contractor, estimated to be june 1, 2012. this would change the sentence from having the rent credits commencing at the completion of the project. i also want to know that dp -- note that dpw has approved the amendment with the following changes, the first on page one, the very bottom. if you look on your lease amendment, it is on the -- it is attached to the letter. at the very bottom of the first page, letter e, it says the city is interested in including certain sea wall repair work in the harbor renovation project, but the whrf funds will not be

sufficient for the performance of additional work. that was changed from loan proceeds to funds. it is just a clarification. they also added a sentence right after that said no dpw funds are available for this work. the other change they ask us to make to the least and then is on page four. it is 5i. it says first, through any harbor renovation project contingency reserve, that at the clause, "which have been funded by the city." those of the changes that have asked, consulting with the attorney, these are just clarifying changes. i should have mentioned in the current -- the beginning of my presentation that the commission operations committee had approved this lease amendment lou pending approval by dpw back

in june. it has just taken us a little while to connect. now, the operations committee recommended that the full commission approved and make a recommendation that the board of supervisors approved the lease agreement. if a recommendation for approval of the lease agreement is made by the commission -- excuse me, the lease amendment is made, supervisor mark farrell will introduce a resolution to the board of supervisors. a resolution will be met heard by the government audit and oversight committee, and if recommended for approval, the resolution will be heard by the full board of supervisors. lastly, i would like to note that organizations in support of this initiative include the st. francis yacht club, the golden gate yacht club, the marine harbor association, the marina renovation working group, and supervisor mark farrell. >> let's have public comment. well, we have commissioners that want to ask questions.

commissioner lee. commissioner lee: i just had a quick question. looking at the revenue projection, we had talked about that. were those funds dedicated for some other source prior to this or it was always the intention -- because i know we have talked about revenue-generating ideas and so forth. were those funds already dedicated to other purposes, or was it specifically dedicated to this from the beginning? >> the general strategy is to serve the department is a general fund to keep our parks and programs operating, but the revenue generated at the marina must stay at the marina, so this is a source that is available as a contingency, and it was really getting -- the purpose of going through the analysis was to make sure that the conservative we

felt comfortable with the approach. >> to make clear, these funds that were going to be generated in the marina had to stay in the marina. they were not allocated for some other source? >> correct. >> the last time i heard this was a while ago. there are a few issues that still resonate with me. i appreciate getting the letter from the department of boating and water works, stating that they approve the amendment as revised. that is great. that was a concern we had. but the one thing that just sticks for me, and i do not know that anybody can give us the assurance, is that if there are shortfalls, despite all these new sources of revenue, how can we guarantee that does not fall on the backs of the tenants? i really struggled with the possibility that these costs could somehow be passed through. >> in putting together the cash

flow analysis for the project, which, of course, we have shared with boating and waterways and then with you and the board, i have tried to make as conservative projections as i possibly can, both for revenue and for expenditures and after completion in the project. i have done what i can to be as realistic and conservative as i possibly can. in some ways, this is all a leap of faith for all of us, and it is towards a great end. we are finally going to be able to renovate at least the western portion of the harbor and have a fantastic facility that the boaters will be thrilled to have. collectively, we are, with our best judgment, closing our eyes and doing what we can to move

forward into the future. there are things obviously that are unknown, but i have done what i could to be as conservative as possible. >> i get that, and i appreciate that this is a leap for all of us, but i do not think there is a way we could definitively go back to the leaseholders in the yacht harbor. i just want to put out there that there are problems, then we come back and use that as a solution. i will not support it. it is just -- we cannot keep going back to these folks. i appreciate that they are the beneficiary of these improvements, but before i could possibly support something that i think we would have to exhaust any other possible source of revenue. i just want to make sure we are putting that out there.

>> it is a totally valid point. i want to validate this a little bit. the goal of us doing this is actually to save cost to the marina, to save maintenance costs, and to increase the useful life of the docks, which is all designed to create the most efficient and affordable marina we can. >> i understand these folks have been with a sub-par marissa for a long time. we have raised the rent. we still have not had the benefit, and i just cannot go there unless that is the last resort. even then, i do not know how to do it. >> should we get public comment? >> good morning. i sent you a letter about the questions i had concerning the

proposed changes to the yacht club lease and the department put the obligations regarding the project. we met on tuesday with staff involved with the project to respond to my questions and help clarify many issues. as a result, i can give you some really good news. the cumulative fund balance of the west harbor count is not pledged to the department of boating and waterways. funds are available to use in the west harbor as necessary. this means that the repair of the sea wall is not dependent upon modifying the lease with the yacht club, as you were originally told. it is now clear that $2.7 million cumulative surplus is not required by the state as collateral to repay the $24 million loan. therefore, this money can be used to balance out the cost of the sea wall repairs be on the remaining project. the money is available now without any claims on a.

best of all, the commission does not need to change the rent credit terms of the lease or go to the board of supervisors to fund the project. you do not need to give away your authority to the tenants and general manager for approving major capital projects in the marina as proposed. you still have the power to keep the approval of all yacht harbor city projects transparent and in the view of the public as such decisions should be. i have advised the city capital planning committee of these proposed changes to the lease and told them of my concern, of leaving their committee out of the loop for approval of major city projects. i will follow up with them about these procedures if indeed you intend to change the lease. this is an end run around the public process. i am putting you on notice. you should be very happy that

you can get the sea wall you so choose and save for all the repairs you want and it is doable with an existing funds. i support the project under those circumstances. also, i would like to point out there are discrepancies between the terms for repayment between the letter of understanding and what is in the lease. i can talk to staff later if you want to get into that, but i suggest you not go in that direction. thank you. >> i am one of the few remaining members of the senior boaters support network. most of them have given up. they have become ill or they are dead. i am still here saying back i am very heartened to hear that commissioner lee is supporting endorsing the fact that this will still be a public marina for san francisco residents.

i am a 40-year san francisco resident. my sister and i have had this boat for a long time. right now, i am paying $1,000 a month in berth fees, and i am not even using it because it's so letting the harbor use it to votes around. i'm trying to get an assignment to assure that i will keep it so i could get another or completely overhaul my book, but -- overhaul my boat, but in the meantime, i am hemorrhaging financially. the san francisco yacht club is not. if, like the previous person mentioned, there are ways to get this money without already affecting the cap of the lease -- it was a wonderful lease. they got a very good lease, and now, you are making it better for money you do not really need in a budget crunch time. if you can get the money elsewhere, please stand up and

do it. we residents and berth holders are hurting. we are hurting from indecisiveness, and we would like to get our lease assignments so we can move on with our lives and keep our boats. we cannot stand up to the st. francis yacht club. we stand not -- we cannot stand up to the america's cup. we just love the day and want to stay. please consider this. thank you. >> is there anyone else who would like to make public comment on this item? seeing none, public comment is closed. >> can you respond to nancy's comments? >> after nancy came in and met with us on tuesday, i guess, i did plugged into my cash flow analysis and assumption of

taking $325,000, basically appropriating $325,000 out of fund balance, and it has a significantly negative effect on our debt coverage ratio. while the fund balance is not pledged when i plug the number into my spreadsheet, i go from having a debt coverage ratio of over 100% to one of about 50%, which is not acceptable coverage ratio. those are the numbers that i ended up with. commissioner lee: can you talk about the debt ratio, what is acceptable -- are you talking about what is acceptable by the dbw? >> yes. commissioner lee: while you

could find it, you would mean the unacceptable debt ratio, which would trigger what? what with the ramifications be of having a negative debt ratio? >> we pledge to boating and waterways that we would meet a certain ratio. if we fall below that, then we are not in compliance with our agreement. i will say that it is only in a single fiscal year, right? there is a single hit, and then we come back up, but in that particular year, we do not meet the coverage ratio. >> would that mean that the loan would then be -- there would be a higher interest rate? what happens? >> if we are in violation of the terms of our loan agreement with the state, the technically, they are not -- they can withdraw the loan.

commissioner lee: we would be putting our loan at risk? >> potentially, yes. commissioner lee: so it is not a simple -- as simple as borrowing -- or as spending the funds because we could lose the loan. >> correct. >> it is clear to me reading the background of this that it is practical and pragmatic for the overall project. the crux of the discussions around if the contingency fund is not there, that we would go to other revenue sources which are potentially there to pay the debt service. so there is a spectrum of ways to look at this.

the conservative way is we have no guarantees. the liberal way is we are going to have lots of cash coming in from these potential revenue sources, and some -- somewhere in the middle probably lies reality. i think it would be the responsible thing to do to move forward, and so i would support it because i think it makes, in the bigger picture, more sense to do this. i think, given the potential of these revenue sources that we are talking about, that there is no reason to believe they will not be there, marina green will not become less popular in future years. it is going to become more popular. i think the more we upgrade the surfaces -- the services we offer there, the more potential there is for revenue, so with that, i would endorse this and look for a motion. commissioner lee: i will make the motion, but i want to preface it by saying that if what is at risk is the loan, i

find that that is too big a risk to take, given the work that we have to do in time for fall for all of the events we have planned. i do feel, though, and i am is sympathetic to the owners who are concerned, as they should be, about the potential revenue projections falling soared and then -- falling short and then having to bear the brunt of any increases to fulfil the financial reality. i am think -- but with that said, i think this is an important project. a lot of work has gone into it. i think we should support it, so i would like to make a motion. >> it has been moved and

seconded. all those in favor? opposed? hearing none, it is unanimous. thank you. >> we are now on item 9, the acquisitions policy. >> good morning, commissioners. the item before you is discussion and possible action to approve the revised acquisition policy for the acquisition of real property with funds set aside for that purpose under san francisco charter section 16.107, the recreation and parks and open space fund and from other sources. the item is presented before the

capital committee. i am also going to do a presentation for the full commission today. over the last year, working with the parks and open space advisory committee, reviewing some possible acquisitions, it became clear that the current acquisition policies, though it had excellent goals, was a very difficult document to use and rather complicated in its methodology and became confusing for the public and sometimes staff to use. one of the members actually mentioned that she felt bad for staffed and members to have to try to do some of the scoring was very complicated. so what we tried to do was make a policy that is much easier for staff and public to use.

just to overview, acquisitions can be done in a few different ways -- purchase combination, jurisdictional transfer property. sometimes, jurisdictional transfer of property can be lower cost. sometimes, there are costs involved. we have a variety of funding sources. sometimes, there are development impact fees. sometimes we are able to find grants that pay for acquisitions, and sometimes, there are other funding sources. all acquisitions are reviewed by the commission, and the board of supervisors ultimately is the body that approves an acquisition. said the acquisition fund set

aside is an annual property-tax of 2.5% for each $100 of assessed valuation. the proposition approved by the voters also states that not less than 5% of monies, of that set aside will be designated to the acquisition of real property. at this time, the total acquisition fund set aside balance is estimated to be approximately $9.3 million in this fiscal year. this is not a presentation asking to use any of that money. this is a presentation to review the revised policy. i have included in the package, though i will not go into extensive detail, information that i also provided a couple of months ago for the capital committee, which was kind of reviewing the overview of things the city planning department is discussing through neighborhood plans and future open spaces

city-wide to give some context to the acquisitions that proceed over time and are being discussed by various planning organizations and bodies in the city. the current policy was approved by the commission in 2006. again, we have been working with members to try to make it easier to use, and the new policy has got all the same general principles of the last policy, but distilled and a bit clearer. the outreach we went through, we have over 14 meetings with members, and i should just mention that some of those meetings are focused also on reviewing and cleaning up the roster, so it was not just a policy. we also got to review the roster, and they had reviewed and that the roster. we had a few different documents that have -- we reconcile all

that. some of the rosters have either already been acquired or had other histories. we worked a really long time on that. i will acknowledge the work of nancy on our group, who helped us review and understand a lot of the history and analysis of some of those properties. i would also like to recognize the work of john updike, the acting director of the department of real estate who helped us in many of our meetings. we made several presentations along the way to check in as we were working on the document. so the court policies and new acquisition policies are one, a focus on areas that are open space deficient to acquire

properties that have identified funding for purchase development and maintenance, so properties that have identified funding to fund the purchase, which is the acquisition, fund the development of turning whatever the property is into a park if it is not already park-like, and to pay for maintenance are also priority in a policy. properties that encourage a variety of recreational open space uses are also a priority. i can go into a little more detail in this topic, but briefly, properties that are high needs use basically the following four principles -- that it is in area that has high population. a lot of people live there in a ratio to the amount of open space. places with a high percentage of children and seniors, carriers were households are categorized as low-income. we know that when people have

less resources, they often are not as likely to go as far for open space. also, freeze and areas that are identified in an area plants of the neighborhood planning department document that would bring additional residential future density to an area, so trying to acquire properties in those areas so that we can meet future needs for additional parks. also, this policy identifies and prioritizes areas that fall into a gap. parts of the city that do not have parks or a playground within a quarter mile or half a mile would also receive additional consideration. again, the policy asks the commission to prioritize projects that have identified funding in place. this was something that has come up here.

it is very important for people when we evaluate a property is that those properties have already had been about funding for the purchase development and support of maintenance -- those properties the price. 17th and folsom have all of these sources. that is one reason why i think that property really met the goal. the policy also identifies four major types of potential recreation and open space uses and essentially provides a framework to identify which properties meet those needs. passive recreation, trails, other types of passive recreation. natural resources. sites have on them existing natural -- natural resources, and they are usually sensitive to these and the like. polls, playgrounds, those kind of facilities that are more associated with sport, and

special features. properties that may have a view or something that is really special about that piece of property on that point in the planet. so it perhaps is something that has waterfront access. the policy also has us identify for each property other things we want to flag. if a site has challenges in terms of transit, health issues, things like that, those would all be identified in our work sheet. i will show you a couple of documents we have tried to added to the policy to make it easier to use. there is a clear step-by-step process laid out in the policy. any member of the public could -- or the department, staff, anyone could essentially identified a property and submit a form, provide the address and

information, and that way, we can always track when a property needs attention. step two, we would do a thorough site analysis, review the site, answers some critical questions, and then we have created this evaluation form, which we feel it is very clear -- it would allow us to communicate with the public which item -- a single site was identified as a meeting this goal. it would meet hi needs goal. for example, it would have maintenance funds in place. maybe have the fund available, so it would be able to identify what those items are at the park's score high or low on. here is an example of how bad evaluation form would be completed, so it would be very easy to use. then once it had gone through an evaluation, we have in the policy recommended six months or

as necessary potentially more frequent presentation to members of the parks and open space advisory committee to get their feedback on properties that are being evaluated that would also be noted on the acquisition roster, and the acquisition roster would be a living document that would show how a single property had been evaluated according to the new, revised policy. so once it is on the roster, there is still a lot of work to be done, and we would do detailed analysis. often, there's time for identifying a property until it is actually acquired because there is additional work and research that needs to be done. of course, the final step would be the determination of this commission, this commission then may draft a resolution recommending that