this was a consent item and we found a mistake in the policy today. the resolution that you received a restricted the sale of single use plastic bottles that contained carbonated water or soda is or sports drinks and intent was to have water only put to the exemption was those that had the soda and carbonated water. the national park service developed a similar ban in the grand canyon.

with that, i will take any questions that you have. >> we're thrilled about the policy. thank you for that. we appreciate the question. this is more practical for people. i want to take this opportunity to note that there are these reusable baggies that can be clipped to belt loops or whatever and it could include the port logo and make that available to people. it would be very easy for people to carry these new versions of renewable bottles. >> not to try to push the city further about why don't we to say the prohibition only applies to single use plastic bottles

that are used for water? >> i think we might have had that. there was a request for clarification. >> i can see someone else figuring out some other beverage that somehow is excluded or included or whatever. >> you were saying that you would take that correction. >> so moved. >> could you restate it for non carbonated water? >> know. this prohibition only applies to single use plastic bottles used for water. >> you will get into the issue of carbonated versus non carbonated water i would make a

friendly amendment that it is bottles that used for non carbonated water. does that make sense? >> it does. not to be hasty or complicate it further but there are flavored waters out there as well. >> what are we planning? >> are you planning and flavored water? >> the intent is that any bottle that can be replaced with sap what would be prohibited. >> should we accept that motion? >> non fled, non carbonated water. >> i am comfortable with that. >> this applies only to single use plastic bottles that are used for non carbonated or

flavored water. >> is there second? >> i could. >> any discussion further? >> water is the primary hearing. in terms of how this continues to develop because there are other plastic bottles, is there any further step in to how this could evolve? >> with respect to bottles, not at the moment because of the issues are around selling and profiting from other products that are readily available. you should have a reasonable alternative for water. you currently don't have a reasonable alternative for these other products.

there has been some consideration and there are folks out there that would like to see an absolute ban regardless of size can tell -- regardless of size. >> i would note that the commissioner from the environment, would you like to share any thoughts with us? >> i'm prepared to go to public comments of there are no speakers. >> >> good afternoon, commissioners. i am very pleased to support of

this advanced policy. i was very excited to see in it and i am appreciative of all of the work of the staff and the department of the environment staff and i support of the amended version. we are looking at a policy that applies to 15,000 or bigger. the potential for 5000 people, 5000 balloons released, 5000 single serve bottles being distributed. even if every one of those and it's up at the appropriate -- ends up in the appropriate bin, we still have the shipping, the

manufacturer. we have all of these emissions to bring the water to the site. i don't want to delay this at all. i hope that it stays on your agenda very very soon and we will reduce the number from 5000 possibly down to zero for things like balloons. we still need to deal with hydration but there are more and more companies. many event organizers have voluntarily provided water at their events. that is a direction that i hope that we can move in sooner rather than later. >> is to any other public comment? what shall we have a motion to

approve the policy? the resolution has carried. >> item 9 a, informational presentation of the operating budget for fiscal years 2012-13. >> good afternoon. i am joined by the budget manager as well as the financial analysts. our fiscal officer is also here. as is practiced, we start with the annual operating budget with the review. so, you are able to review the

details, ask questions, provide input and when we return on the 28 for your final review and recommendation of the budget, many of you are familiar with the process but for the benefit of the public and for new members, how the process works, once you approve the budget, we transmit this to the city's comptroller penn to the city comptroller balances the budget and it goes to the mayor's budget office for review and in about may, they transfer over to the board of supervisors. the board of supervisors has one to two hearings whereby they do additional changes to the budget and it is finally adopted in july and then we come back and report on any changes. this time, where you have had the two yearbudget, this is a true two-year budget. what you approve will stand.

we have enjoyed to the two year budget process because it has allowed us to plan. we have also enjoyed the flexibility of coming back the next year and making changes. this is new for us so we will be treating the budget presentation today, looking at a lot of changes from prior commission action because next year we will just come with a supplemental. that is to reflect changes above 5% from projected expenditures and revenues. it will be an incremental look and we will be using a supplemental appropriation for incremental changes. one of the reasons the city is going to the fix the budget cycle is because they want to turn the attention to the five- year plan. to the city and commissions will look at their financial plan and

will make decisions to identify trends and resolutions, reverse negative trends and link the forecast to the budget >> to the business and operating parties in the organization. last year, we did participate and we created a financial plan and we're planning to update that five-year look. while it is not an official year to update that forecast, it will be useful for you to see the trends that this first budget leads to four years 3, 4, 5. i would like to note that the disillusionment of the redevelopment agency, there might be budget changes that will be implemented and it will take place in the mayor's review of the budget presented to the board in may. i don't have a sense for you of what impact this will have to our budget but we will be coming

back to report on any impact. if we could go to the other side. i want to step back to the five- year that we produce last year because there are several things that some policies underlined the two-year budget that reflect what we have identified and that five-year trend. it just remind you that they showed operating deficits growing in year 3, 4, 5 and a decrease in contribution to our capital program. basically as a result of our revenues not growing as fast as our expenditures which is very similar to the overall citywide trend. in our forecast and throughout our organizations, we have a lot of constraints in our financials. we have diversity of revenue and business lines and that carried

us through the recession and has really provided a relatively constant source of revenues for us. you also adopted under the leadership of the director, some very good financial policies and the rating agencies comment on these policies and we have seen results from that and that includes the 15% operating reserve and the debt service coverage, never below two times revenues. we also have some weaknesses. we have some limited sources for capital and we also have growing costs on the personnel side which we cannot control and also growing costs and services above the department. you look closely at the budget for services and recognizing the city's financial crisis, we have moved to hiring at it a promise to perform the work that we would of other-otherwise performed through consulting

contracts. we cut a million dollars from the budget last fiscal year. i wanted to demonstrate the trend that our five-year that was produced. this related to our allocation to our capital budget and debt you can see a decline of 87% in the sources for capital over five years. this ends in a fiscal year 15-16 budget which is less than what would meet our basic needs. >> this is what you presented last year. >> we will be coming back for a renewal of these numbers. i already know they are better. looking at this deficit, we wanted to shift the trend. we did a couple of things.

one, we wanted to better estimate revenues and be slightly more optimistic. the current year were showing surpluses in revenues over budget. we believe the turnaround is taking some hold. we wanted to develop a policy for you all to adopt like the other strong financial policies you have adopted to set aside surplus revenues for capital to designate it specifically for capital city can make the trade- off between operating expenses and capital. i will be coming back on the 28 for those details. we are seeing that the improved financial forecast hold in the operating budget costs and adopting a policy and we can really reverse this trend.

in terms of strategies for the improvements, will be talking about that on the 28 and we will make this trade routes between operating and capital funding to enter this commission has done an excellent job in controlling operating costs. i have not seen a department that has so few over a long horizon. this is already something that is a practice but just to institutionalize that, also it continually identifies the most efficient uses of our limited support resources for capital and always figuring out how to maintain or enhance revenue through capital improvements. again, in sharing that your financial policies are maintained and relying on the city wide efforts to control labor costs. we had the pension reform that was beneficial but we're hoping

to continue to see a citywide effort to control those costs and always to tighten up on and on personal expenditures. we are about to go through the numbers and talk through more of the details but i do want to remind everyone that this next two years is a very busy time. we are quite full and subscribed on the near-term needs to deliver for the city wide efforts for the america's cup and some capital projects at pier 27. this is a time where we need a plan for the unplanned. should we have unanticipated

cost increases? despite all the need, we are meeting our reserves and despite the need to plan for the unplanned, we have done quite a good job in holding caused it to these principles. with that, i will turn it over to making to go over the numbers. good afternoon, commissioners. >> i want to touch on a couple

of things we have focused on where but in this budget together and really first of all we looked at the actuals and we tried to project based on those numbers what we really needed in our operating budget tend to be news -- we used that as a guide line that keeps the operating costs pretty flat. we also recognize revenues based on trends that we saw in 10-11. with trying to take measures, we were able to continue to meet our operating needs by adding new positions. what we're looking like is that

we see we will keep needing to have to make operating capital tradeoffs, particularly with the goal of potentially getting to 20 million of an annual investment capital at some point. this is just to get you ready for the next meeting. i will be covering two things in my portions of the presentation. those of the budget details and trends. the staff report focuses on comparing the proposed 12-13 budget would what you approved last year. i will give you a reminder of what it was that you approved last year and then go through the 12-13 proposed budget details. then i will go over the overall trend to see how these fit into what we are seeing. first of all, what happened in

the budget last year? compared to fiscal year 11-12, it was reduced by $3.1 million. you will see that our revenues grew slightly, by about $500,000. overall, we had to take a reduction. that's partly because of their capital funding, we had appropriated funds from ones that were not performing. despite the reduction in the overall budget, you improve and increase in the salaries and fringe and the drivers behind that were labor concessions and proposition c.

the impact was a sharp decline in capital. that is what triggered -- we need to start trading this around. now going to go into how the proposed budget compares with the approved budget that was passed. this is 95 $26 million, an increase over last year. that's pretty significant in growth and the balkans in revenue. -- the bulk of it is in revenue. we need to show that in the budget. we will see that parking revenue grew by $1.5 million, partly through expansion of meters and enforcement of the meters along

the waterfront. commercial and industrial read group but $2.4 million. we see increases in those revenues and we want to make sure we were capturing it in the budget so that when we were looking in the long term, we could really see revenues are keeping up with the expenditures better than we expected. maritime as an exciting story. we're all invested in the cruise terminal and making sure that industry is sustained. already, our maritime division is reflecting 44% growth in passenger volume through san francisco in 2012 and 13. that has added benefit of about a million dollars to that division. another key story is fund balance. fund balance is critical to our capital program. i don't know what each of your

individual backgrounds are in understanding this funding, but it is replenished every year by operating a surplus. it is critical for supporting our operating reserves and capital projects. we were able to assume another $3.5 million in this balance and it has an impact to the capital spending. the operating budget increase also, along to help ease up some of those new sources of funds. $2.9 million worth of growth, at $2 million is taken up by the america's cup project. staff recognizes we have potential vulnerability there and we wanted to make sure we had funds in place if we were called upon to use them. staffing stays steady. we added positions to the

budget and substituted of budget positions. they need to be supported by our operating revenue. by adding those positions, we would have seen an increase in salaries, but because of proposition see, we benefit from that. the capital budget is where we are excited to see that growth. we have all $11.9 million budgeted for capital projects. not as much as we have 411-12. we are budgeting $2.9 million to operate -- to operating costs. this is the policy coming into action. this is the action of putting funds away for future capital. fiscal year 1314 -- 13-14, we

increase the budget to 92 million, supported by additional revenue growth. parking, commercial, industrial, rent and cruise continues to seek growth. all that is tied to what we are seeing in actual income in the current year. fund balance remains steady. what you saw last year is we had a robust fund balance and we thought it would have to decline for 12-13, but by putting designated funds away we're helping to sustain that level and keep pounding at a more constant level. additionally, we are doing well -- through a six month report,

the port that the comptroller just issued, the port is projecting a year-end surplus that is quite healthy and we are putting that in the budget. with that the overview, want to give you a sense of how the numbers tie in to the trends we're seeing. i keep referring back to 10-11 and refer to the current year and that's what i want to show you and these charts and graphs. overall, i am comparing fiscal year 13-14 with fiscal year 10- 11. over those four fiscal years, what are the trends we are seeing? in fiscal year 10-11, we have revenue of $73.6 million. in fiscal year 13-14, we have budgeted 70.

-- [inaudible] what you will see is we have particular areas of growth. commercial industrial rent as a growth of 7% and a maritime is starting to become healthier. 12-13 and 13-14 are reflected in the budget and they are a continuation of what we obscene operationally at the port. with the expenditures, it's a different story. we are seeing steeper growth and what we see in revenues. you can see in fiscal year 10- 11, we only spend $56.9 million. quite a lot of growth. as you can see, the majority is

in salaries and fringe. some of the cost is from new positions. the 10-11 budget includes labor concessions that have not been assumed for fiscal year 13-14. by the time we get through this budget process, we will likely have some savings. a growing retirement costs. that is the overview of those budget details than happy to answer any questions you have. thinking ahead, we will be introducing the budget to the mayor's office on tuesday. we will then come back to you for final approval after that. that does not hold you