>> thank you very much for that kind of deduction. good morning, everyone. i want to thank john, wade, steve, and the entire chamber for the invitation to address you. i know i am the last speaker, and after that panel i am eager to have to go back to work. sarah, thank you. cady, and george, very appreciative of the dialogue. as you can tell, when you hear about all of that, i could spend hours going through all of the tech companies what they are trying to do. ultimately, it is about job creation, and i get excited about that. it does keep me getting up very early, murder this of how i get

there. if i can create one job every day for somebody here in san francisco, that will satisfy me greatly. guess what? there are hundreds of thousands of jobs at stake. i will continue to make this my mantra because i think it is the right thing to do for a great city. i want to also acknowledge the members of the board of supervisors here today. they were announced earlier. we all work as a team and it has never been about the mayor, him or herself, and i have learned that working in concert with the board that we have clear tones of communication, making sure that we speak more and more in the language that is important for this city. language and policies and ideas that create investor confidence in this city. that is what i have been talking about more and more. we have got to have a city that

is investment-confident, that one -- that one does not have doubt. if it is your family, small business, someone joining another one's business, we have got to have that level of confidence to see things through for you, so your investment is one that is positively welcome, taking care of, and prosperous. that is how we get to the theme of today's breakfast of prosperity and sharing of that prosperity. i want to take a moment to thank my friend john. he has been at the helm of the chamber for the past few years. he has been an important aspect of the work that i have done over the years. as you know, i started at the human rights commission and then i went to purchasing, which was the most fun i have had. who could not have fun buying a

billion dollars in supplies every year? then the former mayor brown gave me the heart to work in public works, engage in conversations with everyone about what was wrong with our streets and making them right. it was in that toughest job that i had that i have a lifelong friends, people who care enough about the city that picking up somebody else's trash is nothing when you can work together and dream about how better the city can become. i want to recognize john because he is one of those few people who i can properly engage in trash talk and still talk about the city in a positive way. thank you, john, for your wonderful service. [applause] when i came to all of you a year ago, san francisco's on the planet rate was 9.5%.

we just heard a fantastic presentation by j.p. morgan and their analyst as to how we come about in making that change. at the time, we faced a $380 million budget deficit, and we were struggling on how to meet the increasing cost of our pension and health-care obligations. remember that discussion about our pension? we have come a long way. it is not even mentioned anymore but it is still prevalent, and so are our health-care obligations. one year later, our city, the supervisors, mayor, elected officials have all come together with the help of great city department leaders that are also here today doing everything we can to make sure that we tackle the pension issues and make sure that our budget is balanced. more importantly, we put people back to work. that is the most important thing all of us have joined together

in doing. in the last 12 months, guess what we have done? we created jobs for an additional 17,300 san franciscans, bringing our unemployment rate down from 9.5% to 7.6%. that is in just one year. thank you for your help on the [applause] at. -- for your help on that. [applause] two weeks ago, we got another piece of positive information, news on the economy. our revenues became $129 million in greater, than projected in the first six months of the fiscal year. that is wonderful data for san francisco because, guess what? for some years now, it has been deficit, deficit, deficit, no

increase, no revenue, and all of you know how wonderfully negative that discussion has always been. now we have some positive light. i stand before you today, just a year in office, in my first year as mayor, to say that the economic recovery is under way, it is a real, and economic policies and strategies we have pursued are working, and they are working well. our city could not do this without the partnerships of many of you who are here today. san francisco is back on track and but we must stay the course. what i mean is, even though our revenues have surged from the economic growth that our tech companies have provided, a traditional companies that have

been here for so many years. by the way, let me do this. i have been known as the attack may year -- tech mayor. how one thing that i have come here with, puget you have always been excited for the city. we come to you. you helped us on a tremendous number of thing last year. i want to thank all the members of the chamber as well. whether it is a wells fargo, a pg&e, recology, the numerous sponsors that continue to come here, you have been part of the life blood as we welcome in the clean technology and biotech. you want to make sure that we are growing a family steeped in tradition of people that love this city, that love every neighborhood, and who have experienced all the great

positive dialogue, but have also been concern about negative dialogue, sharing in every aspect of the city has. i know many of you have joined with me some weeks ago when we celebrated the 50 years of tony bennett and his wonderful song. we have much more to celebrate in the coming years. i hope you all join the chamber in making sure that we share this prosperity. having said that, knowing that our economy is improving, i want to make sure you know i will be at the home with the board, making sure we are not tempted to return to spending habits and short-term choices that got us into trouble in the first place. we have two-year budgets, a renewed sense of obligation and responsibility, talking about our infrastructure, things that allow our tech companies to be

successful. we have to solve some serious transportation issues in the city, and that is why at risk in and i spend hours saturday morning at a technology hackathon. not trying to create a new application but try to solve some traditional problems with our taxis, making sure that someone can get a taxi, rather than waiting in being frustrated, another aspect of our transportation issue that we would try to get solutions to. more than ever, we have to double down on reform, on innovation, an investment. that is why i will continue to announce we are the innovation center for the whole world, right here in san francisco. soon enough, there will be cited to reflect that in the city. we had to break with some traditional things from announcing that in the most broadway, letting everyone know

that this is the center for a lot of things to happen. reebok to keep that innovation strong, keep the dialogue, as the panel has been talking about, keep salesforce growing, twitter growing here, keeping us all engaged as technology helps us to solve many of our problems, and finding solutions that we have not thought about. once and for all, we must treat government and our responsibility as mayors, as families do, find savings where we can, reduce unnecessary spending, and importantly, in best. invest in our people and our infrastructure. as said earlier, i will continue to talk about jobs. i do not care if i'm called the most boring guy that got one thing. i will repeat. i come here every day to the office asking whether or not i created another job for somebody else.

when you learn about the statistics that sf city is sharing with us, if it is jobs for seven siskins, it is worth to get up early for, sacrificing late-night meetings, working on the weekend -- except my golf. [laughter] we are attracting tec, biotech, clean tech. we are supporting local manufacturing. we are going to be making more things. fashion is coming back. technology with passion will be an exciting areas that we can hopefully unleashed soon. i will also tell you this. there are areas that we do not pay attention to that are not only stable, increasing, and wonderful when you hear this, but did you know -- and i got this from the recent reports from our hospital council

recently -- did you know that our health care industry in san francisco generates economic impact of over $15 billion a year? our own health care industry. 99,000 jobs. that is a huge contribution to our economy. i do not want them to be silent any more. our health care needs are important, and we will be getting that cpmc job done very shortly, wade. [applause] with our elected officials and board, we need to continue to reform the peril tax. we have got to incentivize businesses to create those jobs. -- payroll tax. the conversation in the board has been very good because we have not forgotten those that are not skilled as well as others. we have got to get that employment training center up,

we have to invite those who are living in the tenderloin, amid market, south of market, the traditional groups that have struggled, they have identified issues in the past, the digital divide. they were not caught up to the lunch alt -- level of education and technology they needed to be. we have got to help our returning veterans get those skill sets. people who are in the middle of their careers get those skills sets. that is why employment training is so important. we need a stronger training partnership. we also need private and more public investment in our schools. i will be talking a lot about that with the new president of our school board norman yi, carlos, organizations at the school board. i will be talking about how our schools can participate in this employment training and make sure there are generations of

kids who do not lose hope in this city, do not look elsewhere when the best jobs are created right here. all i have to do is do their part. when they do that and complete their job education, that will be there for them. i want to say one thing about our infrastructure, something that i want you to remember as you leave today. i just want to mention something about hetch hetchy. some people out there are suggesting we can tear down that dam and still survive as a city. i want to let you know, as insane as it is, it is, in fact, insane. [applause] there will be some leaders that approach you, others around the city that suggest tearing down

hetch hetchy is a good idea. they will start talking about water sustainability issues. but know this. not only do we have the cleanest water, not only have we spent serious amounts of money upgrading seismically the whole system to deliver that clean water, but it is also one of the strongest clean hydroelectric power sources, it infrastructure, that any city across the country has had. i want to make sure you know that as this public dialogue begins. do not be misled on the discussions by people who will connect something that we want to have, which is sustainable water, but not by tearing down our dam. finally, i want to end with a discussion on america's cup.

yesterday, we made the announcement that pier 30 and 32 are no longer part of it. i think the public discussion and discourse around the investments that we do need to rebuild the piers, including the horrible conditions at 30 and 32, it got away from the focus, which should be on hosting the 34th america's cup, one of the greatest sports event we will see. it will probably be the only international sporting event and all of 2013 in any part of the united states, and it is coming here to san francisco. it will be a blend of technology, with boating, will be viewed by new technologies to introduce us to generations of new sailors, and using our waterfront and bay in the right way. i spoke to larry ellison directly for a good few moments.

we reiterated our excitement about the race. it is on for this year for the smaller boats, next year for the larger ones, and we do expect hundreds of thousands of people to come to our city. we have figured out, through the work of the event authority and host committees, all the different plans we have to use properly our open space, transportation lines, making sure we create positive then use. i want to let you know about the change in investment and topic this course is a very key reminder of how sensitive we have to be to this whole dialogue about investment. it can go different ways. the thing that i need to make sure we do at the board of supervisors, mayor's office,

keep a strong foundation for economic growth in this city, keep talking to audiences like you and others who can help us, talking to neighborhoods, making sure the dialogue understands and job creation is still in the misdirection. this whole theme today, prosperity together, sharing it, is consistent with what i have been saying throughout the city. we are the city for the 100%. we will work together. i will make sure the city's discourse is positive. we will not prevent the foundation that provides us with economic growth. let's move forward together. thank you very much. [applause]

chair chu: the, and welcome to the regular meeting of the san francisco budget and finance committee. my name is carmen chu, and i am the chair. joining us today include supervisor avalos and supervisor

kim will be coming later. our clerk today is victor young. we also have people from sfgtv. could you please read? clerk young: -- chair chu: item number one. clerk young: i number one, a permit of a north feasting wall sign. >> when the city required the building, it also assumed all of the existing leases and permits on the building, which included a lease with cbs outdoor. they then sold the space for uses such as the one i have on

the overhead now. that continued until that particular lease expired naturally on march 31, 2011. knowing that that expiration was coming forward, and knowing the regulations relative to advertising on city property, the city issued a request for proposals from outdoors signage companies in the spring of 2011. this request specifically excluded advertising for alcohol or tobacco products, in any way, shape, or form, either direct or indirect. following that process, we had five potential bidders interested in this light. negotiations with the highest bidder failed to produce a permit and a fashion that the city was comfortable with. we then went to the number two

bitter, and that is what is before you today. total outdoor, west coast media actually tendered the proposal in the spring of 2011. the terms of the permit is an initial term that sticks out to the end of 2016, with the and 35-year options. those options are at mutual agreement. as i mentioned, they are we vocable. there are some writes about the city retains to terminate, and those have to be fairly extreme in nature. the payment stream is a little bit complicated. there is a base minimum guarantee of $63,000 per year. there is an initial bonus payment of $30,000 made during the initial execution of the permit, amortized over an initial term, and then there is

a percentage, 35% of any net over $180,000 per year that they might receive from advertisers, and then there is a tiered system we created, where in the course of negotiations, we learned that the elimination rights to the board were not documented to the degree that we thought they were, and in consultation with the planning department to see that the board does not have the right to be a eliminated, said there is no light at night. that $63,000 number i gave you is, perchance, the permittees should secure in the future the right to light to the board, the rate automatically bombs up -- bumps up over $100,000 per year, so we can capture that additional revenue we are not

sure we will see that, but we wanted to condition this based on that. lastly, i should note that the prior agreement was very rich for the landlord. it generated $250,000 per year. when we looked at the actuals, we had the auditing right. we learned in the last two years that we were frankly losing money on this board location. that market has not recovered, particularly for static signage, such as these, without the human nation's rights. -- the illumination rights. these are more reflective of the industry and the difficulty of securing high-paying tenants on these boards. so that is the essence of what is before you. this is revenue and helps offset the expenses of the buildings. this goes into a special fund that funds our operations within the civic center, specific

emission quarter buildings that are managed by real estate, and this is like any other rent paying tenant. those funds go back into the building operation and management. chair chu: thank you. just in terms of a question for me, in terms of the rfp that you said went out in the spring, you said there would be no alcohol or tobacco. is that in the current contracts? >> the expired contract? no, that was not the case. chair chu: that could explain some of the differential. >> it could, it could, but i am not sure. chair chu: and the first bidder use that went into negotiations with the city but are not in the contract that you brought before us. can you explain that a bit more? >> sure. the concept of the minimum

annual guarantee, we did not see eye to eye on what that meant, and when we analyzed the terms and conditions of what they put before us, it created so many potentials for a reduction as the landlord, we did not feel edmund minimum. it meant a potential, and when we looked at the actual minimum numbers that would be reasonable return, their ranking fell frankly to the bottom of those that submitted proposals. chair chu: thank you for the explanation. why do we not go to the budget analyst's report? >> madam chair, members of the committee, on page 5 of the report, we point out that the proposed permit would generate $93,000 in the first year. that is the minimum guarantee of 63,000 plus the 30,001-time bonus, and over the initial term, the permit would generate a minimum annual guaranteed of

about $324,000, and as mr. updike has indicated, there is a difference between the proposed annual guaranteed versus the prior minimum guarantee that cbs outdoor paint. it is about 73% or more less. the fact that cbs outdoor was one of the bidders, and they bid less than the proposed permit the, the total outdoor, i think that is a further indication that they simply could not cut it with that $240,000 minimum annual guaranteed. we recommend that you approve the resolution. chair chu: thank you, mr. rose. why do we not open this up for members of the, you wish to speak on this item number one? >> good afternoon, supervisors.

my name is douglas, and i have lived in san francisco for 60 years. i thought this was a very interesting resolution, and the thought that occurred to me is that maybe since it is located on mission street, in a heavily divorce neighborhood, maybe the city might get even more use of that space by using it for public service announcements that would benefit the different groups living in that area. it could be used to advertise different programs the city is trying to help people with and can also be used for sfpd, or whenever they would need the space for, and i think it would enable a lot of nonprofit organizations to put up information there without going in paying for such space, so maybe if this space is not that

a lucrative, since the top bidder did not really want it again, then maybe it might be more useful and more beneficial to the different communities along mission street to use some for our public service announcements and in this way, in a certain sense, it would not cost the city that much to advertise what it deems necessary to advertise, and it would also give the non-profit organizations a chance to say something to help the community along mission street. thank you. chair chu: thank you. next speaker. >> ♪ would you not fix it, budget, fix it night and day proved that is the only way the magic and the music gets to you, then just enjoy the money