what is significant is, in 2005, 75% of our portfolio was in silicon valley, i the south of san francisco. so there is definitely undisputed the migration of tech companies to san francisco, and we want to support that. some of the company that i am an investor in that will lead the charge in san francisco, twitter, ising guy, jawbone, eventbrite, trulia, and google. approval has a large office in san francisco. we think the tech community in san francisco needs to finally get active. ed lee, the minute he stepped into office, the two significant things for the tech community, he got twitter to stay in san francisco, with the help of

david chiu, and we got rid of the private company's stock option tax. noticing that, i said, we need ed lee to go another four years. warren and i had a vociferous meeting with the mayor on july 12 to urge him to run. if he ran, the tech community would support him. what you are seeing today is just the initial launch of the activities where the tech community will organize and partner with the city of san francisco. one week from today, the tech community will announce what it is going to do, in an organized fashion, to support what is happening in san francisco in the city, and with the efforts that code for america isn't leading. we are truly going to bring had

a tech culture to san francisco. it will be very exciting. san francisco is lucky to have a code for america, ed lee, and especially our new chief innovation officer, jay knapf, who will speak now. >> thank you, mayor for the opportunity to serve as the chief innovation officer in the city. in my role, i plan on strengthening the partnership with our technology community and city hall to rediscover the digital age. we have discovered so much through our civic hack-a-thons and other things that we have done. this is a great example of harnessing the on deprenyl spirit in the city and realizing the potential of that, serving in the red better, making it more lean, efficient, and more responsive. i also want to thank the san

francisco department of technology. they have incubated innovation. i have been working with the city for five years and they have done a tremendous amount. i look forward to continue the partnership with the department of technology to bring innovation to the forefront in san francisco. thank you. >> i will try to say something that has not already been said. thank you all for coming. similar to david, i will say, i come from the private sector. when i came to the city, the question i got most was how do we made -- make government more exciting, let the private sector? we all work for tech companies or business firms, so how can we bring all that excitement into government? to have a board and mayor that recognizes technology in the community as an unborn aspect

really revolutionizes government. really looking forward to the next four years, working with mayor lee, the tax community, ron. we are really at the cost of some fantastic things. in the last year, we have lots mobile -- launched mobile apps where people can watch online, at interact with their devices. we have started to partner with other cities and taking what we are doing here and spreading across the country. this will only heighten our success. if we can use san francisco as a hub of where people can see how government is innovative, and they look to us as an example -- we have an expo coming up in a october. people from all over the world will be coming to see how we have innovative government and will be looking for leadership. i just want to encourage

everyone to stay tuned. a i knowron will be making some and not -- i know ron will be making some announcements in the next week. i look forward to working with everybody in the future. >> what are hack-a-thons? >> the hacker culture is really about creating, rapidly prototyping solutions. often, it is equated to applications and software, but during the summer, we had a partnership, and we expanded that notion by having people do thought experiments, by creating games, creating new ways of doing things. it is about innovation in general. it is not just technology and packing technology. it is more about getting a bunch

of people, in a diverse community together, with people who have needs. in this case, the city. we have issues and challenges we face, and caring people who are problem-solving oriented. if we tear those two groups of people together, some amazing things have come up. we have had that over five and a people over this past year -- 500 people over the past year, over 10,000 hours of civic engagement, and nearly 30 application that have been developed. code for america, what they are doing, is taking it to the next level, where we take these ideas and substantiate new business, and drive job growth, and disrupt government. you have seen a transformation in the consumer space. we have not seen a transformation in government. there is no reason why we cannot do that. >> problem solving.

what is on the top of your priority list? how this code of america going to help you in that? >> we have got a lot of problems, obviously. they get worse every time i listen to what the state is going to do with their budget, certainly, with the fed's are cutting off. i have a whole list. muni comes to mind, for example. all of their challenges. some of the easiest examples are, for example, the public says, i cannot find a taxi. one of the projects we want to put forward and an accelerated way is how we are preparing for the america's cup. we have over 500,000 people coming on a daily basis for that event. you are going to hear, i cannot find a taxi, or you will hear, i

found a taxi through this new application. i would rather hear the last one. that will be one of the projects that david and i will agree on. there will be a lot of people in his district as well to say, how can we get good transportation, to get people where they want to go, to the waterfront? ac34, getting taxis and other types of transportation modes at their highest level of participation for that event, will be one of the projects that we will put forward by the way. i want that to be of use for the public. maybe things like -- do our homeless people on the streets -- do they have the best information at hand about where they available shelters are immediately when they encounter someone on the street?

can they get wraparound services right away without having to make three or four phone calls and then have the person say, i am not interested? those other kinds of things that will be hacked out. hopefully, our practices today will be disrupted. hack-a-thon and destruction have negative connotations. today, we are embracing those as positive ideas. -- disruption have negative connotations. we have to change government, we have to change the way we think. i have been thinking through the night. it is much less about technology but the way that we think. i need to disrupt the way we have been thinking and start innovating our way out of this. i could sit back and cry about what jerry brown's budget will

present to us, or what obama cannot do in this new administration, the things that are going to go on. or i could say, i am going to work with the most innovative part of our society, people who want to help the government to better. we have really positive things to do and be positive about the way we run government. that is what i want to get to. i know the board of supervisors want to get to that as well. we need to find solutions, and this is a way to invite people who are interested in doing it. >> [inaudible] if it would actually create jobs, it would get things done. >> i would say, for example, when small businesses complain there are a myriad of permits and fees and all kinds of applications that are not all in one place. we will take a look at that.

it is even the startup companies that ron represents, it is a myriad of application they are facing. can we have one place, repeated things that come at us every few months that our new that we did not know about that we can discover? human rights certification process, the small business commission, or the tax office. can we put all that together in one package and have a small business say, i want to get started in san francisco in an easy way. can we have all accessible and be done with in a one effort shop? that will bring us better businesses, and they will pay their taxes and fees appropriately. >> [inaudible] why did it take a different process like this to actually make something happen? >> i know it has not emanated from the mayor's office.

i have to admit that. that is what john and i talked about. it has not been emanating from the mayor's office, and we wanted that to happen. it has been distributed within dt and other departments. if you volunteer, you want to do it, if it is in your comfort zone, you take it up. i think we need to get out of our comfort zone, so that is why i brought it into the mayor's office to say, this is how i get my 17-point jump plan done. this is part of that effort. and this is also to honor the technology sector and ask, how can we innovate government a bit better? [applause] thank you, everybody.

supervisor chu: welcome to the regular meeting of the budget and finance committee. i am joined by supervisor avalos and supervisor kim. our court today is victor young. mr. young, you have any announcements? >> please turn off all cell phones.

if you wish to speak during public comment, please provide a card. items approved today will appear on the agenda for the board of supervisors. item number one, resolution authorizing the exercise of a five-year option to extend the lease of space at 1740 folsom street for the share of -- sheriff's department. supervisor chu: thank you. >> ok. good afternoon. i and the acting director of real estate, i am joined by maureen gannon.

the property before you under lease is 1740 folsom. i have on the overhead a shot of the property on folsom. with parking adjacent. you can see where it is just south of the freeway. a look of the configuration of the property, because of the unique nature, you concede the frontage where the building is and the parking that lies in the long dated portion of the -- elongated portion of the l. this is a five-year lease extension for the property of the shareeriff's department. the current term expires in june

of 2012. the current rate paid is $23 per square foot per year. everything is delivered with that raged except for electricity. the new rates that we have negotiated is $25.18 per square foot. that escalates $1 per square foot per year for the remainder of the lease. in comparison to the market, here is a quick chart on the overhead for you. you concede that this compares favorably with those in the area. some of which are probably better class office buildings. it is a clear indication of a very willing landlord to work with us on the terms and conditions of the lease. supervisor chu: in terms of the

document, which could not see it really. could you articulate the comparison? >> collected 1550 bryant, to hundred make utah, and the fox plaza that is not far away. in terms of the office uses, you could see we are in the upper 20s and upper 30s per square foot per year. again, very favorable to become parables -- the comparables. lastly, i want to mention what we are doing out of the property. at the sheriff's department conducts training for defensive tactics, policy and procedure training. this property serves as the primary department operating procedure, so it has in the emergency rule, and the -- so it has an emergency role.

it serves that purpose very well. additionally, there are standards for training and correction done by annually out of this property. the property is just over 18,000 square feet. there was a typographical error in the -- ithe correct number does not affect the base rate or the terms in front of you today for consideration. we are available for any questions you might have about the property. supervisor chu: in terms of the comparables, were they inclusive of utilities? >> that is an apples to apples comparison. yes. supervisor chu: why don't we go

to the budget analyst report. >> on page 3 of the report, we point out that it is shown in the table the annual rent under the proposed lease option, it would be $25.18 a year, that represents an increase of $41,119 from the current rent of $23 a square foot. we also point out that if you look at the table on page 3, the cost of the rent and utilities would be 2 million over the

five-year period. supervisor chu: thank you. why don't we open this item up for public comment. whether any members of the public that wish to speak on item number one? >> good afternoon, budget and finance. ♪ the sheriff time, give it the dime miracles made real on lonely nights, they know just how you feel when the budget sings, i forget everything ♪ ♪ the money you bring, yeah when the budget sings ♪ supervisor chu: thank you. >> good afternoon, and i have

lived there for 59 years. i like to speak in favor of this resolution. i think it is necessary to show support for the sheriff's department. i noted he had a big smile on his face of this afternoon. i think that keeping this building is good for the citizens because we know that the sheriff's department will continue to operate efficiently. i of the budget analyst mentioned of the increase was 9%. i am wondering, given the status of how things go, it seems a bit high. as he says, it is a unique building 80 can't quibble over every detail. i think it is a noteworthy thing in the department's needs all

the support it can get, especially these days. supervisor chu: are there other members of the public that wish to speak on item number one? supervisor kim: thank you. this is just a question in regard to the budget analyst report to the real estate. just a larger question, i know that it did not make sense for us to look out purchasing a small or medium-sized building. what is the policy, what do we look at when determining how the purchase makes more sense? we know that we are going to have to continue for this type of use. >> in 2006-2007, when the first increase in rent was about to come into play, we did have significant discussions with the

owner about possibly buying this asset. when we compare those numbers of debt service as well as the existing expenses, the city would bear the landlord -- and the numbers did not equate to a point where a purchase made sense. continuing to lease made sense at that time. we maintained purchase prices at about $6 million at that time. the rent has escalated the little bit since then. it is not necessarily on the market, and it would be a little bit higher. those numbers are about the same point where we are at a break- even spot. it doesn't take into account what we need the lookout in terms of capital reserve. a 50-year-old building here. it means we should be setting aside adequate funding for rentals and placements of major systems within the building.

we have to look at it as a comparison to leasing. i would also like to know too that the reason for that large increase in the first year is because of the unique nature of the 10-year agreement that had a five-year increase. we are paying the same rate today in 2012 that we were paying in 2007. that is why the first year looks extreme. his is a catch up over five years. we did fairly well. supervisor kim: because we do have surplus property, and l. not all of the buildings are appropriate for this use, but was that export as well? >> yes, we have done, i think, a pretty good job. there are a few surplus properties. nothing of the size and scale, and not of the robust nature the

concerns the department operating center. supervisor chu: the item is before us. supervisor avalos: motion to approve with recommendation. supervisor chu: we will do that without objection. >> can i make clerical corrections that they mentioned? supervisor chu: will you be requiring additional animation from the department? not just changing the number -- >> just changing the number. item two, authorizing the general manager to execute and limit the architectural engineering design service agreement to the new san francisco public utilities project located at 525 golden gate avenue.

supervisor chu: we have representatives from dpw as well as puc. >> good afternoon, i'm with the project manager from dpw on behalf of the public utilities commission. the item before you, this is an exciting building that embodies the city posed a great initiative and the commitment to those goals. it would be one of the greatest government buildings and will set an example for others to follow. we're already seeing immense interest by both public and private sectors as we are approaching the completion of the project. i am happy to report the

building is expected to be completed in june, ahead of schedule. with the recommendation for approval, i will be glad answer any questions you have regarding this item. the joint-venture contract will be funded in the project's contingency funds. the project budget will not change due to this request. i am available for any questions you might have. supervisor chu: supervisor kim? supervisor kim: can you just go over the increases? what the increase will cover? >> design changes implemented during the design phase and construction. and also the number of fte's required for the administration face. supervisor kim: can you explain why that needs to take place?

why we need to make design changes to the improved and biological waste water technologies? >> i will address home of the design side and the construction. -- but both the design side and the construction. we were introduced to what was called a living machine, essentially of biological wetlands system that treats water. given the core services are to provide power, water, and waste water, we thought this would be an important example to incorporate into the project. it is essentially three planters that use the wetland system. there were other changes that were required during the design as it was progressing, and construction have started about halfway through the design,

implementing the delivery system, so there were several design changes the acquired -- required adjustment. not knowing how complex this project was going to be, including the added features, it required a much more people than we had anticipated. supervisor kim: how is it that this was not anticipated? >> this is one of the most complex high-rises in the country. we saw some complexity, but not near to the level it was on the project. supervisor kim: taking on a project as complicated -- it has been an issue on the board previously, one of my