give you a chance to come back in january and have a hearing, if you wanted to, further discussion. we would expect the rates would be set by the middle to end of january so that we can prepare our budgets based on those. because of that, now, or at the end of -- whenever we go to the process today, should you have thoughts about how you would like to see us bring forward a rate increase, we will look to hear them. we would hope not to bring a rate increase for that would be vetoed by the board. supervisor chu: i know that we want to move on the agenda, but i just want to comment, with regards to be able to increase the rates, i think a rate increase that is being proposed, whether it is two since, four since, it is substantial for us and the general fund, given that we pay the 3.7 cent per kilowatt hour rate. we understand it is a lower

rate than the cost is. i think the general sentiment that i have is we probably need to start picking up more of the cost to allow for hetch hetchy and the power program to be more successful. i am very concerned. i would like to make sure we are not to believe impacting our budget. we know we have a budget deficit in next couple of years, so we want to be conscientious of that. in terms of what we're paying for for that rate increase, in terms of being able to pay for infrastructure and the general operations and maintenance of our facilities, i think that will be a necessary thing. anything above and beyond that, i would have questions about. the two-cent increase will be more than a 50% increase on our current rates at the moment, so it is significant, even though it sounds very low. i would hope, and i pressure you for speaking to the commission so that we have the opportunity to potentially act accordingly

with the rates. >> we share your concern, supervisor. when you freeze rates for 10 years, when you move, you had a bigger move, rather than a gradual movement. supervisor chu: supervisor kim? supervisor kim: i just want to reiterate some of the point you made. i understand where this is coming from. i have begun to talk to the other entities that will be affected by this, including the school district. i know everyone in acknowledges the need to potentially raise rates but has concerns about being able to absorb this in their budget. i would want to look for ways that we can look with the work with everyone to make this happen, even if it meant having smaller increases over time. january, i think, is early. i know you want to be able to take this into account when you present the budget for us. i would rather see the overall budgeting and see how these

increases will impact your budget. preferably, i would rather see this in march or april. i think i would be more ready to make a decision at that time. january might be fast because of the holidays. everyone from the school district and city college will have a hard time try to grasp what this means for the budget and how they can allocate those funds. those are just bought some of my thoughts. >> i appreciate that, supervisor. the reason we did choose this time frame is that, we owe the mayor a budget by march 1. if this is not going to happen, we will be having layoffs. we need to have much more intensive conversations in our commission meetings in january and february as we prepare the budget, if it is not going to happen. supervisor chu: through the mayor's budget office, you are requesting departments to submit their budget. >> february 21 is the charter

deadline for departments to submit budget requests to the controller. then the controller for them to our office. supervisor chu: in terms of when the puc will go to the commission, it will go with a full budget sometime in early january? >> our first series are january 12. supervisor chu: since this is just a hearing, informational, i appreciate the information presented. if i could ask the puc to follow up with the committee members with regard to the rates and conversations you are having with the mayor's office in terms of was is comfortable. if there is an agreement about the what the rates may be, you may have to go to the commission as early, if you have a good assumption heading into your budget. that might be an option, rather than taking into your commission for approval. let's have a conversation off line and see what we can do if there is an agreement in terms

of what we can absorb in the budget. given the hearing on the power rates is done, i want to open up for public comment. is there anyone from the public that would like to comment on this item? item 10 or 9? >> eric brooks, standards as a green party, local grassroots organization. on item 10, at times, you have seen us at odds with the puc on various issues. at this time. we need to back them up on this request. i want to remind folks that climate scientists came out one week ago saying that we no longer have 10 or 20 years to get our global act together on the climate crisis. we have about five years to get our act together.

when electricity -- when what we're charting for electricity is a lot less than what it actually costs, it is the same situation with gasoline in the u.s., where we have been subsidizing it for decades and people waste it. this may not be an easy step, but it is a necessary step for saving the planet. the other thing that stopped brought up that i want to highlight, this is key to the bond rating of the power enterprise of the sfpuc. as you know, i have been working extensively with the organizers on getting clean power sf, our community choice program, off the ground. that will require a big revenue bond issuance to get it off the ground. the beauty of it is, raising the rates up to something normal will give us the opportunity to have sfpuc have the bond rating to be aggressive on building

renewals and efficiencies in the city and a clean power sf, and other programs. especially the efficiency in wind will bring in revenues with which we can go to departments, like the schools, muni, hospitals, and mitigate their increase, so it is not as bad. they are bringing in revenues and efficiency measures are bringing in revenues. please support with the sfpuc is asking for. thanks. supervisor chu: any other speakers? >> i also want to speak in support of the puc's plan with respect to the electricity rate. in light of the shortfall that is going to occur, it is occurring, has occurred, without eliminating these subsidies to

where the cost is not being paid, we have a situation that is not sustainable. the work needs to be done on hetch hetchy. renewable energy programs -- since we are talking -- supervisor mirkarimi and his work. there is a legacy of a lot of the program to have worked all these years that i think we will need some of this to continue. that is important that you have done all these years and i think this will help to move forward with respect to the solar program, clean power sf. as to the cost, there is a possibility this will is advised energy efficiencies within departments to mitigate the potential cost to where we may see cost neutrality. any energy efficiency work, we have identified $100 million in opportunities to be more efficient with electricity being used. the department may have to make some of these tough questions and they ought to -- may opt to

invest in these efficiencies. this could actually end up, what we're after in this, a sustainable system. strongly support the puc. thanks. >> thank you, mr. harrington your work at puc really shines supervisor mirkarimi, your work on the budget committee has been just fine i think it is time we looked ahead, we looked ahead and not behind you are riding on the back rows of the river of my puc memory and it is ever gentle on my mind i am so glad that you gave it the time i know that budget money is money that is awfully hard to find

and i know i am glad you made it all through the city budget grind you are riding on the back roads, the rivers of my memory and your budget puc is gentle on my mind i know it is not just another line i know that you are going to look ahead and not behind and it is time we looked ahead and we are going to find more money this time and we are riding on the back roads to the rivers of my memory and your budgets ever gentle puc on my mind on my mind supervisor chu: thank you. are there other members of the public that would like to speak on item 9 or 10? seeing none, public comment is closed.

colleagues, on item 10, can we filed this item? we will file this item. item nine, let us not act on this yet. we have a secondary item coming later on to hear the board of supervisors clerk's budget by -- guidelines. add that time, i would like to bring the mayor's budget office to come back to talk about the instructions at that time. thank you for your presentations. now, colleague, we have never item still before us. i believe there is a time constraint we have with surprise and mirkarimi, who needs to leave early. i would like to call out of order, item eight. >> item 8. resolution authorizing: 1) the sale of city property at the northeast corner of fulton street and gough street to the boys and girls clubs of san francisco for $2,500,000 subject to a declaration of economic covenants and a project use restriction; 2) adopting environmental findings and other findings that the actions set forth in this resolution are

consistent with the city's general plan and eight priority policies of city planning code section 101.1; and 3) authorizing other actions in furtherance of this resolution. supervisor chu: this item is buttressed by a number of individuals. the key sponsor is supervisor mirkarimi. would you like to make a few comments? the supervisor would like to move directly into presentations. we have a number of votes presenting this item. john updike from the real-estate department as well as kelly pressure from the office of economic workforce development. >> acting director of real estate. my section will be brief. i will give you the highlights of what it before you and then i will follow with some details. this is the possible purchase of parcel f at fulton and gough street pier this is a portion of the parcels obtained by the city

by caltrans as a part of per agreement from the year 2000. as indicated in the budget analyst report, approximately 22 parcels, 16 of which have been disposed of already, sold, generating approximate $31 million in revenue. this cooperative agreement calls for the city to create what is now octavia boulevard, to return funds received from disposal of properties back into transportation activities, specifically enumerated in that cooperative agreement and what are called ancillary projects. the citizen buys three committee was charged with working with city staff in developing those ancillary projects. so far, $31 million has been generated to date. this particular parcel, f, if we

can look at the overhead -- it is just over one-half of an acre. we did an evaluation and analysis of several properties. that was then reviewed again in 2009 and we saw run for a 44 disposal of parcels that no less than permited valley. we have affected some sales since then. particularly, placed out of auction, parcel h and j. here is a more detailed shot of the particular parcel before you today. this item come before you because this is a departure from that board authority. we are presenting to you a sales

agreement which calls for a sales price of $2.5 million, which -- knowledge is significantly under the market value, estimated at $4.4 million. that is our extrapolation of prior sales, activity in the area, relating back to the 3- year-old appraiser report which showed a more in-depth analysis of parcels of value. in addition to that sale price of the land -- and we must be committed to the particular details of the agreement, there is a participation as well related to the potential development of residential, 50/50 split of revenues generated from residential, should that occur. that helps both the buyer and the city in recovering as much revenue as we can from this use. it is a community serving use.

we believed it was justified to bring before you this opportunity for a sale below market in consideration for that committed to serving use. i would ask kelly from the office of work force economic development to go into the details from that use, and deferrals of costs to the city, both one-time and in perpetuity. then, we are happy to answer questions you have about the details of the real estate issues. >> thank you. supervisors, the boys and girls club of san francisco at fulton and got would propose to build a new facility with a high school- size jim, pool, are from, dedicated space 14th. at the center of the communities currently served by the earnest and gold club house located at page in stanyan street. boys and girls club provides a

critical service to the neighborhood. they have a lot history of partnership with the city of tent and cisco. the target area for the clubhouse is bounded by geary to the north, van ness to the east, haight street to the south, to visit tehran to the west. this contains more than 13 public housing facilities with more than 3005 of the units and more than half of those units are family units. the proposed facility at fulton and gough is expected to serve more than 200 youth per day during the school year and more than 252 per day for the summer for a total and a client base of nearly 3000 youths, ages 5 through 17. it is important to know, the boys and girls club house in the context of a larger market activity a plan, appendix c, the committee to prove it appendix to the plan, specifically highlights the need for child care facilities in the area. the 2008 estimate from the c. wyeth identified a need of 35,000 square feet per share

recreation space. they estimate would that it would grow to 57,000 feet. the cost of construction of a facility of this kind was at $70 million for the $57 a square foot facility. this was an unfunded estimate and him merely a projection of need. the facility of parcel f., of great benefits but at no additional cost to the city, other than oregon market retail. in many cases, the city owns these facilities. the city pays for this goes to the construction cost of the facility and also ongoing editorial, landscape, and made its costs associated with owning any building. a good analogy might be the hamilton recreation center which also contains a gym and pool facility. hamilton cost approximately $18 million to construct. the recreation and park apart and has estimated $300,000 annual cost for janitorial and

landscaping maintenance, leaving aside any programming and associated cost. in this transaction, the city would to similar benefits. it will facility, gymnasium, and community facility, but without the ongoing minutes or construction cost. the purchase and sale agreement before the board of supervisors provides protection for the city. while the sale price is at below market value, there are a number of safeguards included to insure expectations of the community are met. i would like to highlight a few of those. included is a performance benchmark similar to the mark about the transactions in the area. this ensures the product is built in a timely fashion. again, mirrors the market rate of projects. the limitations on successors. the boys and girls club may not assign the bretton obligations associated with this ring without the written consent of the city.

city participation is a residential component of our list of the ship that that component were to take. the city would participate in 50% of the profits generated by that sale. similar to market rate transactions, we require the declaration of economic justice covenants, as required for all transactions in this area. also, the buyer project declaration, boys and girls club must enter into a declaration of covenants and restrictions, including a use restriction at the silly remain in community- serving facility for low income youth residing in the san francisco. after hearing the constructive comments and concerns and input, we would like to propose three amendments to the agreement that would enhance the protections to the city. the first proposed amendment would extend the use restriction i just described from 30 years to 40 years. the second amendment would include a buyback provision.

after 10 years, the city would have the right to buy back the property, at acquisition cost, should boys and girls club a fault in any way. this would be a violation of the above use restriction or failure to perform under performance benchmarks. the third amendment would be after the 40-year expiration, the city receives proceeds associate with the sale of the property. were the boys and drug club to sell the property after that use restriction expired, the city would participate in that sale. in conclusion, we believe this transaction allows for a critical needed facility and trusted city partners to further their mission in an ever that would benefit clearly from their presence. this is at no cost to the city other than forgone revenue at a below-market returns action, and the city would see no ongoing maintenance and upkeep requirement.

finally, the transaction is structured in a way that the city can ensure this facility continues to run the service and intended fashion while simultaneously containing to participate in revenue or profit generated by the site. this concludes my remarks, having to answer any questions. supervisor chu: with regard to the three amendments being proposed, would those require us to continue the items? they are not substantive? thank you. supervisor mirkarimi? supervisor mirkarimi: i do not know if this is for office or for boys and girls club themselves. when i came into office in 2005, the sector in the city had been really resource for with regard to the kinds of services that boys and girls clubs are offering. now it has grown substantially

where there is substantial change it resources. you are taking away a resource in the upper heat, the boys and girls club. i would like to hear from the city, what is the plan to compensate for the resource we are taking away from another part of the district that is now shifting to a needed portion of the city, but a portion that we have been working hard on building the portfolio of services there as well? who would like to speak to that? >> i am the president of boys and girls club san francisco. thank you for the question. i think you know this. that club in the haight does not

really serve those kids. they have been serving lower hate, western valley, since the 1960's. that is our mandate, what our mission is. to reach the kids that need us most. while there are kids the certainly made us in the haight, it is not a sizable population. there are more substantial me there in the count -- and the community that we are reaching. you know this, and other members of the budget committee know, we have been in this process going back to 2005, 2006. our club at page street is falling down around us. it was built in 1952. something needs to be done. it is not up to the standards of what boys and girls clubs operates. we set out to find a location that best serves that population of the lower haight, hayes valley, western addition. we have looked at private sites,

public sites. we have a conversations about the muni substation. we looked at the sacred heart church. that came with a bunch of complications. we looked at a property on peers and golden gate. all these properties fell through for a number of reasons, and we have a couple of people here who will speak about some of the limitations about where you cannot just take a boys and girls club and plop it down in any part of the community. there are factors about safety and where kids will go. we have a lot of strict parameters in terms of where we are looking in order to reach that population that i referred to earlier. we are always looking to be on the periphery of the community so that all kids from the community would come safely. i am glad you made the point about the other services that have come up in the western addition area. that was another constraint,

finding a location that was on top of another youth-serving organization. when hamilton was built, that became one of the anchor points in which we want to be away from as well. a couple of other points, i think members of the budget committee know boys and girls club was founded here in san francisco's south of market street on hundred 20 years ago. we reached 16,000 kids in the city. we are an important institution across the city and we are an institution that is fully committed for a long time to this city. that is one of the unique characteristics of why we are the right partner on this. the second unit characteristic is we actually want to build a youth center and we have raised money to build a youth center. we think those are some other characteristics that distinguish us. we appreciate it back a two of the members of the committee here have clubs in their district. this location is right on the

line between to provide him and supervisor mirkarimi's district. technically, it is in supervisor kim's district. you heard some of the numbers before. we expect this club house will reach up to 3500 kids a year. one of the other things i will say, and i will step away, the central nature of this club house is important. one of the things we are doing is putting our main offices in this club, if we can get this done. we would be moving from a downtown location on hawthorne street into the club. kids from all our clubhouses access our main office as well. we run a lot of different programs, including teen employment programs at our main office. for kids to be able to access that, we have to be close to public transportation. and then the central nature of other things by this.

i have asked the club house director. the central nature of this location is not only tremendous asset to the western addition, hayes valley, is an asset to the entire city because of its proximity to public transportation. supervisor mirkarimi: what is the prospect for building -- for the building that you would be moving to? >> we would be selling out location. we need this proceeds to go into this facility. this will be at least $18 million project for us. the more detail we have gone through in the past couple of days on how to make the deal more attractive to the budget committee -- is a scary proposition. $18 million is a lot of money, a long-term investment. on top of that, sustaining it for the next 14 years.

we are going to sell about location and reinvest those funds into the club at this location. supervisor mirkarimi: any idea -- there are no restrictions on that. that is a sizable parcel of land. most likely, and we are talking about housing. >> that is right. would be knocked down and rebuilt for housing. we're going to go out with a process in january. the realistic people we have talked about on the periphery have said, if you can find someone to use it for how it is built now, you can get more money rather than someone coming in to knock it down to build housing. but i agree, i think housing will be a more attractive option. supervisor chu: thank you, supervisor mirkarimi. supervisor kim? supervisor kim: in the budget analyst report, it said