for funding -- the result in the most efficiency, generating the most appropriate behavior. the best utilization of the system, and so on. i am not losing track of your mention -- i think this is a fundamental issue. we have been involved in every step of the deliberation, with meetings attended by several members of this board, to talk about the principles, the san francisco strategy in -- and in all of those meetings we had the housing component because we understand that you cannot have a balanced transportation system without housing in the picture. and that this needs help, and that this is an interesting

process to achieve this through investment and infrastructure and investment in housing. we cannot use transportation funding to pay for housing but we can do a whole lot to generate the conditions, whereby we can incentivize the developers to build the right kind of housing and transit. to generate more bicycle activity. this is really a short summary. we have spent some time bringing you up to speed on the committee level, in how that issue has been dealt with. >> the range of diversity -- >> if i may intervene here, i would suggest that we have a follow-up discussion where we can have a more in-depth discussion, and the issue of

sustainable communities is not on the agenda. i'm not want to go into in depth. but a lot of work has been done and i know that the chair will be following up on that. maybe setting up something in the near future. with all the steps that we have taken. >> is there any member of the public who would like to speak on this report? public comment is closed. can you call item five? >> award a contract to rossi builders for the intended improvements for the authority work space at market street, and the terms and conditions, an action item. >> this item came before the finance committee. and is there any member of the public who wishes to speak on

this? public comment has closed. >> commissioner? >commissioner avalos: aye. commissioner elsbern: aye. commissioner kim: aye. commissioner mar -- abscent. the item passes. >> can you call item six, to execute a memorandom for the office of work force development, in an amount not to exceed -- for phase two of the persidio project for the terms and conditions. >> does anyone wish to speak? the hosue hause aged.

commissioner chu: aye. commissioner farrel: aye. commissioner olague: aye. the item passes. >> item seven, the amount of the professional service projects. this is not to exceed -- [unintelligible] for the better market stret planning, authorizing the terms and conditions. this is an action item. >> commissioner kim? >commissioner kim: had a couple of questions about the better market street plan, and the overall goals of better market street. we have seen the outcomes of

some of the work and planning that we have done so far. i know that the grant increase is going to be paid for -- in a way that is not coming out of the fund but i want to ask about how the scope of this project has increased, in saying that the scope has become more complicated but not explain why. >> i know that the amounts involved are definitely a lot greater. we could have -- >> i am not certain how much has been spent down of the $90,000 that has been allocated. >> mr. moscovic? >> thank you for the question. i will let her answer on the details, but i have been

tracking this issue personally and i have energized couple of meetings with the department heads involved in this. i have had my own concerns about making sure that -- that we stay with the schedule that is reasonable. and that we show the public we're making appropriate progress on this. this is a rather substantial increase. it does not matter about the other funds. these are the funds that you can deliver on. we address the details of the scope. >> the increase in hundred $70,000 has primarily been necessitated by their greater complexity of the project. and the additional agency side,

the work that has had to have been organized in terms of the response system and the issues that have been recovered. presses here to respond in more detail, but there is nothing with the actual scope. the second questioner mate -- relates to how much has been spent. this is about $530,000 or so. >> can we hear from the project manager on exactly what we need by the complexity. leading to this increase. market street is a one-of-a-kind corridor, in san francisco and in north america. we don't have a street with this kind of transit volume, and the public need we are attempting to address.

as we enter into the project with what we consider is the traditional model, we realize that this is a very complex project. with the consulting team -- >> commissioner? >> why could we not anticipate this? and why would we approach this with the traditional model? >> we did this to some degree, but when we look at the size both on the city side and on the consultant side, and all of the studies that we needed to gather to move the project forward, we realized we needed to take a step back and look at the items in terms of transit and transportation, the public realm activation, that we are attempting to incorporate with the office of workforce development.

this is an unprecedented effort for us, and in order to get the right product, we needed to look at the complexity. >> can you go into detail about what this means? we are increasing the budget of this project but i don't know what this means. what is this money going to go towards? >> this is going to the completion of the first part of conceptual planning. this is really -- we started off with a budget that was perhaps a little too stringent, and a very aggressive timeline. we have been targeting 2015 to lever the project. the combination of these things and attempting to gain multiple agencies buying in early. we have all of the right team members for the agencies.

very early in the project to understand a lot of the technical issues before we move the project forward into more detail. this is something that does not always happen. i think we underestimated that effort a little bit. >> if i don't have specifics about what the money is going toward, to me, this is a very vague understanding of what this money is being used on, and half of the budget has been drawn down for the consultant. i want to know specifically what we did. how many outreach meetings and how many hours. i don't feel comfortable with that at this time. >> we could use a little detail about what the project is, because we have conditions in

best practices research documents, and we also conducted the first round of our reach last year. we will be moving into the second round of community outreach later this spring and early next summer. this will be up to three concepts for the corridor and we will move those kinds to the environmental. >> maybe i can ask this question this way, what are we getting with $170,000 increase that we would not otherwise get? >> the ability to move the project forward on the schedule, in order to meet the resurfacing deadline. the scope of work has not changed. this is allowing the consultant team to have the proper resource and to move this forward. >> mr. moscovich, maybe you can provide more specificity. >> these are not easy answers.

but let me give you my most candid assessment. what you are approving today is remedial funding to deal with the realities of moving the project that is as complex as this is, and you ask a very incisive question, why was this not anticipated? we probably should have anticipated this in the overall structure of the project, with what was considered in the original budget. this is a failure we need to own up to. a project that is managed jointly, by number of agencies, i am part of the steering committee that includes the heads of the other departments. i think we should have been meeting more often and pay more attention to this.

this was behind the changes in market street, and i was there eager to see progress here. the reality is that we have a powerhouse consultant, who has done very good work in other places, but this is always a challenge in san francisco with the multiplicity of agencies, and the organizations that want to be part of the process. i think that finally, we now have reached an agreement with the department of public works, for a full dedication to this project, and doing a tremendous job under arrest. this is what brings us to the place where the consultant has done very important work, that

at times has tried to bridge the gap in communication and in the building of consensus, down from the public side. we have in place, -- a rock- solid commitment from the department had to steer this effort to the finish line without any excuses. this is essentially what we're doing. and this is the last installment of money we need to make this happen. that is why i felt comfortable bringing this to you for approval. i believe we do have a commitment to finish this thing on time. we also have insisted on a very thorough documentation of the options that have been studied and discarded, because we know that they will be parts of the larger discussions, and this has necessitated a little bit more time.

but this is not to create a different product, this will create the product we promised you in the first place. getting projects like this done in san francisco, i do not have any other explanations. >> let's hear from commissioner weiner. >> commissioner weiner: i will be supporting this product -- project, but i want to repeat something i said at the finance committee. when we talk about a project of this scale, transforming market street or high-speed rail or whatever the project is, i do believe that the mayor's office needs to play a coordinating role, otherwise there are a lot of departments involved that are all very talented people, with the best of motives and

sometimes you not know who is in charge. without that clearinghouse role by the mayor's office, we may run into some confusion. when we have discussions about staffing at the mayor's office, we will have the capacity to play the role, with a lot of different projects. >> at that point, this is part of the involvement of the mayor's office? >> the mayor's office has been involved in the process. we're happy to have jillian attending the meetings. and there will be a force in moving the project forward.

>> i am not trying to be difficult. just for me, but i have been getting for my office has been vague around market street. there are the specific outcomes of the work that has happened so far. the average of the environmental analysis, this does not mean a lot to me. if you look at what the architects have done, with all the surveys and the block by block conditions. this is the kind of explanation i would need to understand what the budget is being spent on for one of the outside consultants. i am not comfortable with this moving in terms of my own support but i understand the project's cost increase -- especially in a project that is as complicated as greater market street. i do understand why this is

moving forward. >> why don't we open this up to public comment. is there any member of the public who wishes to speak? >> public comment is closed. do we have a roll call on this item? commissioner avalos: aye. commissioner cohen: aye. commissioner kim: aye. commissioner olague: aye. the item passes. >> we can call item eight. >> amend the adopted fisxacal year to increase the budget and expendatures by $1 04,501, for an increase of $13 million.

this is an action item. >> is there any comment on item number eight? we will openness to public comment. is there a member of the public who wishes to speak? public comment is closed. >> avalos? >> aye. >> chu? >> aye. >> chiu? >> aye. >> elsbernd? >> aye. >> mar? abscent. the item passes. >> we can call item nine. authorizing the director for annual contract renewals, for an amount not to exceed -- and modify terms and conditions. >> any questions ion item 9?

any public who want to speak on this? colleagues, same house, same call? item passes. >> adopt the fiscal year 2012- 2013, annual budget, an action item. >> any questions or commenets? any member of the public who wishes to speak. public comment is closed. same house, same call? item passses. es. item 11. >> this is an action item. >> colleagues on item number 11. any comments or questions. is there any member of the public who wishes to speak? public comment is closed. can we take this, same house,

same call? if we can call item no. 17, out of order. unless there is any objection to that. >> this is the information item. we have this on the request of commissioner winner. what's the metropolitan commission -- and the sustainability project is a very important project in terms of assessing how the transit operators can improve their operations, with more cost- effective and efficient way. and squeezing more service out of the limited resources that we have.

the transit operators around the region, they have been involved in this process, with the working group. and obviously, there are some disagreements -- to provide some incentives and accountability measures to make sure that they are addressing the cost structures. i will present an update about -- -- >> good afternoon. >> is the microphone on? if you can get close to the microphone, thank you. >> good morning, commissioners. it is good to be here, with the trans this inability project. this is a project that they

embarked on a couple of years ago, at the beginning of 2010. this has been guided by the committee of the commission as well. there is the transit and general managers, with the equity group as well as business representatives as well as business. these people have been meeting regularly to tackle this issue. just a little bit of context in terms of we embarked on the transit system's ability project. when they have the last long- range plan, what we basically were forecasting was significant operating deficits, as well as capital deficits to maintain the infrastructure for transit. all told, this was $25 billion so this is a significant challenge for transit.

in addition to what we were saying in the long-range plan, we were also confronted with the daily near-term issues, that the transit agencies were having to dress in terms of the budget deficit, cutting service, and coming here to look for finding solutions which i love cases resulted in us having to borrow capital money to try to address the near-term operating deficit. this is the reason we embarked on the transit project. just as important, and this can be seen as an opportunity or a challenge for transit, this long-term plan -- we have new requirements -- in terms of that

lay out the aggressive greenhouse gas reduction targets for the region as well as goals for being able to house all of the population. we will be putting a lot more people near transit, and we will rely on transit to be able to provide more trips for those people. we felt it was important to make the system more sustainable, and we would ask to do a lot more for the region. in looking at the project, we look at the project functionally from three areas, financially. the financial-services and institutional, the legs of the stool. we also looked at what is important for transit going forward. the first thing is to improve the financial position of transit, so this can be more reliable and less subject to

service cuts on the annual basis. we looked at the need to improve service for the customer. as well as being able to attract the new riders as we look at the long-range plan. we were reminded as we went through this that there is a lot of work that is already happening in the region, a lot of this in san francisco and elsewhere. there is a significant effort, by the transit management as well as labor to address a lot of the financial challenges to the collective bargaining process. and there are efforts focused on improving customer service, and the transit project is really aimed at that. we also say that there is a lot of good work that has been happening, and we felt that

obviously, there is still room for improvement, particularly in terms of being able to control costs, to invest the savings into more service. this is to build confidence with the transit system. being able to attract additional revenue. and how to improve the customer experience. this can looking at the financial elements of the project, -- and looking at the financial elements of the project, we looked at the past performance over the last 11 years, four transit in the region and what we saw, even after adjusting for inflation, there was over a 30% increase in costs over that time. at the same time, we were only able to put out 15% more service hours, and we were only able to

attract 7% more passengers. each step of the bar we lose ground, and going forward we have to reverse this trend. this leads to one of the first draft recommendations that we have in the transit sustainability project. to establish a performance from work. one thing that we have discussed is the performance framework in the area of improving financial performance, that would look at a 5% reduction in the costs per hour, and it would allow some flexibility to the operators, whether or not they want to look at costs per hour, and the cost for each passenger, acknowledging that this is different with the type of service there that they are running. we feel that this performance metric is achievable, based on a lot of work that we did that is

based on the opportunities for cost saving, with the area of work rules, and administrative costs. we also looked at how the operators were performing within some of these metrics. we see that some of these operators have sort of turned the tide, and are making some improvements and are on track in terms of the 5% cost per hour. in the first slide, you can see that ac transit and bart are getting close to a reduction in costs per hour. the other large systems are heading in the other direction.