director kim: good morning and welcome to the transbay joint powers authority meeting of january 12. >> [roll call] madame chair, you have a quorum. director kim: please call item no. 3. >> communications. i know of none. >director kim: please call item

no. 4. >> director new and old business. director kim: item 5? >> executive director's report. >> the first meeting of every year we present to the public the milestone we accomplished in the previous year and we plan to do in the current year. pick 4 we get to that, i want to announce we have put out a number of applications for our cac. we have sent notices to all of the hispanic, chinese, filipinos, vietnamese -- all of the ethnic presses, chambers of commerce in san francisco. i wanted to let the board know that we e-mail debt to the board as well, in case you know anyone that you would like to recommend. i also want to give the board adopted and status on redevelopment. in december of last year, the

california supreme court issued a ruling on ab 26. i have asked andrew shorts to prepare something on that. >> good morning, director. outside counsel for the tjpa. the problem with redevelopment began when the state's obligation under proposition 98, to backfill money for schools, a rose -- arose. the state required redevelopment and it -- agencies repay some other tax increment to the state. the redevelopment agencies and city responded with proposition 22 withich prevented the state from taking tax increments.

the governor's solution to the problem was to abolish redevelopment in order to get access to that money to close a budget gap for the 2011-2012 budget year. in order to do that, the legislature passed a be 26 and ab 27. ab 26 eliminated redevelopment, require that they liquidate their assets, for a successor agencies to pay down all of the enforceable obligations of redevelopment agencies, but otherwise, to terminate redevelopment as we know it. in conjunction, the legislature passed a be 27, which allowed them to continue for some payments of the tax increment in redevelopment areas to close the budget gap that the governor

required. the redevelopment agencies and cities challenged proposition 26 and 27 as the violating proposition 22, and on the basis of the other arguments. on december 29, the supreme court upheld proposition 26 and struck down proposition 27 passed by letting -- ab 27 on the ground that it violated proposition 22. the redevelopment agencies are to dissolve as of february 1 of this year. with respect to the transbay project, we feel we are an enforceable obligation, as it is defined in ab 26. because of the fact that this

project is under construction and is based on a financial plan that requires tax increments that this project is essential to grandfathered under the language of ab 26. we feel we have a strong case that the tax increment from the state transfer parcels from the redevelopment plan continues to flow to this project. >> the mayor and supervisor cohen recently introduced a resolution regarding the next stops. specifically, as it relates to the three projects in san francisco, mission bay, hunters point, transbay. the city is working on constituting the successor agency so that they can start

the work of filling the shoes of the redevelopment agency. >> yes, a successor agency that would be controlled by an oversight board, seven members. the mayor has four appointments to the oversight board. community colleges has an appointment. the san francisco unified school district has an appointment, and bart has an appointment. >> any questions from directors? director reiskin: thanks for the update. a couple of times, you used the phrase "we feel." we feel it will be grandfathered. i suppose that constitutes a project that is already under way and would not be captured here. who, ultimately, makes that determination? >> the state direction -- director of finance is the

decision maker as to what constitutes an enforceable obligation under ab 26. the process is that the successor agency will submit a list of recognized, enforceable obligations to state. the successor agency for san francisco intends to submit. the transbay project has an enforceable obligation. the director of finance could object to that. in which case, there could be a dispute, but we do not expect that. director reiskin: do we know what the time line for that would be? >> i think mike rizzo is here and can address the time line. the schedule to recognize obligations need to be submitted in february? before february. then the director of finance, i

think, has a certain amount of time -- we do not know how long the time line is. the director of finance will be receiving a list of recognize the obligations from hundreds of redevelopment agencies, so we expect that decision will take some time. director reiskin: it is a deemed approved situation where if they do not rule it is an enforceable obligation within days, it is deemed to be -- >> if there is no objection. the statute requires them to object. >> any other questions? just for the sake of the public, if you could go over coming in detail, in terms of how the state is defining enforceable obligation, and why

you think they have a strong case to be accepted by the state. >> the state statute, ab 26, defines enforceable obligations as bonds, outstanding bonds, and other debts of the agency, and other enforceable obligations. with the transbay project, one of the best cases for an enforceable obligation, because the tax increment for the transfer, state transfer parcels, is supposed -- has been pledged to the transbay project by the agency under a pledge agreement. we have a formal agreement that obliges a redevelopment agency to make those payments over to the transbay project. in addition to that pledge agreement, we have incurred

numerous obligations based on that pledge, including a tipia loan from the federal government worth $7 million. it demolished the transbay terminal. it built a temporary terminal and started construction of the transit center project. we think we have a very solid case, that that is an enforceable obligation, under any definition. director kim: director ortiz? director ortiz: what happens if things do not go as planned. what is the hit for this project? >> maybe i can answer that. i was going to respond to care person -- chairperson kim's question. the intent of 26 -- there were a

number of issues. the project center was intended to be shut down as part of this, not public projects in construction, like ours. some of our union friends are here today. we have thousands of people in construction now. we are not a golf course or shopping mall, which was one of the issues raised regarding problems of redevelopment. that is point number one. like hunters point, which has received $800 million to clean up the site, we're getting over $400 million from the federal government for our project, substantial commitments, that we would want to preserve for continuing economic improvement and betterment for the entire bay area counties. i did want to add that to the response. to your question, director

ortiz, there are three funding issues that are affected as a result of the california supreme court ruling. one affects affordable housing. it is unclear if we will meet the 35% mandate. that is something the city is working on very closely with us on. but if we cannot meet that, there will not be the same level of affordable housing in the neighborhood. the other component was the tax increment we were going to use to help build the infrastructure to support the new neighborhood that we are building. we are going to be looking at a variety of other funding sources. we have started to talk with the city staff from redevelopment about that. in the event that we do not generate all the funding for that, obviously, that is a cost that will have to go to the developers. with respect to the third

component, the tax increment that goes to build the transbay transit center itself, obviously, if we did not have that money, we would have to find another way to fill it, but we do not consider that an issue, considering the commitments made by the federal government and state of california, and by the fact that we are in construction. director kim: thank you, directors. if there are no more questions -- >> thank you, directors. if there are no more questions, i will ask brian to come up. he will be followed up by sarah to present what we expect for 2012. you will see the commitment of the state of california, the federal government has made towards the project. there is really no turning back, at this point. brian, thank you. >> good morning, directors. principal engineer of the tjpa.

the agenda is to tell you what we have accomplished in this past year, where we are right now, and what we plan to do in the coming year. in 2011, we had a one-year successful operation at the bus terminal. we made improvements as the year went on, including restroom does of these, additional benches. -- facilities, additional benches. we recently got an award for transportation project of the year. we built something that works and people are happy to use. the demolition project was very successful. over 55,000 hours with no safety accidents, which says a lot for demolition. we also acquired, with the city

and eminent domain, additional properties to finish out the west end, demolished under the same contract. this project is now complete and closed up. utility relocation, substantial completion of four of the contracts already. that means the streets are back open for use. phase one of private utility relocation on the cross streets, specifically, first and fremont street, have been completed. the public utility relocation has been completed, so we can do all the excavation. on going, there are two contracts, one on mission street for the until water system. it does not affect our construction, but is a commitment we have. again, a sewer location on

howard street, also outside of the plan of the excavation. transit center project during this year, the design has gone from the 50% level, delivered in february, to 100%, where we are currently in final plans, checking for below-grade concrete work. we are at 95% on the balance of the work, the structure of bubp grade. -- above grade. we have an up to schedule, at this point, planned for face to work. -- plan for phase 2 work. we have a series