of itself. since our 1997 -- time coming back to the city, we have only been able to fix nine out of 39 peers. we have a large portfolio that is still in need. we are face with an opportunity through the use of the america's cup and the investment that will come for the event and follow thereafter to cross a number of pairs off our list at once. in 2006 the port adopted the capital plan that current year numbers and 20 $13 is $2.20 billion of need for those remaining 30 appears -- piers and 30 substructurews. -- substructures. this allowed to focus attention on pier 26 and pier 28 and 30 and 32, all of which side --

reside in the central waterfront area which is a key area of the waterfront land use plan. while i know the america's cup is fairly new to our city, it is -- has been a year and half have been talking about this. since 1990 and since 1969, we have been talking about fixing those peers -- piers especially in the central waterfront trade we have huge investments in the embarcadero road way. in the water side and a landslide of the embark -- embarcadero. we have invested in the ferry building with private daughters -- dollars. we have invested in a ball park. in addition it gives us another source of funding to address that $2.20 billion in need. that is the big picture of where the development can go in the event can help us a lot in the long term to create as i said we

would call horizontal development to help us with our maritime resources and allow them to be reused after the event has passed for other purposes and that is the mission of the port of san francisco. that is to promote public access and recreation. it seems like there are loose ends to tie up for this hearing. i wanted to urge you to consider the big picture and the benefits of the board and support us in this effort. thank you. supervisor campos: thank you. but go to the fund-raising component. -- let's go to the fund-raising component. >> thank you. i will ask terry mcclellan to

give the substance but i want to frame the issue. if you will pardon the analogy, we're building the ship as we are sailing in. this has never been done before. there has never been an event that has required the coordination, federal, state, and local of the bay area. we have learned a lot. stephen berkley would agree that when we were negotiating with using a model that was based on the wojciech contract which was the most recent one. in hindsight it was not the right model. we were putting a round peg in a square hole. we're looking back a year later and say what kind of modifications do we need to make on a number friends? having said all that, we committed as the america's cup organizing committee to use our best efforts to raise this $32 million that is estimated the tax payers would expand to host

this event. as one of the key indicators was and relates to other issues involved in the america's cup but 37 days after ceqa certification we would be in a position to demonstrate that roughly one-third in this case, $12 million have been raised. that was always an indication of what was the willingness in the private sector to support this. i am happy to report to you as i did last week that we have raised $12 million. we have raised $12.50 million. have we have the luxury to write this, we would have said, does that mean cash in the bank seven days after? does that mean it is in the city coffers? i simply have to advise you that in gaining philanthropic front -- funds and private sector funds, we have pledges for this amount and it will be made available as the city needs to cover its cost. in this case we have been

devised by the city that between $9,000,000.90 $0.5 million will be needed by june 30. you will have the amount, $9.50 million to pay the bills that would be spent by the taxpayers to pay for this. i admit many people have interpreted this document in many ways. i stand before you can tell you that as a private fundraiser, not compensated for this, it is a challenge but a real joy. they want to see it come here. we have not gone beyond the committee. that is seven a distinct and distinguished people that have supported us from a philanthropic sandpiper we have had an -- made an arrangement to

modify our grants to local corporations fall within the event authority's perfume to solicit sponsor urgent and funding. in exchange we sold that. that represents the money that we're going to provide. i do not think i can elaborate any further on that. i'm happy to answer any questions at the appropriate time. thank you. thank you. >> and want to turn my attention to the feedback we got and let you know we have been working with the mairs project team on an amodeo. i shared a copy with your office earlier today. in this off in draft form but our endeavor to give greater certainty and clarification to itself what is that force and how we can have better aligned expectations moving forward.

the fund-raising is dynamic. it has never been done before but we're encouraged by the support we have received and our endeavor is to understand what the cash flow needs are of the city and every day and week in the philanthropic marketplace, raising funds to meet those needs and meet our ultimate goal. we are here to get feedback on that the draft and hope it will be final. is not part is notd -- it is not part of the dda. i wanted to touch on -- it is not in your packet. i will give you one. president chiu: thank you. we

we know how much work and how difficult. i want to state that at the outset and let you know the questions i have had nothing to do or are in no reflection of the intensity and the energy with which you have pursued fundraising. i finally got a chance to look at the sponsorship agreement. is the events -- the advance based on real commitments or is that in advance of what they anticipate the commitments to be? >> it is in advance. it's as an advance on our commission. we have sold the rights to local markets and the funds will be raised going forward from january 1, 2012 and they are advancing us the first 10%. president chiu: we are getting

money ahead of time based on what we think will happen. >> where helping them across a number of efforts. we have taken them to over 90 companies now and encouraged by the momentum especially with companies that are headquartered here and the interests. those companies are starting to reflect and show. president chiu: the committee shall provide an irascible fund letter of credit in such form and by as should be acceptable to the authority and its discretion. when i read the draft mou, it did not seem to address this point. for many of us, we want to make sure this money will come in and we had assumed there would be some financial instrument to

help insure for that. could you give us the status of that issue? >> i have been working closely with the mairs project team on finding the right size for the bonds solution. some of the guarantees the bond was intended to cover including insuring the event authority reached its ultimate goal of funds they were anticipating raising from corporate sponsors who discovered there is not a tool to do that. there is no financial instrument. over six months we have been working with the event authority on finding what is the right instrument to provide that assurance. we're in an ongoing conversations and have a couple of models. i will ask mike martin to give you his perspective on that. there are other things that need to be guaranteed. general liability insurance and we're carrying the right now as one of the expenses that would be covered and paid. it is designed to be purchased

and that is a $50 million policy. that is $500,000. that has been rolled into the number that the city is expected to expand by june 30. it is closer to 9.8. we're in a position to buy that insurance and we will continue to work with the city and the event authority on what else needs to be in place for the other guarantees. president chiu: that is good news. i did not see language that suggested that such and a premier would be put into place as part of this. >> i am happy to work on adding that. what you have is a reflection of the great work that mike and i were working on over the weekend trying to get ready for today. we will take that direction and find a way to incorporate it. i appreciate the feedback. supervisor chu: just to clarify the question about $8 million, that was a percentage, that

agreement as a percentage of the amount that is raised, correct? >> the percentage of the event authority's revenue. supervisor chu: if it is is that we receive revenues that exceed its percentage share, is not really $8 million, we will continue to receive that amount of money. >> if the event authority is successful and raise beyond what that percentage commission represents, that keeps us alive and motivated to insure they do exceed that. we would then receive additional funds above and beyond the aid. supervisor chu: if it is the case for the event authority does not raise what is needed, the $8 million is still hours, there is no refunding. >> absolutely. it is not refundable. it is how we will meet our additional obligations. supervisor chu: thank you.

supervisor avalos: thank you for your hard and tried worker and heavy lifting. it is one of those things that was important to me when i first approved the host and the new agreement that would have a fund-raising mechanism that would help offset our general fund and put into the america's cup. and i did not see the memo you had written about -- that came in today or yesterday. i think it would be great if i got a copy. there are a lot of things that have come in from different sources so it is hard to sort through everything. that summarizes the challenge i see. i see we are getting a lot of information at the last minute. i had a briefing yesterday there has been movement from. i have not had a chance to see how the smoke has cleared on the document to see what i will be voting on today.

i feel uncomfortable approving anything given my experience i had a couple of -- a year-and-a- half ago approving something and seeing things change after the fact. it is important that and i will propose this with the committee, we can decide later on today. we can hear everything today. perhaps recess this meeting and come back another day so we can sort through all the information and then make as best we can an informed decision about going forward. there could be moving parts that come afterwards. i feel that we owe it to ourselves in making a key decision here that we have as much information as we can and i have had a chance to review. then what we had last week. we were getting some pits of what happened.

it is great to see. i am very squeamish about hearing, use our best efforts and endeavour, those are words that would never suffice for the city having to pay for any project or funding. we have to bring up the money or not or does not happen. that is what i think is before us. i wanted to put that out. it might be best if we hear everything but i would like to propose that we do have a recess for a couple of days or if we have to be for tuesday's board meeting to come back and finalize what we're seeing in terms of the real details that are before us. supervisor chu: thank you. i think it is legitimate in terms of the volume of information we have received and the last minute changes. we also received an mou not that

long ago. we have not had a chance to review it to provide the feedback we're looking for. i believe we will be will to do that between now and tuesday. the one caution i would have with recessing is whether our time constraints are met. i certainly hear what you're saying about the documents. >> the mayor's office may want to address that if you are so inclined. >> good afternoon. a wide to remind you you are sitting at the committee of the whole on tuesday. you have another opportunity to review this. there will be public comment and you are sitting as a committee. this is not the final time the proposal is for you. it is not being moved as part of the file. this is your first opportunity to see it and the first opportunity to talk about it. we want to get the feedback from you so we can incorporate those changes by next tuesday. and have them ready for you.

supervisor chu: thank you. supervisor kim would like to ask some questions. i would also ask mike martin to come to speak to the expense side. supervisor kim: i understand the mou is not part of the file. my vote on moving the dda out of committee is contingent on finding and mou that is to our satisfaction. i have expressed it is important for me to see a $12 million commitment by june 30. i do not -- it was not in the amillia that we would get reimbursed based on actual costs and we are exposing the city to a lot of risk with the dda that is moving forward. it would make me feel more comfortable that there was a cushion for general fund in terms of how we're protecting that. i would like to see the mou hammered out before we move this out. before it comes to the full board.

supervisor farrell:. as a non committee member i have been given a number of the documents here. i imagine it is a last minute for one year. in terms of working on the committing with these folks. i spent a lot of time here. we are really lucky to have kerry running this and have someone like mark buell chairing the committee. some of the press has been taking people to task that we do not have $12 million. i hope the board does not lose the forest through the trees picture. the fact that it is hard to raise $32 million or whatever the number is we're trying to

raise here, not to say it will not get done or get down on time. -- get done on time. money does not fall out of trees here. this is private money. this is not something that is obligated. i want to make sure we understand we are not relying on volunteers. in -- a hope in our dialogue and questions that is part of the picture we're lucky we have someone who is part of this. i have seen firsthand but i have seen in presentations. i want to make sure we have that part of the -- as part of the things going for. supervisor campos: thank you prater would like to ask mike martin to come up. much has been said about how we

will mitigate the risk. i do very much appreciate the fund-raising efforts that have gone on but also that will be continuing for the next two years. one of the things i wanted to dig into was this issue of what is our risk. the number that we get to, the $52 million of expenses and why we get to $32 million. we're going to raise $32 million and will expect the city is going to receive tax benefits, not to the economy at large but the city will receive $21 million and that gets us to the $51 million in expenses that we expect we will expand in order to carry forward with that event. that is scalable. i want to understand from the port's point of view, what will be the plans to scale down those expenses? should we need to? hsu reecy there is a marker in time when fundraiser does not

come in the way we expect or there is a time when we see the event is not draw the crowds would hope to and not receiving the direct tax benefit. what are the plans to reduce expenses. i do not believe that is a hard cost. grex good afternoon. -- >> that afternoon. thanks again for the thoughtful discussion last time and engaging this today. we have provided you with a lot of information and will try to help sift through it. i would like to stop and say the exercise of drafting an mou i find helpful as someone trying to manage the city's effort. we have been engaged with the ec a say in terms of fund-raising -- understanding their fundraising strategy. linking their fund-raising progress and our process and

adaptive budget prices is going to help us deliver on the promises of an event that is not only a great social and economic boom but also successful for the city's finances well. if i could have the slides. i have -- what i wanted to look from from the no. we see last time is playing out a couple of different scenarios. it wants to use the budget and -- analysis. i want to use their base case and also there will spectator profile so we can see how that sensitivity works and how the variable costs can be managed going forward. to start out with some assumptions, i wanted to prove

together a number of fixed costs that we're taking as a given and sort of a conservative analysis. the first is planning and rep -- preparations which have to take it -- place to-have been here by -- we have talked about in prior meetings. to make sure we had training expenses to ramp up for the august 2012 events. if those fall in the fiscal year, that is abuzz indeed we did not seem -- coming. you approved an mou for lost rent over the course of the event and in 2010 there was an estimate for cruise's general fund contributions $0.50 million. we have retained this even though we understand and want to make sure that everybody is aware, this is an ongoing benefit.

also providing revenue to the city was the -- city's planning. i want to point out their revenues you see on the next slide do not include predictive levels to the events. they're not projection as the 2010 analysis. we're showing a consecutive nil -- analysis. there have been taiex with its economic benefits. that is some thing to keep in mind. and his ruling out the cost items for operational rising of the events. mccall is that. running through the costs is we did a planned level estimate.

that call for 5.4 million specters and we realize that is of high estimate based on what we see coming at us but wanted to do that to show you we can take a conservative outside envelope. these costs can be adapted to reflect the spectator demand. what we're talking about here is a living city services in a way that all eligible to move around and ask congress to continue. the waste is the fifth step -- we need to do this to put our best foot forward. they are level of effort specific. in terms of norah buses. or the number drivers. a number of -- to make sure we have the barriers out to make sure there rose -- roadways are safe for bicycles and pedestrians and automobile

drivers. ruhle see -- we will see a one- third drop in the spectator and racing syndicates profile. what does that reflect? these are flexing their will costs. we make the comparisons forelands lie. you see its will and christine at the top and support of the tax remains as avid-evidenced in the november 2010 report. under 60 million in the lower scenario. after that i wanted to do a couple of things to show how old the fund-raising will allow us to succeed. in terms of pledges with that you have the $19.50 million.

if you take the full $32 million target and combine it with general fund revenues, you basically get this $52.3 million number and a 47.9 #. that resulted in a surplus in each case between seven -- or $8 million. we have the whole $2 million in your -- forehand. allied to take another step and talk about the local break-even need. if we realize the 12.5 then been pledged what we have a total of $11 million which is fairly reflective. i think we feel like we're on target list, you approved in 2010. we need to have continued vigilance. we also need to have an adaptive budgeting strategy so we do not over radar what --

over resources. that is my overall cost presentation but i am happy to answer questions about this before. supervisor chu: in terms of this slide that you provide did earlier which was set -- $27.6 million, those are the fixed costs that we need to pay in order to get ourselves a bear raid, right? this is constant would not able to walk away. we have fluctuations in attendance. >> correct. if they realize more percentage rents, that would reduce the calculation of what their lost rent is due to the events that there is now -- more reflection. if the rest of it is fairly static, -- in terms of the base

case scenario that you laid out, the operational variable costs in terms of our police, fire, medics, many traffic, these are areas where you believe we can scale up or down depending on what we see in terms of record. >> 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 thingsan