are changing at this point? >> i would not want to characterize it as no longer a source. the source would be the event authority reimbursing us, or it would be deport revenue capacity supporting that $2 million, so there will be a source. he is just because the negotiations are continuing, and we're going to look for a revised plan. we are not certain of the sources. chair chu: in terms of the balance of the 7.2, with a 3.4, that is still available in the fund balance, and you are saying this is necessary at this moment in terms of cash flow issues. >> yes, what we issued in 2010. chair chu: ok, and then in terms of the remaining balance, the over $5 million, do you have any update on this? i know you were in agreement with a budget analyst to come back with a report to provide us

with information about how they will get to balance. do you have an update at this moment? >> at this moment, there is actually somewhat in flux. we have been looking at a potential source, so we are continuing to explore that as source for the phase two project. i am actually going to flip to a slide that shows the different ways that we are looking to finance this, the 6.9 at this point, although it has been further reduced. we're looking to ab 664, the legislation that allows us a share from the america's cup development site. we are looking to see in the revised deal what waterfront improvements would qualify under ab 664 that will still be

improvements for our peers and docks -- piers and docks. the special events and then you, we know the america's cup will be the first special event, but we hope to have that for future special events, and that will be a revenue-generating option, and we're also looking to identify new planning sources, perhaps restoring other and our mental improvements that are associated with the site, and we will continue to look at we appropriating -- restoring other in our mental improvements. i have the benefits of the positive bidding environment. that seems to be as the economy improves not as possible as we thought originally. it is good for the economy but not for the cost of our project. and then we will continue to look at select project components that could be

deferred or reduced from the project scope. when we come back in april, not only will we have a funding source for your consideration, we will also have our project costs really defined better. what i have been bringing to you is conceptual design numbers. we know more now. the costs have gone up some in phase two, and we are looking at how to reduce costs and what the sources look like. chair chu: supervisor kim? supervisor kim: this is an informational question. he pays property taxes on those? chair chu: i understand they have submitted the budget to the office. that your budget include a $6.5

million allocation from the general fund at the moment? >> no. no, we are waiting for the advice and guidance from the mayor's budget office on whether this is a cash contribution or debt. we are working with the office of public finance for the ports share, and the 6.5 could be included in that, or it could be a cash source, so we are in conversation with the mayor's budget office about their preference and its committees preference. as you directed, we're looking for payment for the reduction of the contribution, so when we come to you in april, we should have, we will have answers from the preference of the mayor's budget office in that regard and potential reductions by enhancing other payments sources. chair chu: thank you. if there are no questions at this time, why do we not go to

the budget analyst's report? >> we were advised by mr. rosenfield at today's meeting about the potential question regarding the $2 million. we were friends that at the top of page 5 of our report from the event of 40. they were to reimburse up to $2 million in actual expenditures related to the shoreside power relocation. i would recommend the fact that given there are other uncertainties, it be placed on the budget and finance committee reserve, that $2 million, and i think the committee would then get the total clarification whether or not that is going to be paid or not. regarding the fiscal impact, we point out on the bottom of page 5 that the funding sources for the entire cruise terminal project, phase one is $62.30

million, and the funding sources are identified in table two, the attachment of page 9 and the report, and the actual budget for the expenditures of the 27 cruise terminal project is $93 million, and that is shown on page 9 in the attachment. the attachment was provided by the port, and that includes over $60 million for phase one and more for phase two. and regarding the item of uncertainty, on the attachment, it shows the total budget of $30.70 million, and there has not been an identified funding source, and that is why we have made the recommendation for the port to come back to the committee, to give an updated

status on that $5.30 million. we do recommend approval for this appropriation ordnance with the contingency regarding the qualification regarding the $2 million. and we do note, as has been pointed out, that there are two, even within this phase one, there are two still pending actions by the board of supervisors for two funding sources, and that is the $15.50 million for the certificates of participation and a possible general fund appreciation of $6.50 million, but given that this cruise terminal project has come before the board several times, and it has been the policy of the board to proceed, at least heretofore with this 27 cruise terminal project, we do recommend approval. chair chu: thank you, mr. rose. i think in light of this news that we do not have a funding

source for 2 million, i think both the supervisor avalos and i find it that the cleanest way for us to deal with this is to reduce it by the $2 million, but the only reason why we may actually pass a $27 million with perhaps a reserve on the $2 million is it there is an eminent source of funding and we expect to becoming relatively shortly and also in terms of the timeline, if there is a particular timeline that we are trying to meet. can you explain to us why we may want to do this with a supplemental? >> yes. there is an imminent source, and we are working with the office of public finance on it. we do have a timing of cash needs throughout this project to deliver it in march of 2013.

the office of public finance is looking potentially at commercial paper for us to meet our cash flow need in june, and with this $2 million coming out, i believe we would have a deficit in may, so we would be needing commercial paper in may without this appropriation. we would be needing a commercial paper source if the event of 40 is not reimbursing us for the $2 million, so there is an eminent source coming. the source of repayment will be harbor funds for the $2 million if, in fact, through the final dda they are not reimbursing the port for those costs. so that said, if it is the committee's strong desire to just reduce the supplemental appropriation and strike out the $2 million, we would just need to issue commercial paper earlier instead of june.

we would need to talk to the office of public finance for a may auction. as i said, because it is still under consideration, and the final deal is not before you, it is hard for me to say, to give my best recommendation to you today, but if it is your recommendation to reduce it, that would be the impact. chair chu: in terms of what you are working with the office of public finance on, is that something you are bringing before the board? >> oh, yes. chair chu: ok, it seems that you can come back at that time with that $2 million if it should be materialized in the process, so i think that will not necessarily impact and have you go to require commercial paper early. it sounds like it is already a bill to a process that you have to come here anyway. >> it is just later in the

process, so the proceeds would not be available until july or august, so right now, our cash problem begins in june. without the $2 million, it would push back to may. chair chu: from what i am understanding you say is that one of the potential sources -- >> and the proceeds would be available in the summer. chair chu: either way, it will not come later, you'll still have to get the commercial paper is. >> yes. chair chu: thank you. why do we not open this up for public comment? are the members of the public who wish to speak on this item number three? >> ♪ let there be you let there be made

let there be oysters under the seat mate you fly like a dove most of all, let there be budget money america's cup love ♪ chair chu: thank you. >> good afternoon, supervisors. i just want to thank the committee for a cheerful discussion of this item, since it does deal with $7 million, and i also thought that mr. rose had a very simple but accurate analysis, so i think his recommendations should be carefully considered. also, i would like to make one in formal suggestion. maybe we can come up with $2 million in less than one hour. we can always ask the mayor to

contact our friends overseas, in other words china, and i am sure the chinese can easily find $2 million sitting around if for no other reason other than philanthropy. thank you. chair chu: thank you. are there any other speakers who wish to comment on this item number three? seeing none, item number 3 is closed. colleagues, the item is before us. supervisor avalos: i feel that since they have to come back, we can approve this for the shoreside power aspect of this appropriation ordinance then, so

i would like to severna park or delete that part of the appropriation for the $2 million related to shoreside power, and then a motion to approve that for the full board. chair chu: thank you, supervisor avalos, i agree. i would be happy if you had another funding source to bring it before the committee and make sure that its third in a timely way, but it does not seem like there would be a problem to have been severed out, so i would agree with that motion, so the motion is to sever out the uses and the sources worth $2 million, and so i would ask the department work with our city attorney to make sure we have that reflected in the record. we do have a tight timeline in terms of making sure this item gets to the full board, so if

you can, make sure that document, red line versions are available by the end of the day, that we cannot make sure that it is therefore this coming tuesday. so we have a motion to sever out the $2 million and then a motion to send it out to the full board, and i think we can do that without objection. thank you. item number two. clerk young: item number two, appropriating over $962,000 of the fund balance for fiscal year 2011-2012 for the design of the jefferson street streetscape improvements, and placing $52,600 on controllers reserve pending receipt of the interest earnings.

chair chu: thank you for that. we have a number of people here, but before we go to that, i want to welcome our president been chiu. would you like to make a comment? president chiu: fisherman's wharf is a destination. and about 10 million tourists go through. this is in the heart of the wharf. as you know, it is not a good street level experience. it is poorly designed for people looking for parking, extremely difficult for cyclists and for muni. for many years, there have been discussions about how to build the streetscape. in fact, this project dates back to 2006, which is when this has happened. there is no consensus that will be presented today, and this is important not just for the neighborhood and for my district but for the entire city, and the

budget analyst's report in addition to my strong support, mayor lee also wants to make sure that this project gets done for the eight america's cup. i hope that he will support this. chair chu: thank you. >> i want to start by saying that the supplemental appropriation requests before you is the design for a two- block segment of jefferson street. we are here requesting design funds so we can get started right away on design so we can get construction under way by this fall. we are going to be on a very tight timeline in order to complete the project by june 2013. and that is in time for the first america's cup event next summer. before i get into details about

what the total project costs are going to be and what our timeline is, we thought it was important to give context to the project, and a representative from the planning department is here to talk about the plans and what the community is after and also the benefits that are going to come to the city from this, so i'm going to have neal speak first. >> hello. i was the lead planner. just some background, our involvement began in 2008, when, as the supervisor indicated, we have plans going back to 1961 calling for improvements to jefferson street. this is an area that has received a lot of attention. the recent started in 2008 at the request of supervisor

peskin. we soon hired some architects out of copenhagen, denmark, who really gave us context. we counted every human being, and during the summer months, and we found some very surprising numbers. jefferson peaks at about 65,000 pedestrians per day. that is a huge number. we have done similar numbers the rock the city, and on the market street and one pier have more. it is very crowded. there is a high level of pedestrians. there is a safety issue and enjoy ability issue that extends not just for pedestrians but four cyclists. this is the largest gap in the bay trail remaining. in this area alone, there are about one-quarter of 1 million

bicycles rented every year, and there is an important connection between downtown and the connections to the west. and the circulation is really geared to the automobile. most of the street is given over to the automobile even though by far the largest user is the pedestrian. this turns this relationship on its head and does more for the pedestrian while accommodating the automobile where and when necessary, so the goal that we worked with with the key stakeholders is to retreat a beautiful, lively, memorable st. that strengthens fisherman's wharf, some predicate in on that is prioritizing human comfort at a speed and a scale that is scaled towards the human body and the human movement, and that includes pedestrians and bicycles, and so the garden design that we have developed,

we take on street parking. we have 16 but sidewalks from the south, and the pedestrian zone on the north to take advantage of the light, and that includes a 16 foot sidewalk and a mixed cafés 9. there is the experience as you walk down jefferson street. but chair chu: do you have slides. >> no, we do not. chair chu: in the future, if you were able to distribute these in advance, that would be helpful, because we cannot see the screen.

>> thank you. this is the first two blocks. jones and high street. it would allow us to have some traffic diversions strategies, so the key part of the plan is really to reduce this to the greatest extent possible, so that it is a call, say, and enjoyable experience. again, some background, in fiscal year 2010, the area received about 9 million visitors and generated through various rents and taxes about $65 million revenue towards the city, said just doing a very basic sensitivity analysis, what would happen with a 5%, 10% or more increase based other cities across, going to new york and denver and portland in between, and you can see just even a modest increase results in a long-term benefit to the city on

an annual basis. and with that, i am going to hand the microphone over for douglas for the budget. thank you. >> hi. the lack of the handouts is my fault, not his. i apologize. so the concept plan that came out of the planning effort proposed a very beautiful project that for these two blocs would total about $8.70 million. before we went to the capital planning committee, the mayor's office asked that we look at other alternatives that could be considered, it said these range

for about $5 million of the way up. we need to make a decision fairly soon and about which option we are going to be implementing. the main difference and the costs is using much less expensive materials. option one involves a lot of granite in the street. it is a very striking design, and i think it is appropriate for jefferson street, which is such of an iconic street for fisherman's wharf. it is, however, very expensive treatment, so we can do a lot of the same street scape treatments, two-way traffic calming eliminating the parking lane, providing for safe bicycle traffic, also widened in the sidewalks and making more room for pedestrians out of the street, so we are looking at

these three options, and we will be coming back to you probably at the time that we present the budget in order to ask for an appropriation to pay for construction, so as i said, we are going to start design immediately. we will be holding stakeholder meetings to discuss those options. we hope to have the design done by june and immediately gets bid documents out so we are able to start construction in october, and one of the things that neal did not mention, and president chiu might want to mention, we would have to do this during the moratorium. usually during the holiday, we suspend construction. the merchants in the fisherman's wharf area are so anxious to have this project implemented

that we're going to be working right through that moratorium with their understanding and cooperation because they are concerned about our meeting that schedule. that is it for this light. the budget analyst noted that the supplemental appropriation request was for $962,000, but the money that we need for design on the totals a little north of $700,000, and they have recommended that the remainder be put on budget committee reserve. that makes sense to us, and we would come and ask for that reserve to be lifted when we come back to you to request construction funding. so that concludes our presentation, and we are available for any questions. chair chu: thank you. i think there will be some questions.

these are the fund balances from the proper -- prop b? >> it is all interest earnings on a state proposition 1b bonds, said these are the state's infrastructure bonds that were passed to think in 2006, and the city received about $40 million in proceeds that were appropriated and paid for street resurfacing projects over the past few years. those first increments of revenue came to the city when interest rates were still high, so all of this is interest earnings on those funds. >> -- chair chu: that if it was not for this, what with the interest earnings be spent on? >> they can be used for what used to be called proposition 42

money. it is now gas tax money. they can be used for any capital improvements in the right of way. chair chu: so there is a fairly broad area that we can spend on? ok. why do we not go to the supervisor? supervisor kim: given the price for art but cost of phase one, which is rather high, if we go to a cheaper alternative, is it less long term in terms of the improvements? does that mean that we may have to make improvements sooner? >> i do not believe -- you know, we may have to do in a few years away relatively inexpensive -- inexpensive miller and fill procedure if we go with an asphalt to design, but the street itself will have

the same useful life, and it is possible that we would do other treatments and balding pate or that kind of -- involving paint or that kind of thing, but they would need to be done. supervisor kim: i saw the public row, the largest one, and then i saw a arcades and entertainment. i am wondering what that was. >> i am going to let neal speaks does agree to that. >> right now, what we are proposing is for reducing the right of way that is dedicated to the automobile, basically taking away the parking lanes and allocating it to the north side of the street, so what we get on the north side of the street now instead of