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 ju 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 a 3 ft. to 7-foot sidewalk, sometimes absent in some places, we would have a new 16-foot sidewalk, and

depending on the land use, a cafe with outdoor seating, as there is today. it would be more of a public plaza with seating and an entrance to the retail store. supervisor kim: is this something that the residents there could do immediately? >> they would receive revenues from the space, so we would encourage the and design that into the project. supervisor kim: and i am not sure who this is a question to, but the remaining costs and the remaining funds, where do we imagine that we will be pulling these funds from from the budget analyst's report, it said general funds, but i am curious about what some of our thinking was around where we think the sources of funding will come from? >> deputy budget director with

the mayor's office. thanks for asking that question. currently, there is a request into the capital planning committee to fund the project, and there is a general fund cost, although it would still come back to the committee for review in the future. the mayor's office is definitely committed to making this project happen, but we are absolutely interested in reducing the cost impact to the general fund, and part of that is in the design phase, trying to find ways to deliver the project without taking on any costs that are not absolutely needed. we are working hard to identify other possible funding sources. one possible source could be that the area has an allocation which is designed for each district, and using their criteria, it it could be that they have some contribution from that source. additionally, we will be looking hard at whether there are grants

which could be used to fund this, whether they are state or regional, or whether they are related to waterfront-related use, for example, so this is something that we have to be working hard to identify through the budget process, but i think the importance of having the design phase begin as soon as possible is why we are coming to you today and not having this as a combined package. supervisor kim: thank you. and terms of follow up, using granite for the streets and sidewalks, i think that is something that is not a good use of our funding. it does not extend the useful life. we get plenty of other needs in the city. i cannot possibly imagine the granite sidewalks or street resurfacing. i know that is something that the department will look at when it does come before us if it does come before us, but i do not even know why we proposed

that to the capital planning committee. it seems we should have at least had the initial betting, where we might have $8.70 million that was put out in terms of the report, but we would not approach the city government to say that we will fund a project that proposes granite street and granite sidewalks. that is not reflective of where we are with our budget at this time. and second, in regard to the funding source, for many of the big improvements that we have had in the city, it seems that we have been able to leverage many other funds to accomplish them, so in addition to general funds, perhaps we are able to receive other funding, whether it is federal or not to create better spaces for the city. in this situation, we are really not looking for that, not of the looking or that. given the time that we're looking at, realistically what is going to be the possibility to pay for and leverage these

improvements? >> i will address the first concern first. supervisor chu: that was just a statement. i hope that that comes out, at the least. >> the reason we have options on the table in terms of cost, i believe that second and third options do not include granite streets. supervisor chu: the second one does include granite treatment. option three does not. >> there are components. but those are still preliminary. part of having this is to clarify what our options are. it may be that we do not choose any of these. at capital planning committee some have brought up that it is more important to have additional sidewalk space rather than the materials. those could be customized throughout the process. in terms of the desire to identify other funding sources,

you are correct, we are on a tight timeline. this project is the first phase of a longer-term project. this is identified in the better streets plan as a special st. plan that has economic benefit and is something that visitors to the city see and something that we hope residents will utilize more fully. i think that we are able to identify possible grant funds or other funding sources that we are able to scrape up to pay for the project. if not, we will continue to work for those -- look for those in future work. to clarify, the $8 million is only phase one. we are not talking about phase two, correct?

>> correct. it does not include the blocks involved. these were selected because of the minimal impact on the tracks that currently run through the area. these are places that saw the possibility of making the changes that we wanted to see happen on the street delivered in time for the america's cup. if this was an improvement we were committed to seeing come through, on a timeframe that would have additional benefits where there is a better viewing area for people, in the america's cup, where there is a possibility of fulfilling plot from the commitment -- fulfilling the commitment from them, with a safer location or visitors to the city. supervisor chu: supervisor avalos? supervisor avalos: but we have identified for construction is significant.

related to the america's cup, has this been accounted for? is this part of the hidden costs that are part of the america's cup that come before us? that we will be looking at proving are not somehow being accounted for? i see senator campbell standing up. you did a lot of analysis on the sources. >> costs for this project were not included in previous estimates. supervisor chu: -- supervisor avalos: i say that because i know there is a great deal of work being done by the city to prepare for the america's cup and i see the value of that in terms of making sure that we get the site ready for all of the visitors hopefully coming. i look at parts of san francisco that have tremendous needs around pedestrian and bicycle safety that do not get this attention. that is something that i see on a daily basis in major

thoroughfares in district 11. but there are many places around the city that have the same issues. sunset, the richmond, the bayview, the valley. i do not see where we get the same kind of treatment when it comes to a capital plan in terms of how we will move forward with making these improvements. when it comes to a capital plan, there are some things that sound like a new aspect of the capital plan. it sounds like a lot of deferment going on. what are the things that will not get done because we are putting these investments here? that is a rhetorical question. there are a lot of things that will not get done. i feel like it is something that i feel compelled to say. that this is something that people in parts of san francisco who are far from fisherman's wharf, who see the trickle-down benefits of the activity in san francisco, they do not necessarily see the

investment in the place is needed in parts of san francisco. there are all sorts of folks who are part of this discussion in that it is important that we recognize, as a city, that we are not looking equitably and how we deal with pedestrian safety issues in san francisco. even when it comes to our streets, we can make an equal amount per district in terms of what we will receive for benefits, but even that is not equitable. there are a lot of places that do not get the types of attention that we get in other places in san francisco. >> i definitely wanted to address the america's cup report. it shows the emphasis that i've brought up. in terms of the america's cup, it is more the time line that has been impacted. doing this now as opposed to the budget process and matching that timeline. this process has been in the

work -- in the works before the america's cup was thought of as an option for san francisco. there have been excessive planning processes and a lot of work to rally the community together around this. we have viewed this as an opportunity to deliver the benefit and that sort of leverage that with the additional benefits that come with the america's cup. i do agree that this is an area that has incredibly high pedestrian counts, completing the bay trail, making a save in both directions is a benefit that will extend far beyond the immediate neighborhood here. as with different -- as a san francisco neighborhood -- resident, i would hope that it would be some place i would

choose to go more frequently. supervisor chu: i really want to thank supervisor avalos for bringing that up. it has long been a frustration that i have expressed myself. had it not been for the america's cup, perhaps you would not have this sort of short and the timeline, though it is sort of our own imposed deadline. there is no other reason, other than to make it more safe, knowing that there will be a large number of spectators individuals who will be there. but this is really -- how would you szeged? the opportunity of the america's cup -- how would you say it? the opportunity of the america's cup has allowed this project to leapfrog other worthy projects. that statement needs to be made. it is not lost on any of us, given that many neighborhoods do not receive the same attention, given that we are not in dense areas.

i think that that is something that is important to acknowledge. in terms of the process, i think that it adds the message of what is an equitable project and allocation to focus on across the city. without a cb b two convene the process and report to say what a vision my book like, will that report -- create a commission -- a position where we do not have the opportunity to move things forward more expediently? that is a big question in a big concern of mine. i just what to say that. even though i may see that there is a benefit in terms of this pedestrian safety component, i do not think that we are the thing at this equitably across the city. supervisor chiu? supervisor chiu: colleagues, i want to let you know that i am absolutely

committed to figuring out equitable commitments around the city regarding streetscape issues. can you pull up a multipliers on the revenues that we anticipate what we do this? supervisor kim: and is it possible to have someone e-mail this to us, so that we can look at it? supervisor avalos: can someone do it from your phone? >> i would like to be mailed [inaudible] -- e-mail [inaudible] supervisor chiu: supervisor avalos had asked if there were other projects like this related to the america's cup that we had not accounted for. as far as i am aware of in my district, there are several that border america's cup boundaries. this is one in district 3 that we are looking to move forward

with as a part of the america's cup plans that the budget analyst analyzed. i certainly want to understand it equitable funding issues. something be have to keep working on. i agree that with what we passed in november, the idea is equitable distribution makes sense. i will, again, i need to reiterate that this particular street and this particular project is truly iconic in special. a street where 10 million tourists go. there are very few corridors in the city that can match that. also, in addition, this is a street that we know a little bit of investment, $5 million or $8 million, is going to result in future city revenues coming in with conservative assumptions. making this assessment, we will be able to see a future revenue stream that we can use for future streetscape project

around the city. this makes it different and a different type of project from others. i do appreciate the point of the fisherman's wharf and the work they have done. frankly, there were a lot of questions about this project and i want to thank cbd for the work they did. everyone understands how important this will be. not just for the fisherman's wharf, but for the entire city. neil, could you show the multiplier effects on the screen again, so that we can see those numbers? up if we could get with sfgovtv? again, if you see the numbers at the bottom, there is simply a 5% increase in tourism that leads to an additional $3 million per year of city funds that come into this. it is possible that we will see

much higher benefits, in which case we did see an additional $13 million per year in revenues coming in. i think that that is a pretty compelling reason that sets us apart from other projects. supervisor chu: thank you very much for your comments. in response, i think that we have many noteworthy faces across the city that deserved attention as well. great highway in the ocean brings two million visitors each year. i think that there are opportunities to be more equitable and do this process across the city, perhaps changing the way the infrastructure looks. clearly, we are not fisherman's wharf, but we have opportunities there as well. before we take public comment, let's go to the budget analyst report. >> madam chair, members of the committee, on page 5 we have no. 3, the general expenditures made

from this $962,000 for design related costs. the funding source is strictly interest earnings from state bond funds that were allocated to san francisco. the interest earnings, this appropriation includes a controllers reserve of 52,600. that portion of the interest has not yet been received. on page 6 of our report, as has been referenced, we notice that the budget that they provided, then that budget is 255,000 by hundred $38 less than needed. -- $255,000 less than needed. that is why we made a recommendation to reserve the $255,000.500 -- $255,538.

we said that we would consider the approval of the supplemental appropriation to be a policy matter for supervisors, because the city's capital planning commission has not yet recommended funding for construction of a phase one of the jefferson redesign project. we are simply pointing out to the board that, as has been very clearly stated at this meeting today, there are still construction funds of up to, at least in the data, up to $8.7 million that will be needed in the first phase. supervisor chu: thank you. a question, do we have any numbers about what phase two could look like? was that available? >> chairman, the budget legislative analyst's office. there was a rough estimate of

$15 million for both states. it was thought that that was the best number that we have. supervisor chu: $50 million? >> yes. supervisor chu: thank you. let's open this item up for public comment. are there members of the public that which to speak on item number two? >> good afternoon, supervisors. i am with the san francisco bicycle collision. we are very supportive of the public realm plan and the jefferson street project in particular. you have heard all of our reasons. basically, there was a gap in the bay trail. right now, you can rent a bicycle at one of the many rental facilities that are there, but you cannot bring it back to the bicycle rental company. which is frustrating. it is probably the densest bicycle rental market per square foot in the western hemisphere. more are being rented -- rented

there that i know of. by itself, it is an enormous economic engine as a tourism industry aspect. based on that area of the business, this is an important investment. it will be important for the america's cup, important for all sorts of reasons that we move people through their. i totally agree with all the points on equity. we have streets that are in bad condition that need investment. on behalf of a coalition, i have been persuaded by the economic multiplier argument. we like to thank, and we believe that it is true, that bicycle business is going to be a giant piece of that economic multiplier. we hope that you will support this, and we look forward to having visitors and locals in joining a better jefferson street. -- and joining -- in joining --

enjoying a better jefferson street. supervisor chu: thank you. next speaker, please. >> ♪ i am just trying to be friendly budget committee glad we did meet and i hope you get all the money all the money you seek hey, hey, you are the budget, never know where you will be found and i know you are going to help this roadwork in this city taliban -- city town ♪ supervisor chu: thank you. next speaker. >> good afternoon, supervisors. my name is douglas ya. listening to the discussion on this item, it seems like we are spending close to $1 million or

two city blocks. seems a bit rich, given the current conditions. the supervisor makes a good point that other parts of san francisco had been neglected, financially. just by the fact that they even considered granite, why not go for gold? why just settle for granite? let's go for gold. especially when we have read china to support us. what is a few million dollars? they can just give it to us. it is kind of like chump change for them. number two, if this project were so important, i would like to ask whether the board president tesjukin considered this project in his time. seems like everyone is in a

hurry to spend this money for two blocks. are we going to repeat the same mistakes on the central subway? if i remember correctly, that is a lot of money for such a short distance. i do not have the time to figure out the cost per block on that fiasco. thank you. supervisor chu: thank you. are there other members of the public that wish to speak on this item? seeing no one, public comment is closed. supervisor avalos: thank you, everyone, for your presentation to and work on this. i am comfortable moving this forward, but without recommendation. my not wanting to but recommendations behind this is that while i see a value to

putting infrastructure in this area of some of -- of san francisco, it is not the type of development that i see being put in place in different places of san francisco that needed as well. i think that seeing a statement about moving forward with our recommendation could help to temper that argument. there is not an overall budget yet and i would like to strip out the budget construction costs. this could come forward at a later time. it seems the cleanest way to move forward.