their investment. there is either a payment of funds or another appear that would be subject to court commissions of the board of supervisors approval in an amount of $12.3 million, and the was negotiated based on the volume. we showed neuse the discount. relationship, and it allowed us to continue to focus on the place where they can get their reimbursement, and it becomes a significant improvement on the document you saw, which had an amendment to deal with the cost

of improving the tears. -- piers. i will cause if we want to talk about 51. >> thank you. i appreciate this movement. i am wondering if there has been in a particular assets considered moving forward. has there been any discussion of our range of assets? >> there were a lot of different assets in the document we pulled out. that includes 19, 19 and the house, and 23, so those have the same challenges as pierre 29 those, so we have looked up and down the waterfront for potential opportunities. we need to really event that,

but what we have is reflective of the basic structure, which is that the city can always choose to buy out the improvements, and that is option 1. gooas they allow us to buy it ot and not have that, that is fine. and we have another way forward, but we want to preserve the basic structure and moving ahead with the events and thinking about what is the right development that is going to make sense to all those players. >> just to be clear, in terms of the concerns raised by the committee, this condom place and -- this contemplate removing herpier 21.

support has the discretion to pay it off by cash payments, some kind of loan, or another option is to identify another source for a grant credit, but that would have to come back to the board of supervisors before we would say where that would be. >> they would have to agree to the alternate option. >> supervisor campos, i think you are on the roster. >> one of the documents indicates there is a willingness to roomier who -- to remove pier 29 so long as the cost structure is in tact, so i

am wondering what the condition is. >> this has been agreed to with the provision i just described. we wanted to make sure the functional cap remains in tact, so because the was a specifically negotiated set of options, to take pier 29 out undermines the structure. good >> was the agreement the board approved in december? >> there was a negotiation to match cost with other rights. >> i think the question is if we did not approve something that was initially added, why should we approve providing additional value for about something when

it was not even included in the original document? >> there was a legal question about the document, but i want to come back to the comment, which is this is a significant approval, but now the courts obligations are of effectively capped. their reimbursement only comes from these places, so what we are providing you with is a greater security for revenues than you had. >> the issue about whether or not there is an actual cap remains an open question, so i will get to that as the presentation continues. >> in terms of the removal, there is not a condition of the removal. we are removing it at the moment, and what we are saying is the value is going to be made

up with an option to buy out that amount or to identify it a future stream of rent credits, but that would have to come back to the board for approval i want to be very clear. the italicized languages is what has been agreed to by the authority. there are no conditions. that is what has been agreed to. >> i know this was a major item you cared about. if there are no questions on this item, why don't we move on to the next one? >> the next item is total expenditures by the court.

by defining a finite set of new reimbursement not options, we have limited obligations to find other assets, so we want to strengthen the language that describes the waterfall, so what you see is the italicized language is what has been agreed to. this so be limited exclusively to revenues derived from the following sources. we listed the ones last week. we are happy to run through those again, but the focus on our part is not limiting the authorities cost. we want to put as much money into them to make them a productive part of arlin economy. good -- part of our economy.

this has been agreed to d. supervisor campos: i appreciate the movement that has been made, but i have to say i am not satisfied in terms of whether or not we have a hard cap, and i will be on those. it is because of past experience where we have zero list of items that were supposed to be reimbursed, but there is no cap on this item. i were you have a list of items that supposedly limits to the city's liability -- i worry you have a list of items the

supposedly limits the city's liability but you have not abrogated the entire amount, so why not have a specific amount of says you cannot be reimbursed and beyond this amount demarcus items with good -- this amount? if items are really hard caps, why not have it say, this is the maximum? my fear is you are opening the door for some future disputes about the amount that could be reimbursed, but what is interesting is there is actually a specific amount you are including. the authorities has no problem talking about hard numbers when something is removed a walk in

there, so why aren't we talking about a hard, -- that they want in there, so why aren't we talking about the hard, definitive number? plexuses -- >> this is a defined number. i have a history as an attorney curios -- an attorney. by putting those specific new words in, but i would turn to the city attorney about whether this limitation would be effective in protecting the balance sheet. >> i think the question i would have is, can you guarantee there is not going to be a dispute about whether or not something is reimbursable, and do we have

an abrogation about the total cost? >> i do not think there is never a guarantee against being sued, but i do believe the structure in section 1.5, which provides the framework for reimbursement of provide what we call of functional cap, because of limits to exclusive source as the means by which the authority can be repaid. the difficulty in putting a number cap is an issue of time and future value. the authority has a way to change its infrastructure. it has up to 10 years to

complete infrastructures. as we sit here today we do not know what that number will be. >> you are saying we have a hard cap, but we do not know what live is. -- what that is. >> i want to say it is different from a hard cap. the other issue, as you noted there was a hard number. on the other hand, one of the primary sources is infrastructure district bond proceeds. the value they will be able to

derive after it has gone through an entitlement process, including further reviews and all the planning and spermicide-- and permit some re. that is the volumand value to ry the authority, and that actual amount we cannot give you a number fourr, so we are limiting back to what they build. and we can only derived that from further development as well as these other sources, and i think by limiting sources, we have provided an exclusive means, which is an effective

way of limiting the exposure. >> i have to say i appreciate the work, and from a legal standpoint, it approximates the number of a functional croap, bt if we were talking about my own personal money and i am asking what is the amount of the check i am going to write in two or three years, i do not think you said you would be able to tell me what that amount would be, and i do have a problem with that, which is one of the reasons i agree with the recommendation that we should

have a hard cap, and a hard cap is or is not, and you can get into semantics of how you calculate it, but as of today we do not know what that number is, and i think that is problematic, and even though we have a definitive list of items that is supposedly included, we are not sure what that will add up to, and i think that is a problem, and my own personal view is we owe it to the public to make sure recondition our approval with a hard cap. i think we owe that to ourselves, and the last thing you want is five or 10 years from now to have a situation where the amount is a lot larger than anyone anticipated, and how the year explain that -- how do

you explain that to the taxpayer who is going to ask you? that is why it is important to condition the approval on an actual hard cap. >> i would like to respond by saying that by limiting assets, at no time with the general fund required to cut programs. we are talking about piers 30 and 32, the amount relating to 29, and the financial tail, which is another way we can get that out of the document, so we have effectively limited the places they can go, and we have eliminated places they would not have expected it would pay into this particular transaction.

>> it ends up with resources we can tap into. you say these are the assets we can recover. that is it, so the risk is on the authority if they spend what is recoverable. supervisor kim: i am glad those questions are asked. i want to ask again, you are calling this a functional gacap. >> yes, it is a functional cab. >> could you talk about what that means? >> what it means is that it serves the same purpose as a hard cap, because it provides a bucket by which the authority will be reimbursed, and once

that is emptied the authority has no other sources under this agreement. >> just so i have some comfort, as the authorities and above and beyond their actual cost -- if the authorities to bend above and beyond their actual cost, is the city at all liable for those at additional cost set? >> -- those additional costs? >> not under this. i should say this is all the city is obligated to reimburse the authority for, but should the authority to construct a vertical development, presumably it will have an opportunity to recover some of the costs through the regular development process and the kinds of profits

it might receive from that development. >> could you repeat that? >> the city has a finite bucket, so that is as far as the city will go, but the authority itself has the ability to recover additional funds. >> they can increase the value of those assets, and if the value could increase, they could be reimbursed for additional costs. >> there is the sale of condos, but it will not be at the expense of the general fund. cracks in no way with they have an actual claim -- >> in no way would they have the authority to draw from the other sources to? >> not under this agreement.

supervisor kim: is there a cap about how much of the bond proceeds, or is it about any of those we are putting forward today their mo? >> i got this one. it is all of the net proceeds issued. >> is any and all proceeds? >> the concept is the infrastructure financing district revenues would accrue annually for a time. they would be captured under a bond issuance of the front end, and the net proceeds would be in this bucket.

there would be a collection the exceeds that because you also have to provide for coverage. it is not all, but it is the majority. >> my understanding is the funds, the dollars that come out is also depend on -- intended for other uses. is that correct, or is it for the expenses by the havana authorities raided by the event authority -- is it for the expense of the event authority. >> it is dedicated to infrastructure work. we have not planned development of these sites. there is 8664, which provides

the state's share of tax implements. those will be available to fund other facilities along the waterfront. >> i want to clarify that again. and i do actually want to talk about taking of a lot, but i will talk about five out a later point. -- talk about that at a later point your go. >> i have had numerous conversations, and it is not easy, because we have a different understanding of what an account is. we are talking about a hard asset accoucap, on where you can

draw from in an asset perspective. there were a number of us who had a concern that if there was not a cap you would be able to dip into the general fund. would it be possible to put in languages that clearly states it would never accrue to the general fund or other capital streams, i understand this language said it is exclusive, but just to make it abundantly clear, has that been considered? >> it has been considered, in part pekoebecause it could invoe city funds or pork funds.

goowe have a clear statement of what it can be. we feel that is appropriate to provide the comforts. >> and we have a place holder of $12.3 million. and your perspective is that could be general funds. goo>> in the agreement that was executed in december, 2010, there was a buyout option that could have been advantageous. the city's cost of borrowing is a lot less than the rate of a cruel -- rate of a cruel, so there may be a way to move

forward. we did not want to constrain or tie the hands of anybody from being able to take that option, because we felt it was the right thing to do to get 29 off the table but maintain the reimbursement opportunities. >> i appreciate that, but i think you are playing to concerns that while it may be advantageous, and we may be dependent on the general fund. if we work through this, we could pass legislation to undo that. if we were to say this obligation would not ever dip into the general fund, and if we wanted to do that, we could actually do the. good >> absolutely. i am talking about negotiating an agreement. certainly the board can make it part of its policy. this is how we will treat it going forward.

>> i am wondering can we put that into the resolution. >> i see the point you are making, and i understand the concerns, but i feel like what we would be doing if we took that action, we are playing to the perception we might take into the general fund, when it may be advantageous to issue debt because our credit is better than the port on its own, so it is not necessarily that we are dipping into the general fund to cut sources. it is clear we only have a limited number of assets. if we made an amendment, it is really to solve and optics at issue rather than it is in the best interest of the city. we may want to do oaa cop.

i am not sure it is the best thing to solve an optical issue. >> i understand, and i could see maybe there is a circumstance in which this would be possible, but i think there are members of the public who worry that without stronger language that reflects more strongly, who you're talking about general fund to dollars, and i also understand from an event perspective there issue as well. i want to understand why we cannot clarify with a bit more certainty numbers we already know have been costed out. >> one way we could get to this, if it is to put in which we do not want to give to the general fund, that can put in, but unless we can say it is to

our advantage to do so. something like that that it is financially better for us to do that. >> supervisors, council brought to my attention the existing ndda, in no event can they comply the city to use the port fund to repay other indebtedness. limitations will not apply to the port of the city to use other sources of funds for any reimbursable work, so i think you have the authority to determine how this gets done going forward. i think this gives you the flexibility. >> i know mr. barclay's an audience -- in the audience, and

i know there would be issues about why it would be challenging to place a numerical cap, given that we have provided numbers that lay out the value. could you explain again why would be problematic to do this? >> i am a director of the america's cup authority, anteand what i will do is refer back to the board supervisors meeting held on the 14th of december, 2010, which i understand the account was a 11-0 in favor of the documents before the board. i understand there are six of those members on the current board. the foundati