>> good morning. my name is carmen chu, chaired the committee to i am joined by supervisor mirkarimi and supervisor kim. the clerk today is mr. victor young. at sfgtv, we have marked and nona. the we have announcements? >> yes, please turn off all cell

phones. if you wish to speak, please turn in a card to myself. if you present documents to the committee, please provide a document to the clerk. items acted upon today will appear on the board of supervisors agenda on october 18, 2011 unless otherwise stated. supervisor chu: thank you very much. call item number 1. >> resolution approving the fifth amendment to the agreement between the city in western states oil increasing the total not to exceed amount of the contract from $50,500,000 to $75,580,000, pursuant to charter section 9.118b. >> thank you very much. >> good morning petraeus of the assistant director of the office of contract administration bigger story here to talk about the fuel contract with western state. it is for gasoline, diesel, biofuels, and that began on september 1, 2009, and it is in its third year.

the city's been approximately $25 million a year on the term contract to last year, the city spent about $27 million a year. the increase was due to increase in fuel prices across all types. we anticipate this year's fuel usage will be on par with last year and have requested a small contingency in the event that fuel prices continued increase. we concur with the report and recommendations we are requesting approval for the court to increase the total contract amount to $75,580,000 to cover fuel spent during the option time. these expenditures have already been approved in the department budgets, and what we are requesting today is the purchasing authority for this contract. supervisor chu: thank you very much. these items have already been allocated to departments in the budget, correct? >> yes. supervisor chu: you mentioned that the increase in expenditures were primarily due to rising fuel prices and not

necessarily more mileage it to you -- more mileage is being used by the city? >> that is correct. supervisor chu: thank you. let's go to the budget analyst report. >> madam chair, members of the committee, based on our analysis, as shown in table two of page 5 of our report, we estimate that the total not to exceed amount for this second one-year auction time, for september 1, 2011 through august 31, 2012, should be increased by $27,800,000. that is over two -- $2 million more than the increased amount. this would result in a total not to exceed needed amount of $70.3 million, instead of the total requested amount of $75,580,000 under the proposed resolution. therefore, as stated on page 6 of our report, we recommend that

you amend the resolution to increase the requested increase the amount by $2,720,000. likewise, increase the total requested not to exceed amount of $75,580,000 by $2,720,000. we recommend that you approve the resolution as amended. supervisor chu: thank you. if we do not have comments, let's open this up for public comment. any members of the public who wish to speak on item number one? seeing none, public comment is closed. colleagues, can we take the budget analysts recommendation? we will do that without objection. to the item as amended, can we move that forward with recommendations? >> [inaudible] supervisor chu: with that require a continuance? ok, -- [inaudible]

-- we are going to have to continue this item. colleagues, can we continue the amended item for a week? we will do that without objection. thank you. item number two, please. >> her item number two, resolution authorizing the amendment of an existing lease at 160 south van ness avenue with stuart b. and myrna j. aronoff revocable trust and trudy cohn as tenants in common, for the human services agency to provide construction allowance and extend the lease term. supervisor chu: thank you very much. >> good morning. john updike, acting director of realistic. i am joined by a member of the human services agency. this is a lease extension for 160 south van ness avenue, a property that the human services agency has been in for quite some time, since 1999. what this lease amendment does is facilitates a tenant

improvement project, allows the city to defer its repayment of the expense affronted by the landlord to provide needed improvements to the space, particularly for the investigations division. there are some safety and office control issues that are addressed by this approximately $54,000. what we have before you is a three-year extension. it maintains the base lease rate. there is no real increase. it simply amortizes the cost of this $54,000 of improvement over the three-year extension at no additional expense. there's not a path through administrative costs or enactment of capitalized interest. it is a pretty good deal for the city, which is a pleasure to bring before you. additionally, we did some market analysis to be sure that, in our opinion, this rate is consistent with market, and it is from what we found, considerably under

market. finally, the budget analyst report, there is a suggested slight amendment to cap the amount of $54,000, and we're certainly comfortable with that a man that suggestion. certainly, we're here to answer any questions you might have. supervisor chu: thank you very much. >> madam chair, members of the committee, as we point out on the bottom of page three of our report, and as mr. updike has indicated, the additional rent for the renovations would be $1,500 per month for the requested 36-month lease extension. that would computer out to the $54,000 because of the total monthly rent would be $30,800. that is a base rent of $29,300 plus the $1,500. and also, as indicated, we are recommending that you amend the

resolution to add the language between lines two and three on page 3 to read -- for the result of the human services agency shall not read -- be irresponsible for any renovation cost above the estimate the cost of $54,000 and that you approve the resolution as amended. supervisor chu: thank you. a quick question for mr. updike. i noticed that this grant agreement went into effect, and subsequent to as being there, we decided we needed additional medications to this space. were there programmatic changes that occurred midway through or is this something we had anticipated? >> as i understand, it is a case of a slight change in program and a slight change in the need for additional security issues to be addressed. these might have also been program issues beyond human services. they are responsible to other agencies. i think phil can speak more

directly to that. >> good morning. we had two major changes in the way we do business at this facility. this results from moving the state fair hearings from the fox plaza to this location, which actually saved us some money because we incorporated those hearings into an existing conference room. however, in doing that, we had a great a barrier, or we feel is spreading to create a barrier between the public who come to the fair hearings and our staff that were behind the barrier. one of the improvements in this is the barrier. the second is that we have been gradually assuming some responsibilities formerly held by the district attorney to do special investigations of welfare fraud. the other apartment is to provide more privacy and security for the investigators that we have added to our staff overtime. so there is a change of use. this building has been occupied by several city agencies,

including payroll. so it is difficult to say that we should have anticipated the need when we started the lease. i think it is a very reasonable and fair way to finance it. i actually applaud realistic for coming up with this solution. supervisor chu: great, thank you. i also want to say i am very happy to see that you are back with us. welcome back. >> thank you. it is nice to be back. supervisor chu: thank you. colleagues, if there are no questions, let's open it up to public comment. any members of the public who wish to speak? cnn, public, disclosed. can we take the budget analyst recommendation, which heavily the department is in agreement with? we can do that without objection. to the item as amended, can we send this out without -- with recommendations. ok, without objection. thank you. item number 3. >> item number 3, resolution authorizing the issuance from time to time, one more series, of not to exceed $1,355,991,219

aggregate principal amount of the city and county of san francisco general obligation refunding bonds, including the initial -- [inaudible] -- to refund certain outstanding general obligation bonds. supervisor chu: thank you very much for this item. we have nadia with the office of public finance. >> good morning, supervisors. i am from the controller's office of public finance. we are requesting an authorization to issue refunding general obligation bonds in an amount not to exceed approximately $1.4 billion to allow for issuances of refunding bonds, one or more series, to take advantage of a low-interest rate environment. the resolution would also

include provisions that allows that flexibility. we have stated in our memo and in the resolution that we would expect to achieve 3.5% savings. we have also allowed for final majorities to pay with a series of bonds that are under consideration for refunding. we have minimized with the cost would be. the idea is to take into account all the outstanding general-obligation bonds in our portfolio. we have about 12 authorizations, and we have multiple series because of this allows the flexibility for our office to be able to access capital markets as the environment is appropriate. when we presented today is showing, with 2.7%, we could refund today approximately $411

million, resulting in over 9% savings, equal to $36 million. we have also included an appendix a that outlines the city's financial conditions. they have been updated to reflect the budget. we expect the certification. we have also included updates on investments, the retirement peace, in new transactions. we expected the board will delegate authority to the comptroller to make amendments. so that authority will be delegated to the controller to make those changes and give the statement. we also concur with the budget analyst recommendation to limit the term of the availability to five years, and that will be open-ended.

that is it. i will be happy to answer any questions you may have. supervisor chu: thank you very much. let's go to the budget analyst report. >> madam chair, members of the committee, as is pointed out on page 6 of our report, this first series will result in an interest rate savings will result2.08%. the debt service over an 19-year time span, the annual debt service will be about $25.4 million. as she indicated, we have made a recommendation to put a time limit of five years on the issuance on this refunding bonds. supervisors, that would be consistent with what the board of supervisors did in 2004 on a similar piece of legislation. our recommendation on page 8 is to amend the resolution to limit the authorization issuance from

time to time, of not to exceed $1,355,991,219, refunding bonds to five years. then we recommend you approve the resolution as amended. supervisor chu: thank you. given no additional questions, let's open this up for public comment. did you want to add something, nadia? >> i know we talked briefly about some amendments. we are suggesting to the resolution, page 6, 1, changing the sentence that reads -- the board of supervisors to the controller to fill in any blanks in the bond. then moving to line 20, changing it from the city treasurer to the controller, and changing registered by to the city treasurer. supervisor chu: thank you.

>> i forgot to mention, most important is that this will result in about a $36 million net present value savings, which of course we feel is very good and should be considered favorable by the board. supervisor chu: thank you. do we anticipate that there will be any refunding opportunities coming up that we have not yet budgeted or anticipated? >> we are working on mosconi, which was approved a few weeks ago, and that was anticipated. this one has not been anticipated, at least for this calendar year. so there will be some more opportunities here. supervisor chu: ok, thank you. public comment. any members who wish to speak on this item from the public? >> good morning. my name is douglas, and i have lived in san francisco for 59 years. when i take a look at this item this morning, i thought it was kind of interesting that there

are so few people here to discuss a $1 billion item. for the city of san francisco to approve a $1 billion item with so little public participation seems a bit superficial to me, so i think that i would like to suggest that maybe items like this should have a little more publicity, so at least people realize that we are only dealing with $1 billion, and i am sure the city has a lot more debt than $1 billion. also, it is a little surprising that in this hearing so far for this item, there is very little discussion as to what that $1 billion actually covers in terms of city spending. obviously, the city spends money for whatever projects and things it wants to spend money on, but i would like to suggest that in the future that the city put aside any savings, like from

this resolution, and put it aside for necessary future spending, rather than just spending it on, you know, political projects. it is kind of obvious that $1 billion needs to be studied. we do not want to make the same mistake like the federal government and just give a company $535 million with very little oversight. in my opinion, secretary steven chiu should have done more, and i hope he is not the fall guy for the loss of $535 million, which is not a drop in the bucket, especially for the city of san francisco. in regards to refinancing, everybody agrees that you're going to save money because of the lower interest rate, but then at the same time, it is not going to help the city of we're not going to rein in spending. i would like to suggest for the members of this committee to

read the article month -- from monday on the top city earners. it is no surprise to me that the top 10 were all from the department of public health. if i remember street, nine of the 10 were from san francisco general hospital. to close, i would like to say hello to louis. i remember her from kcbs. if i remember correctly, she used to do a news show out of denver. thank you. supervisor chu: thank you. next speaker, please. are there any other speakers who wish to come forward with this item? seeing none, public comment is closed. i want to appreciate the public comment that was made. i do want to clarify for members of the public might not be here in this room or have not had the opportunity to read the item, this is not additional new money that is being requested to be issued by the city. in fact, the city had, in

previous years, for many years, issued a number of debt issuances to finance large public works improvements and projects. this item allows the city to refinance, much like you with your own home, it the interest rates are such that we will generate savings from it. in all, this is an item that would actually save the city money if we go forward with refinancing, just let you with a home mortgage when the interest rates are low. just wanted to clarify that. this is not new money. this is refinancing of existing dollars that we're already obligated to pay. ok, colleagues camino -- colleagues of a given that we have heard public comment, there is a recommendation. can we take the recommendation without objection? moved by supervisor mirkarimi. a second bite supervisor kim. let's do that without objection. to the item as amended, can we send that forward with recommendations? we will do that without objection. thank you very much. final item, number four. >>