. >> i am not sure it will be adopted one-for-one. we have the exact same race sourcing. we're engaged in a detailed incident command planning process with partners at the park service and partners at muni and the coast guard to make sure not only do we have everything covered but we're doing it in a way that is working. is it -- wasting expenditures are leaving a gap in our coverage. all that has to come down. that allows us to bring these adaptive management techniques forward. and weighed more by his -- will have to do that on a real-time basis. one of the things i want to note is -- this is a long duration of that. there will be peaks and valleys. some weekends with great weather and great racing and a maximum amount of people out on the waterfront. some weekdays with a lower profile, the much then the actor

-- after that. we have to make sure how we spot these coming forward and how we will make sure we spend our resources wisely. supervisor kim: thank you. a question for the port. in terms of spectators. one question that has been asked is will people come to the event? well it be like san diego? we do not have a crystal ball, from your experience and accordance with activities. what are your thoughts about spectators? >> if you do not have an opportunity to get down to the waterfront on a saturday, i would encourage you to do so. as one of most activated places because we have that promenade which acts as an ongoing street fair. as we continue to populate the peers -- before the events in

2013 we do have more that festival field. whenever there is something, some activity on the bay, whether it is the more grandiose queen mary ii coming in in 2006 and the population turned out in droves to see that or whether it is one of the ships coming out of dry dog -- dock. people are engaged with what is going on. different from san diego, they do not have a kind of promenade or viewing platform and spectacle that expands the links of the embarcadero. as we -- one of our mandates has been to supervise public access around the perimeter. we're one of the only waterfronts we can get that close to the water over and over again. this places attract people to

enjoy the waterfront when there is no activity. when there are vessels racing at the speeds they're supposed to race at, everyone will be coming out to see one tip over. that garnered a lot of attention and has been repeated in the world series -- cities. there is a lot of excitement. we're doing better. we have tenants who are planning events to correspond with the events of the america's cup to bring in their international investors. san francisco fine arts museums are planning special exhibits. we now that the international arts festival is fund raising to try to do something. we're celebrating the 450th anniversary as the leadoff to that and we are ending with the

opening of the bay bridge. 2013 is a year unlike any waterfront has seen and i am looking forward to a. supervisor kim: do you want to welcome supervisor campos? >>supervisor campos: thank you. just having to get a little more explanation. the assumption behind the revenue. i'm not sure you talked about that the you can go deeper into how you came to where the assumptions that provide these numbers? >> they were taken from a november 2010 budget analyst report that made assumptions about how tax revenues will be collected. it was based on the bacon report. >> where are split between the general fund and many to make sure this was meted out the wrong -- right way. that was added by their analysis.

supervisor campos: thank you. >> a question for the budget analyst? on the revenue assumptions that were just provided. do you stand by these numbers? >> these numbers developed two years ago. for a report were provided on the feasibility. we look at them and worked with them as a benchmark. if it is not updated, it would take a review on our part to vet them at this point. >> there was detail about the expense projections. have you had a chance to look at those? >> i looked at those at it -- as it was provided right now. i cannot comment on them specifically. i know when i first spoke with mr. martin when we're playing

the -- playing that. how those costs are broken out, i would not able to give information. >> thank you. i know we have to work on the assumption of revenues. i have been looking at budgets now for -- before when i was a legislative aide and supervisor for three years, form -- for years almost. the projections are never right. we just have a six-month report. we have a surplus. over what we have projected. we have been under or over. i am not clear -- i could stand by it from what i am singer. the trend we have now is things are looking up in the economy. we have increased sales tax and a hotel tax and parking.

we had a six month report that reports that. we could see that -- we could capture what that trend is but it is not related to the america's cup. these are things that we do not have a certainty about. i am not clear how much want to give credence to the more not. that is something that i will move off to the side, looking forward. supervisor campos: thank you. part of the report also laid out some of the estimated costs of the city including the operational variable cost and give us something like $45 million with expenses. 26% being that operational relative costs. the key. supervisor campos? >> supervisor avalos:. i want to thank everyone who has a working on this.

-- who has been working on this. supervisor avalos: reliance on one part means the recommendations are made in other parts of the reports that have been issued, will be embraced and that is a sign we're moving in the right direction. i hope that is the spirit in which the alliance is provided. i do have a question procedurally in terms of moving forward with this item. i have not seen the mou that was discussed by the organizing committee. i know that a lot of information has been provided by them in the last there so and we appreciate that. it would be helpful for us to have an in-depth discussion about what is in the mou and whether or not that is sufficient to address of the concerns that have been raised. it is important for us to not

conflict to issues. on one hand, i agree with what supervisor farrell had said in terms of the work that has been done by mcklellan. i am appreciative of that work. i do not think anything that has been said it be taken in any way to question that. we should be very grateful. to me, that is a separate issue whether or not we as elected body that represents 11 districts, what our responsibility is in ensuring the protection of the general fund. i think that the two are not paul this does not -- this does not mean we're not grateful.

i want to make that clear. i do have a concern about moving forward this item out of committee today. given the fact that there is still some questions that remain and i agree wholeheartedly with supervisor kim as i was watching the hearing who indicated that if there are those questions, the mou was the point that you were during to when you made this statement. it is important for us to resolve those questions in committee before we send an item out. to the full board. that is why we have this committee structured to make sure these items are fully vetted and given the complexity and the boot volume of the document we're talking about, we need to make sure that there is a full vetting of those items. if there is a question about the resolution of something, the place to resolve that is here in committee. that said, i think that it is

important for us to note that procedurally, while we as a body are not able to change or amend the dda, it is important to underscore that we as the board have to improve adda. we have to give approval and we as a body have every right to amend the document that has the approval. mine understanding and i wanted to be very clear is that even though we're not allowed to amend the dda, we are allowed to amend that resolution and include conditions for our approval. if i may ask the city attorney that question through the chair.

supervisor kim: -- >> you described the board is not authorized to make amendments to an underlying contract. that is before approval. what you're describing is the board establishing a document, resolution that approves an underlying agreement and sets out the terms under which the board is authorizing or approving the agreement. the best example i can give is it is as if the board is pre- approving an agreement that contains uncertain terms and if the department is able to get those terms from the person their contrasting with, as approval and a portion -- authorization has happened at the department may not come back to the board for approval of the

agreement the board has described. supervisor avalos: thank you. in my view, we should proceed with approving the america's cup going forward. in making sure that we provide other approval, we need to make sure that approval includes key conditions led going to protect the city. is not an all or nothing proposition that you have to take this. we have every right and obligation as we approve this event, that we include in the resolution, we will be granted our approval of the conditions that need to make. we have every right and of -- every obligation to do that. i would urge my colleagues that once we get to the point where we feel comfortable taking action on this item, i do not know if that is today, given

that there are many questions about this item, that we can move our approval ford and condition that on certain protections be included and what ever is ultimately agreed to by the parties. that, i think, is the approach i hope we follow. it is an approach that will ensure that we protect the citizens and taxpayers. it will make sure that we as a board approve this project and there are many reasons and the director of the port outlined the benefits. i think that we can move this forward without forgoing the need to have some basic protections and i hope we're able to have a discussion about what those conditions and the accrual should be. i have a number of items and i am sure that others of you have other items that should be included. the hope is that if the event authority is committed to having

this event in san francisco, they will understand the need for us as elected officials to protect the taxpayers of this city and county. when the time comes for us to discuss that can addition that should -- the conditions that should be included, i look forward to having that approval. i am -- lucky to have some items that were included in the december 2010 venue agreement that will prove that has been taken out. i think we need to make sure that we reinstate a number of the items that for whatever reason for -- when reason. i think the taxpayers of sentences go will be well served if saw those items are -- san francisco will be well served if we see those items reinstated. we want to make sure the interest of the taxpayers are protected.

supervisor chu: thank you. why don't we move on in the presentation? the mou language is still an open issue. i hope folks will be working with staff to make sure that language is tight. let's move to the purview of the recommendations and the report and i would like to invite mike martin back up and we will go through each of the items. we've seen a lot of different items and it has been moving along at. it is the volume of it. it is not the most ideal in terms of getting information. what i hope we do is to go through in detail what those proposed changes are so we're well aware and all the same page. >> thank you. i will run through a number of the items that were raised at the last hearing including the

ones from budget and legislative analysis. i summarized this in a chart which we have handed out. there are other copies on the stand over there. what we have tried to do is crystallize the issues we saw coming out of that where possible and where needed. we worked with our partner to strike a mutual agreement. we can come back and say this is something we are prepared to move forward with. hopefully this discussion can help peel apart some of these threadsbut we hope it can be und as we go through it. and one of the items brought up was pier 29 as referenced earlier in the hearing. we have come to an agreement about the removal of those rights. goomethodology is to replace the

asset and the refined waterfall of reimbursement so the authorities can get paid by for 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