order? >> [roll call] item two, approval of minutes of the february 14, 2012 meeting. >> so moved. >> second. >> all in favor? any public comment on the executive session? sorry, going to move to executive session. >> public comment on executive session, item three.

>> ok, i think we have a quorum. let's reconvene. >> i move that we reconvene in open session. >> second. >> all those in favor? i move that we not disclose anything discussed in executive session. >> second. >> all those in favor? ok. >>please be advised that the ringing of and use of cell phones, pagers and similar sound-producing electronic devices are prohibited at this meeting. please be advised that the chair may order the removal from the meeting room of any person(s) responsible for the ringing of or use of a cell phone, pager, or other similar sound-producing electronic device. please be advised a member of the public has up to three minutes to make pertinent public comments on each agenda item unless the port commission adopts a shorter period on any item.

item 7 a. -- item 7a. commendation for robert bryan, port legal counsel. >> thank you for joining us today. i have a fairly quick executive director's report. i will take it in reverse order. the first is to announce the sunday streets program will be starting up again. it will commence first at the port of san francisco property from fisherman's wharf and the north down pass the ball park and south to where it meets with the illinois st., right around pier 66. that is always a great event for the city and port in particular. we are looking forward to that. since 2008, sunday streets has grown from two events to attend events and free its miles of free space on the roads. it was the third city in the nation to enact something which

is a free community oriented initiatives. since then, it has become galatians -- the nation's largest. it was one of eight programs in the country to be selected for inclusion in first lady michelle obama's let's move anti-obesity campaign. sunday street brings thousands of people out over the course of the year and brings them to places where they may not usually go, such as the waterfront. so we are happy to participate in the program and always happy to read it off. that will be saturday, march 11 along not embarcadero -- along the embarcadero. >> you said saturday, march 11? >> sunday. my apologies. sorry about that. sunday, march 11.

thank you for the correction. for most of the time i have been at the port we have been blessed to have robert bryan as our general counsel. he is an employee of city attorney dennis horace -- herrera. one of the few departments to have our counsel hamilton office with us. given the complexity of the business, it is quite a blessing but only for us, but for the attorneys, who would be on duty constantly going back and forth. robert is now being transferred and moving on to bigger and better things. he has asked to be counsel to the newly formed oversight board of the city, which is the board responsible for deciding what to do with the assets of the redevelopment agency, adhering to their contract. it is a newly formed position for a newly formed commission

for a newly formed mandate. not nearly as exciting as the port's business, but it will be a challenge for him. we have really benefited tremendously under robert's leadership. he arrived in the first couple of years and spearheaded a number of relooks at our boiler plate contracts, memos, licenses, to bring them up to the best possible standard. he has helped us through numerous complex issues and litigation, as well as spearheaded a couple of projects on his own. most notably, as it relates to some legacy issues of pg&e at the power plant site. once the transfer was made, there were some of lingering issues that roberts took the lead on resolving on the port's behalf. i am excited for robert to have

this great, new opportunity for the city, an opportunity which likely has an impact on the port. it is nice to have someone representing in some fashion our interest, but it is sad to see him leave in the middle of everything he has started. robert, thank you for everything you have done on our behalf, and for your great professionalism, the way that you have raised the bar on our standards of contracts and leases. we will always be indebted, at least for the term of the leases. >> i would like to say on behalf of the commission, thank you. you have given us good advice and have kept us on track. thank you for your dedication and professionalism for the commission. i think we have a plaque to commend you. hopefully you can put this in your office. [applause]

i have a lot of help here. i would like to read the plaque. the port of santos go with gratitude and french ship, robert bryan, port of san francisco, february 2012. [applause] >> thank you, commissioners. i really do not have much to say. i have not really prepared anything.

i really do not think i deserve this, actually. i am just very grateful and thankful for the opportunity to serve you for the past six years. i must say, it has really been a pleasure. you are definitely very professional and it easy to get along with commission. that is a bright spot in my life here. i would also like to say to the staff, from monique, down to everyone that i have worked with, we have become somewhat of a family. i am glad we had the opportunity to work through some things. we have some tough spots, but that is what happens with families. we get close and we try to beat it out. we have done that. i really enjoyed working with you. i wish you all the best. there is never a good time to go, but it is nice that the port

is as busy as it is. that is merely good considering where rich are in the economy with the country at the time. i have reason to check and from time to time, legitimate excuses. i am happy for that. thanks to everybody. [applause] >> monique, would you like to introduce robert's replacement while she is here? >> thank you. eileen malley will be the new general counsel at the ports. you can do -- see she is very athletic, so she should be able to keep up with us. i should probably do more than

that. she is the deputy city attorney on the administration of the city attorney dennis herrera. most recently assigned to the treasure island development authority. we are really happy to have here -- heard here today. she has some experience working with us on prior projects and has a breadth of knowledge and experience on the real-estate side. how about that for your resume on the fly? >> that concludes executive director's report. >> public comment. >> good afternoon.

susan reynolds, deputy director of real estate. we are going to miss you, robert. you want to thank you for all of your help. i know we have had a lot of struggles, but that is how we proceed, and we have made a lot of progress in the last couple of years of your guidance. thank you very much. you will not be able to shake us because we will be getting some of those redevelopment leases back. we look over to a continued relationship. thank you very much. >> robert, i want to thank you so much for the past couple of years at the port. i think you have done an amazing job getting us better at contracts. we have always needed that find attention to detail that you brought to that effort. i think the port is much safer for it.

on a personal level, i get to wander into the city attorney's office on a fairly frequent basis. brainstorm new ideas. i wanted thank you for not laughing the out of the office on a regular basis, but instead taking seriously the concept that we come up with as a team to benefit the port. with respect to the redevelopment agency, that new position you are headed into. you are uniquely qualified with the development experience here at the port, your best contract experience. they are very lucky to get you. we wish you well in helping to shepherd that agency into new life. >> thank you. my office door will always be open. [laughter] >> is there any further public comment on the executive director's report? >>item 8a.

request approval of the port's biennial operating budget for fiscal years 2012/13 and 2013/14. item 8b. request approval of the port's proposed $22.4 million capital project budget funding for fiscal years 2012/13 and 2013/14. >> so moved. >> second. >> any public comment? hearing none. all those in favor? resolution 1215, 1216 are approved. >> item 9a. informational presentation on the port's proposed 10-year capital plan for fiscal years 2013-2022.

>> good afternoon, commissioners. i am the special projects group. i have been one of the principle authors of this document for the last seven years. this is the seventh iteration of this one done under the direction of the special projects manager. before i go on, i, too, will miss robert bryan. one quick story about some of the things we get into, at the army corps of engineers, the demolition of pier 36, which will appear in the capital plan, they changed the federal boilerplate. the port believe that they changed it for the entire country. it was a long one but we got there at the end and then ultimately sided with robert.

i will start off with some process. section 2.3 of the city's administration code is what drives the city generation of the capital plan every year, at least until last year before they amended it, to have the city administrator bring into the board of supervisors every other year. this year, staff thought it was a good idea to bring it before the commission because there had been a number of big changes. additionally, at the last capital planning committee meeting, members of the board of supervisors had requested a mid cycle update. cpc has requested that port staff present on monday march 5. we will be presenting their with the provision that this is subject to any changes before

final approval. for process, this is the second year we have worked with an integrated process for evaluating process -- projects. the two-year budget and five- year financial, 10-year capital plan. i know this slide is eligible, but think of it more as a graphic. it plans out the funds over the 10 years and the first two years cause of tooth capital plan, and so on. it has been a good process and we're looking forward to that. the evaluation criteria we used to review it capital projects is also integrated, whereas before, there were different processes for the capital budget, a capital plan. now they are the same. we came up with a collaborative

consensus-based process, weighted out of 100 points. the first few, 35, containing liability, 35, the mission, the final balance, considerations. through that process this year there was a fair amount of talk and some consensus that we will be real about the wedding next year to rebalance the criteria based on the apparent need to shift towards more revenue- generating projects. planned context. this is something new this year. to provide some sense of where the plan has been, where it is going. again, this is the seventh iteration. the shortfall, in red, is less now than it has been in about

five years. looking at this graphic down here, there looks to be corresponding peaks in funding and on the need side of things. that is coincidental. the spike in the estimation of need was a result of the port changing its software modeling it uses to estimate overall needs, shifting over to the program the city uses. on the funding side, that is a result of infrastructure legislation. the peace in the foreground, the next slide, is a breakdown of that. the various funding sources that go into that. what jobs out here is how much the proceeds matter in the future. we have good product one year, not so good a couple of years later, as we have a relative

experience with. the static nature of the port's own capital funds. this table here has the data that make up the slide that you just saw before. it is a simplistic way of looking at it graphically. that red diagonal line is where we want to go. as this table expands, we want to add new sources of funding to expand where we are getting funds, not only grow the funds that we have. hopefully, next year we will be adding transferable development rights. that is the larger context. changes to this year's plan. we had a consensus at the staff level -- the way we had previously been display numbers in the report in the 1000's -- conservatively might give a false sense of specificity with

the kind of estimates we are doing. it was to present things in keeping with the america's cup planning the we have been doing. that was a change that had been long coming. the plan context part of the port itself, we will maintain that. that adds a lot of value. this is what happened to our overall estimate for the year. largely driven by the 3.5% cost escalation at the capital planning committee generates. 3.5% his representative of what has been for the last 10 years. last year, 1.5%, in their early years, as high as 10%. i am sorry. this is out of alignment. this is a breakdown of regionally of the six waterfront

areas where we are -- where our need is and how that has changed over time. what jobs out here is the northeast waterfront and south beach has decreased by the potential amount. those are the results of revised estimates, particularly, seismic estimates, where we gained certainty about the use that will be there. for piers 20, 29, the cost had been derived from the potential development there. now we know it will be a cruise terminal, port engineers could look at that and say it was suitable from a suspect point of view. that resulted in a reduction of $40 million in that region. having looked at enough tables, i thought this was easier on is, -- eyes, looking at where our need is. southern waterfront, probably

not a surprise, that is where the bulk of our need it is. an import-wide category of cost, which is home to our dredging cost, which has gone up dramatically as a result of increases in the industry, cost. this explodes the funding sources more, in previous terrorist it showed federal funding in some of the individual agencies. what jumps out, what is worth noting, the exploratory and development projects, $205 million provided to port facilities. next year, that will fall off the ledger, as it were, because the project will be complete. our funding sport -- sources will take a big hit. but we will also take the need off the books because we will have done that repair.

$68 million of that is for maintaining good repair with the balance being an enhancement of that facility. enhancement versus state of repair. this is a breakdown of the $956 million in funding we are programming over the next 10 years. that ratio, 20%, 72%. somewhere between -- between a quarter and a third will go to enhancing assets, a two-thirds going to maintain existing assets. that is keeping with other enterprise assets. we have heard from the capital planning commission, airport, and mta. they reported a similar ballots to how they spend their funding. we feel like we are in keeping good company there. the 31% of the overall need funded comes from the state of good repair. the funded enhancements to not go to our need.

that is above and beyond we need to maintain our facilities. potential new sources for the plan next year, transferable development rights. this would allow us -- this is my seventh iteration of the plan. i did not expect one day we were going to say we are going to sell air to make this plan work. but that is what we are proposing. four historic structures, piers 20, 26, 28, potentially millions of dollars coming out of this to transfer vertically. lastly, we will run through the waterfront quickly to show how the funds are distributed. this is a blow up of the legends. fisherman's wharf is characterized by many longtime tenants with long-term leases.

they are responsible for the maintenance of their facilities. i should have breakfast this report by saying, this presentation matches the report finalized on friday. some of the red that you see here listed from the acea may not be accurate. an important point on this slide is the camouflage color, the federal funding of pier 35. the army corps of engineers is the case study for the long term for that to planning. there process with a two fold authorization process and two fold oprocess, it would take decades to get to that money. the plan is helpful in that respect. ferry building area.

multiple sources at play there. there is an award for most conspicuously out of date slide. this would be a good candidate. the brandon street wharf is a good example of how different sorts of funding come together to complete a project. that is a good success with the corps of engineers there. china basin. that strip of orange, bayfront park, that project has been completed, but i left it in their just to point out the 10- year capital plan as a tool is what made it possible for us to get access to general obligation bonds at all. it was a first for the port. that happened a few years into the generation of this document. lastly, southern waterfront.

i will end with this as part of a trip across the water from with this thing that looks like a doodle on top. that is the queen street -- quinn street lead. that plays an important role in developing a robust export terminal at pier 24. that has been a long time physical impediment and organizational impediment to doing that. while the track is substandard, it is also owned by the railroads. with this $3 million in funding we have to repair this track, it has brought the railroads to the table and has got them engaged with how they will commit to move lots of freight through their by locomotive spirit it has also given the project some profile. that project with a fair vote -- federal railway administration was the top scoring project

nationwide. we're hopeful it will continue -- contribute to this longtime steve chaid -- strategic report. i will conclude with pointing out with this planting is done for the port over the years. guided $95 million in development. non-developer investment, i am sorry, $95 million investment in non-developer investment. to getting access to general access obligation bonds. the 34th america's cup bid. it will continue to evolve as needs demand. i am happy to answer any questions you have got. >> is there any public comment? >> i think i went along. i am sorry. >> commissioners? president woo ho: i just want to compliment the staff on of the work. getting your arms around all of this and presenting it in a

logical, understandable fashion, slicing and dicing it the way you have, makes it very useful. maybe one of these years if you stick with it long enough, you'll come back and the total number will drop some how. [laughter] i have not seen that happen since i have been here and you started the project, which is a little discouraging. i commend you for going out and continuing to find new sources. very well done. >> thank you, commissioner. >> concur. >> ok, thank you. >> item 9b, informational presentation on proposed ports policy, it designating annual operating funds for 10-year capital plan expenses. >> good afternoon. deputy director of administration andan