you had already approved the 20-year capital plan, unconstrained. where we are for the next step forward is the five-year capital improvement program, constrained, meaning that we have to balance the programs that we put forthwith the revenues available. from that five-year picture, we get to our two year budget, which will come to you along with the operating budget in april. in terms of sources, this is where you will see the potential impact from the activity happening right now in washington, d.c., on us. we are fairly heavily reliant on federal formula funds, for example, for much of our transit capital improvements. if that were to significantly change, some of those proposals seem to be leaning towards the back, moving forward to maintain

what we have. you will see that there are a number of other local state and funding sources for the proposed city obligation bond. passed by the voters this past november, legislating a small portion of which, coming to the mta, the mta has not generally been a significant center -- player in the geobond table. the mta has been seen as independent in its need to generate its own capital improvement money. this idea actually came from the budget balancing panel. that we should consider the voters at large as a possible

avenue for capital revenue for program where we have a clear investment that we can articulate in terms of service improvement. we have built in an assumption of this and have not yet begun to take it through the city process to get it into the capital plan. it is an idea that is worth pursuing. we are putting it into the five- year plan. the other thing that you will see on the slide are the revenue bonds that you had previously approved. so that those lines make for new revenue items. new revenue items for our capital plan. moving to the next slide, we were kind of walking you through a bill but a change. from projections that we previously showed you on a five- year side, showing kind of what

it works out to on the to your side, -- two years side. things seem to get dwarfed by the central subway, but when you take it out, jumping to the next slide began point out the differences from what we had shared you previously. because of the way the regional formula funding works, we have quite a bit less dollars coming in. more than we had previously anticipated. we had been working at restructuring our plan and procurement so that we could celebrate purchases. all to me, we will not be

constrained by the amount of federal money flowing through the region. the other changes, the traffic signal line that has gone up in part because of the bond from last year, the other big changes are the inclusion of the $150 million proposed bond that we should be ready to implement upon the completion of the eir. it was the summer of 2013. so, those are the major changes. moving forward, we have developed capital investment in debts. -- index. this is reflected in the unrestrained plan, showing the allocation of resources across

the programs to bring ourselves fully into a state of good repair. so, the 20-year plan, because of the unconstrained numbers, they show what the allocation could be. but we have done now is overlay the five-year picture, so that you can see proportionally who the winners and losers are as we start to put the constraints of the reality of revenue on to the program. that is shown in slide 7. what you will see on the far right column, those items that have a negative are in parentheses and in red. the ones that have a lower percentage of the portfolio based on the revenue available, more than what we think we actually need, based on the 20- year plan, it is based on the

revenues available. they will do a little bit better as a percentage of total available and based on what the total needs are. it is important to note that we may end up with a higher percentage of the revenue coming in and what it needs as a result of the overall portfolio. as opposed to 21% of the overall capital need. we still will not have the revenues that we need in that one line item. this just shows the impact of putting our constraints and how it changes the distribution of the revenues that we would have to address, agency-wide, capital needs. you will see that the bottom- line revenues are significantly last them of what our plan says that we need and what is

happening in washington that can completely exacerbate those proposals to move forward. so, because we have greater needs and revenues to support them, slide in priorities. if that i believe were previously approved by the board. these are basically the filters to ultimately come up with a five-year and two-year capital plan is that we will be bringing to you for approval, so we are taking each one of the projects that are submitted, and each one of the program line items, running them through the filter, and through that process, we will prioritize to get down to a two-year budget and a five-year- budget that is balanced, so slide 9 then shows the shortfall

that we have to close in terms of the needs relative to the revenues. we have gone through one level of prioritization to get the $2.7 billion need down to just a little over $2 billion, but because we only have $1.98 billion in revenues, we still have some gap to close, off -- so we will continue to put projects on that screen that we can bring to you in april a balanced budget. we are also looking at existing projects that have balances, and considering whether or not we need to complete those projects or bring some of those balances forward to address some of these needs, and we are doing that cleanup now, and we will be bringing to you a balanced capital budget proposal along with the operating budget in

april. so that is our update on where we are with the operating and capital budgets with a lot coming in the next few months. chairman nolan: ms, members of the board, any comments? any members of the public? secretary boomer: david pilpell. >> there is a lot of information here, so let me be quick, and maybe i will ask a question at the end. these require a little more detailed explanation, at least to the public. the $2 million in management reductions, not clear what that is, the determination of the leases was not clear what and where the operating impacts would be. i want to be clear, on page 11

of the operating hand out, that charging for transfers i think it's a bad idea. similarly, charging for the clipper, that is bad. there could be a discount for multiple rides on the clipper, similar to tokens, so if somebody wants to load $40 worth of cash, i would give them more than 20 rides so there is an incentive to use multiple rides using clipper, tokens, but i would not charge more overtly for a cash there unless we are increasing cash fares generally, and we have had some discussions about ratios between the cash fares and the ratios. on slide 12, the automatic indexing, one of the boxes, the 13-dollar fare, i believe

sometimes in the past we were told that it cannot exceed twice or anything else on the system, which is cable cars, and the staff may want to look at that. i look forward for more detail on the operating budget so i can comment more use only on that. if i can have a moment on the capital budget, it is only a few dollars billion. there are 16 program categories here, but this does not list specific projects, those things that are at or below the line and at risk of not being funded, that when help understand how the prioritization plays out,

and i have always believed that those projects that save operating and maintenance costs should be the highest priority, and those that expand the system or increase operating costs should be correspondingly a lower priority. it appears that that is calculated in here, and i certainly see director reiskin's philosophy about breaking down crotchets explained very well here, so i look forward to more detail, and a look forward to the budget deliberations before this board. chairman nolan: thank you. secretary boomer: mark grueber. >> mark grueber. this was a date that we were told that we would have

discussion of the tax proposals, which you may have an idea now that are very controversial, and i would really hate to see us stopped at the end of a long meeting, which will then be a very long meeting, and try to get your attention devoted to this other issue when you are probably at wit's end already. i would say to push this whole thing back to may. there is no need for you to be discussing these tax changes now. there is another round of the medallion sales that is just about to get underway, and that will be the thing that is going to provide your revenues going forward at this point, so give us the opportunity to have our issues discussed in an atmosphere where they may make a difference. secondly, and this is totally unorthodox, and probably any

political consultant will tell you it is a harebrained scheme beyond any possibility of passage, but i see you have five revenue solutions in terms of ballot measures, and my thought was, why not put all of these before the public at once and say, "take your choice"? it is very hard to get a tax measure passed, and if you say to the public, "we have to have a solution. you take your pick." and those that do not get enough votes fall by the wayside. only the one that got the highest number of votes would pass. they would be receptive to that. just an idea. chairman nolan: interesting thought. there is a conversation going on around the budget proposal. it is one better than three or four, so interesting.

mayor brown weighed in on this. anyone else on this one? secretary boomer: there is no one else. chairman nolan: an action item. how long do you anticipate the closed session? 10 minutes? we have a request for the break. secretary boomer: item number 12, a discussion and vote to go to closed session. chairman nolan: all in favor? all right, we will be back at 20 after.

secretary boomer: the directors went into closed session, and i never drove in the discussion to vote to disclose or not to disclose the closed session. chairman nolan: motion to disclose? not to disclose. secretary boomer: and as you noted, at today's meeting will be adjourned in honor of hannah. chairman nolan: ok. thank you.

>> good morning, everyone. i am the director of the mayor's office of economic and workforce development. we are here to announce the 10- year lease for river bed at 680 folsom st.. 167,000 square foot lease. we have the mayor, ceo of river bed, the owner of the building, as well as david from jll to talk of the significance of this to the city. >> thank you, good morning. welcome to the super bowl of innovation. while we did not enjoy the other super bowl, we have been working on hours.

i have always referred to san francisco -- and we continue to do this -- as the innovation capital of the world. riverbed's decision to sign a 10-year lease and to work with the city to renovate a building here in south market, to make sure they are staying and growing here is a reflection of not only their interest in making sure they continue to find talent that exists in the city, but that the city, working with our state interests as well as our i.t. companies, continue to do everything we can to make sure they feel comfortable and are creating jobs. every time you hear about a major company like river bed making a decision like this that is very significant, this is their headquarters, but it is their global headquarters. to suggest a 10-year lease is important.

they have over 500 people working today. this additional new space than they have signed a 10-year lease for has 160,000 square feet that will allow riverbed to grow and potentially add over 650 additional jobs on top of their 500. i.t. work is growing in the city. certainly, we want it to grow. we have a lot of i.t. solutions to be had. riverbed's technology is important, allows technologies to have i.t. management's -- companies to have a i.t. management from the date of filing to storage, all those wonderful things that technology people will have a much better way to explain and i do. i do suggest to you that this is, yet again, another example

of how we are working with ceo's to make sure that we sit down and talk. it was literally last fall that we sat down. we knew they were looking, they knew they were growing. it was not going to be in some other place that we would lose them to. we had some great partners. we just came together very well and focused on what we could do to make sure they stayed here. they know there is talent here. that is not a question. but are there other things that stabilized their ideas come interest to work here long term, and growing here, as we have had that philosophy. we want i.t. companies to stay here and grow. as a result, we are evolving our policies on a weekly basis to

continue attracting companies like riverbed, making sure they feel comfortable. the end result is more people get employed. you will see numbers continue to go down in our unemployment rate. it is at 7.6%, but i am guessing that it will go down further, hopefully, with all the companies that are still talking to us about what we can do to help them. as we do, they are hiring left and right. it is exciting for me to join today with jerry, let him explain what it is they do, in a very detailed way. again, it is the team, what the city does to make sure we stay as the innovation capital of the world. thank you very much for allowing me to announce this. we will have a chance to visit their bed soon. i think, -- river bed soon. i think, once they get their

release started, they will move in in 2014, and then that goes until 2024. i hope to see them continue to grow. we will be down there cheering them on, understanding more about the involvement of their products. >> riverbed started in 2002 and it is exceedingly gratifying from where i stand to see a company of its size and stature in the technology world, make a decision to remain in san francisco and to grow its global headquarters here. with that, i want to introduce the ceo of your bed. >> thank you. it is exciting for us -- we just announced this internally to our employees on friday. we sent around a photograph of the new building. when you work in technology in the bay area, you realize every day it is a war for talent.

we are fighting to get the best and brightest. it is all about and look for property, and that comes from the minds of the people we attract. we found san francisco is a key location for attracting that power. my business partner and i started the company 10 years ago. we will be passing 1700 employees worldwide, over 500 in the city. that number will grow and grow. starting on our second decade in the city and hopefully for a long time to come. we are a little unusual for technology companies in the city. many of them are web-based companies. we are a deep, in the strongest drink network technology company. we make heavy-duty equipment for the largest government and corporate networks. we are more like cisco foor othr companies like that. i had to have some discussions

with my early investors while i was not in silicon valley. i am glad we had that conversation, made the investment. we had a good run here. we just finished a quarter of $200 million, $800 million run rate. we hope to pass $1 billion soon and we soldier forward as we move into our new headquarters in downtown san francisco. >> we would not be here celebrating a police announcement without a building. i encourage you all to look at what 680 folsom street looks at today, juxtaposing it with these renderings. it is not only good for the economy, but for the urban landscape. i want to thank michael for his work to date for helping to transform this location. >> this is about the 20th project we have done in san francisco. it is visually challenged in its

current state, but we think we have put together a great design. our partners and others have hired the best architects with som -- one of the best, sorry. we are pleased with the design. both jerry and his company had decided to go here, but it was also the mayor and city office hoping to keep technology companies here. it is a joint effort. after you take up the skin of the building, it has amazing attribute that you have read about in our press release. 35,000 feet square plates. floor to floor slabs in the city, which is unusual. that tenants in this building will have some amazing space, some amazing views, and our r ehab will be as good as

anyone. we are happy to be involved with the city. thank you very much. >> it really did take a team of folks to bring this deal together. we had great assistance from david from lasalle in helping to close this deal for the city and riverbed. >> good morning, everyone. it was a real honor to represent their best technology in this transaction, a 14-month process. i want to thank and congratulate jerry and his real estate team for the pro-active way they have managed their headquarters, getting a head start. mike and his solid team of putting this building together. mayor lee and jennifer for the continued great work they are doing in helping us represent some of the leading technology companies, here in san francisco. it is a real pleasure to be here. thank you very much. >> we are going to break and

then the mayor will take questions. not at the podium.