. we would be purchasing steel, fabricating it in a specific format and indicating it in using it in approval for other projects. the limitation would be if you build a building somewhere else, it would have to look like the building from which to fabricated the steel. does that make sense? >> i have a more mundane question. where are we purchasing the steel from? >> the lowest bidder. >> where is that currently? take a weve