if you are already intending to undergo some kind of analysis to understand what the appropriate methodology would be, would it hurt you to come back with an amendment to either the underlying document to say you would complete some type of cost sharing analysis by the end of june 30, 2012, and the contract's going forward would reflect those changes? it does not sound like that would be a difficult thing to amend. >> in terms of sending a letter to you -- this was enough to go back to the bart board for approval. in terms of the cost sharing agreement, we want to do that now. we can send you a letter indicating that we agree to do that and that bart has agreed to do the cost sharing analysis of you know that is happening, and then we can report back to you after that is done.

>> my apologies for being late. this was a concern to me. i missed some of this, but is there a commitment to do this study 2012? that is something we could amend in this resolution. >> you could amend it in terms of the resolution. in your resolution, absolutely. we have every intention to do this study and we have gotten bart sap to agree to do the study. supervisor chu: i would feel more comfortable having that here. the last study was done in 1994. the last -- >> it is a percentage. i agree with you that an expert extends to the study, and we are intending to do the study. supervisor chu: thank you. so i know supervisor mirkarimi is on the roster, but i would suggest that perhaps we can skip

over this item and leave it open for a while and see if you can work with the city attorney to see how we might be able to reflect the resolution to see some of the things we want to see, which is making sure we have some kind of analysis that accurately depicts what the shares should be in terms of recovery and that we have some way to make sure we are recovering for those costs, because i think that is what we generally want. supervisor kim: why don't skip over action on this item and have you work with the city attorney, and then we will go to the next item. >> item number five, resolution authorizing to mta to enter into one or more consensual termination agreements with equity investors and other parties that participated in the leveraged lease transactions ackees -- executed in 2002 and

2003 with respect to the san francisco mta brenda light rail . . >> janet bartonson. good morning. we had spoken to you about not being able to be present until 11:00. is it possible to hold this over? supervisor chu: why don't hold this item over. >> item number 6. resolution authorizing the director of public works to execute an amendment to the owner control the insurance program for the laguna honda hospital replacement program. >> john thomas, a project

manager of the look and a honda hospital replacement program. the modification increases the total contract by 1.9 $4 million to a new total of 17,323,400. the extension is critical to the program, as it provides continue its insurance coverage for the remaining work. the remaining work being the remodel and adjust the compensation estimated peril to reflect actual project costs. this is by way of background. it was a competitively-bid rf2 process that resulted in the department of public works and drink and to contract in june of 2005. i am happy to answer any questions you may have. supervisor chu: can we talk a

little bit about the time line in which we think the work would be completed. >> it was to cover all phases of the project from the new work now completed and the remodeled at it existinof the existing h . h wing resulted in some delays. that held us up on that phase, but the work has been more difficult than anticipated. a significant section of the roof, over 60% has had to be removed all the way to the concrete and replaced, so that has extended our contract out into late 2012. this contract now will extend coverage through december 31, 2012, which is slightly beyond our cometion date. supervisor chu: thank you. why don't we go to the budget

analyst report. >> madam chair and members of the committee, on page 6 of the report will show the elements of why this requested $1.9 million increase in insurance services is needed, and we concur with that. there is a technical amendment that needs to be done. there is an incorrect amount, and on page 7 we recommend you amend the resolution to execute the sixth amendment to the program from not to exceed amount 15,000,382t. we recommend you approve this as amended. presideded. supervisor chu: any members of

the public that would like to comment. >> my name is douglas yep, and i live in the same district as laguna honda hospital. i am glad to see this item come up for discussion. i am glad the sponsor has something to say regarding laguna honda hospital. according to my research on the internet, i do not see very many comments in regards to laguna honda hospital said by my district supervisor, so i am glad he is doing something in regards to laguna honda hospital, since it is a common fact that it is in his district. secondly, i would like to oppose this resolution, and the reason why i hope pose this resolution is that even though i am not an insurance expert, i always feel hesitant when an entity has to self insure itself. given the size of the insurance market, it should be fairly easy

to get an insurance company to ensure your project. usually you cannot get insurance because there is a valid reason why you cannot. since i do not know very much about this particular sell insurance project, it just the concept of being self insured makes me a little hesitant to see why it should be self insured since most entities, especially hospitals, should be able to get insurance in the open market. in regards to laguna honda hospital, this is another example of where people point to which other and say it is not my fault that there is something wrong. in regards to that, someone has to be accountable for that situation.

that is kind of like mr. miller saying that i am not responsible for our city's bankruptcy. it is not my fault. notice he did the right thing and it allowed the bankruptcy, because he is basically admitting the problem, even though everyone knows it is just one agency that caused the problem in harrisburg, not a systemic failure. the problem as it relates to the situation is that laguna honda hospital basically needs more examinations and more hearings like them. in terms of the resolution, i think we should debate it and maybe have the sponsor sit here and answer some questions, rather than just sponsoring the legislation that were made a totally silent. for $2 million i think we should spend a little more time. it the city is that free with the money, could you hand me to

million-dollar scum and i guarantee i will make a profit with the money. thank you. supervisor chu: thank you. next speaker, please. >> my name is as washington. i am here speaking basically in parallel. -- ace washington. it comes down to a couple of issues, particularly when you were dealing with city government. i have been and will continue to advocate community perform. people have been asking, what is committed to perform? i will unveil that slowly. i gave some of that to by supervisor a year or so ago. i brought it to him in a big sheet of what might interpretation of community perform is. that gentleman just spoke, i know him somewhat, but we are right there on issues right now, because number one, city and

county -- you guys come equipped with your analysts', your liaisons', consultants -- you have all of those things for city and county, but go to the community and there is nothing. you do not have a consultant, do not have an analyst, none of those things. and we need to flip flop it and drop it for the community. we need liaisons' to the city and county. you have all of the money that you can spend any time you want to. make these bond request and do what ever you want to do. most of the supervisors are here eight years. our community lives here inevitably. we're here to suffer whatever decisions you make, which we have no input. those days have -- simply have to stop, at least here in san francisco. my question is and will be through the election, who was in

control here in san francisco? i would like to know. it is simply not the mayor. whoever is controlling him -- i dare not say it, but i will say it -- willie brown. i am not scared to say his name. there was an interested -- incident where the man was questioned and willie brown, but he was interrupted by someone in there was a big uproar, and there was a big uproar because we want to know who is in control. ladies and gentlemen, i have no ties to no one. i fear no one. i am almost like martin luther king. i could draw you a plan for what the community needs to do, but who knows? right now i done made history at city hall, but now they're trying to get rid of me in the press room. i am here to show a parallel that the community has to wake up, and i will speak of for my community. we need community reform. we need analysts. we need consultants.

we need all of that on this side of the ledger. so that when we come to city hall we will be prepared, because those days are over right now. supervisor chu: thank you. are there other members of the public that like to comment on this item, item number six? seeing none, public comment is closed. can we take this without objection? we will do that without objection. to the underlying item as amended, a question to the city attorney whether it is substantive or not? i do not believe it is, because the not to exceed amount has not changed. thank you. the underlying item as amended, we can do that without objection. thank you. item number four, just wondering if we come to language that will

work? >> andrew shen. i think we have proposed an additional where as paragraph for the resolution requiring the completion of the study that you've discussed. the new whereas pair press started on page 2 line at 10 the, whereas the sfmta and bart shall complete a study of cost as described in 4a of the cost- sharing agreement by june 30, 2012, reflecting the agreement to commit the steady and those additional impact it would have in the agreement. supervisor mirkarimi: mr. rose's contention is he wants to make sure that is honored and at least be somewhat bilateral. does that reinforce the spirit

of the agreement? i am asking the deputy city attorney. does that reenforce the intent that we can at least rest, because resolutions are not mandatory. >> supervisor mirkarimi, strictly speaking, the agreement does not require this be done by a date certain, but i believe mr. rose is satisfied with this change in a reason to doubt -- supervisor mirkarimi: memorializes it certainly helps. motion to except the amendment. supervisor chu: thank you. we can take that without objection. that will be the case. on the underlying item as amended, would that require a continuance? ok. given that on the underlying

amendment item as amended, can we take that without objection? great. we will do that. think every much. why don't we return to item number 5. -- thank you very much. >> sorry i was late. thank you for hearing this item. i have with me peter ross from roscoe mitchell advisers who was here when the transaction was done. a -- i have with me peter ross from across mitchell advisers. the transactions that are subject to the legislation were entered into in 200012 into -- 2001 and 2003. the transactions were extremely complicated and were structured to enable equity investors to

take certain tax benefits. these were similar to the kinds of transactions that other agencies across the agency were entering into at that time, and encouraged to get some capital into the transit system across the nation. since 2003, however, the tax laws have changed, and the irs has determined the equity investors are no longer able to take its vantage of the tax benefit, and that was their risk, and that was clearly articulated in the documents. the transaction at that time generated 40 million to the new system. we receive the entire benefit of front, and have seen nothing on an ongoing basis. the lease payments have been made to certain funding arrangements that are part of the transaction, and all payments on behalf of the mta were made, and they did not

incur any additional payments that were required. part of the original funding agreement involves a purchase of securities that mature at the end of the transaction in 2000 -- 2026 and 23 respectively. because interest rates are significantly lower today than i 2003 and 2000n 2003, the valus increased substantially. why would we want to consider terminating early? we benefits in several ways. one, it would avoid a potential future technical default, as we will no longer have to comply with certain documents for the replacement of certain financial participants if the rating falls below certain levels. one of the financial participants insured guarantee

it is currently rated three close to the technical default level. second, it will simplify the financial reporting on financial statements. third, and maybe one of the most important items, it removes all liens on the least related to light rail vehicles. equity investors would benefit from an early termination, because they will gain control of the federal securities and use the increased value to offset the investment losses created by future tax benefits. the proposed legislation before you authorizes us to enter into early consentual termination without obtaining additional improvement 5 in '88 ford and you under different parameters. -- additional imapproved it by you in the mtand the mta . we will report back to you on

any termination as soon as they occur. we need this authority to terminate to avoid interest-rate swings that might otherwise occur during the normal approval process, authorization process. a substantial rise in interest rates could negate the benefits and equity investors>> we wouldo enter and determination. once an agreement is reached, both the equity investor will need to move quickly. the budget analysis report was thorough and good. the recommendations, they are articulating its. we are fine with them. the mta has received the benefit of these transactions. the benefits are significant to us. we would allow it to avoid any

future liability. we're able to answer any questions you may have. supervisor chu: do they want to add any comments? >> that is the conclusion of the presentation, but they are here to answer any questions. >> we concur with the m.t.a.'s objective in entering into these future termination agreements. as budget analyst, i would normally not recommend that to you because i would want the board to approve each agreement. we understand that interest rates fluctuate on a dime and i think this is in the best interests of the city. we do have a couple of recommendations on page 11 of

the report, to recommend that you amend, and incidentally, the city attorneys advised me. we were looking at an earlier version of this legislation. our first recommendation, we recommend amending page one, line 7 instead of line 6 of the proposed resolution to specify that there is no financial liability to the city for the termination. the way it reads now is just for the sfmta. and page two, line four. requiring any early termination agreement requires rival approval -- prior approval, just a further safeguard. we recommend page two, line 7 an7, no later than 30 days

after the mta enters into a termination agreement with an equity investor if they do enter into such an agreement. and overall, i consider it to be a policy matter. i concur with the concept. supervisor chu: a quick question, we have heard about the transaction that associatioed with vehicles -- >> we have other finances, but they are related to the dry. -- garage. supervisor chu: in terms of the concept of what we would want to make sure that they had the authority to unwind, it makes sense because we have issues of

technical default given where the economic scenario is these days. what is the incentive for the original investors to unwind from this? >> they no longer have the advantage for the tax benefit that included in 2003. many of these investors want it off of their portfolio because the valuations of underlying securities are so strong that they can use the valuation to write off what is on their books. particularly overseas banks that were original investors. we don't think we have for investors at this point. we don't think that all four will be agreeing to the consentual termination.

>> a deputy city attorney, i apologies for all of the editing this morning. if you were to except the budget analyst recommendations, it would be best to incorporate those changes in the first results clause further down the page on line 14 to make sure that it is consistent throughout the resolution. additionally, in the second recommendation, the budget analysts suggested additional language about requiring approval of the board. in the early termination agreement that requires out of pocket costs shall require prior approval as opposed to just requires. supervisor chu: other members of the public that wish to speak on this item?

public comment is closed. colleagues, can we take the amendments that have been recommended? mr. rose has three recommendations that he read into the record, the different lines that are associated with them. there were changes on item number one, amending page one, line seven. and on page two, line four, and on item number three, to amend line 7 to make sure the city does receive a report after 30 days of the termination and to make sure that it is explicitly spelled out that it is not just the mta that is liable. and in terms of the city attorney was a recommendation, also in terms of accepting amendments no. 2 instead of the city requires prior approval, shall require. we can take those without

objections. to the underlying guide and as amended, will that require a continuance? thank you. on the underlying item, can we prove that? without objection? item #7. >> resolution authorizing the issuance not to exceed $8,100,000 for the purpose of providing finances for the acquisition of a unit, the family rental housing units. supervisor mirkarimi: this is for the 333 fell street apartments on the border of district 6.

the target population is for families at 50% of the area median income. they have an average tenure of 11 years. the building population includes 28 children in the 62 seniors. average occupancy is 99%. the target population will not change as a result of the project. the current residents will remain during and after the rehabilitation project. it will be green including the installation of photovoltaic and the replacement of aging building elements. it will prepare for the affordable housing. it is a good project and it meets all the standards that we would want to see. if you like to add anything, please.

>> i am with of the mayor's office of housing. we also have kevin with bridge housing, the sponsor of this project. this is a project that requests that the city health issue bonds. it is one of the projects coming over from the redevelopment agency because they are not in a position to issue bonds. you'll be seeing a number of these projects over the next couple of months. we are really happy with this project because bridge has managed to complete the rehab work without any additional city financing. the redevelopment agency gave the project $1.5 million about 19 years ago to build of the building. they have done a wonderful job of owning and operating this building over the last 19 years. the building is on the