leases of vacant land that are of 1 acre or greater. when you look at the current run, which is 22.6 cents per square foot and apply the 5% discount, we end up with a 21.5% discount per month rate. >> supervisor chu: the report indicated you talk about why it was impractical to go out to bid for tenants. >> the port generally, the practice is to bid the parking lot for retail space. we are aware of the requirement to bid all leases, but in this case the court deemed it to be impractical, because there is acres of vacant land out in this

area, and there are not prospective tenants inquiring about leasing the land. what we did was entered into direct negotiations with the tenant. it is a good, clean it use and they pay a good rate. for a tenant that is ticking down 6.2 acres of land, there is no one else knocking on our door. >> thing to appear yet tosuperv. it seems like this is one of the leases that was on a month-to- month basis, and there was a holdover project. i was looking at how to reduce the number of the month-to-month leases that we have. the bid of the original lease had expired and preventing as going to the system where we're doing month-to-month leases. the budget analyst report says 323 agreements were reviewed,

and of that number 163 were found to be a market rate. if we find these leases are up market rate, does that mean we do not try to move them to a more solid least and continue on a month-to-month basis, or are we still moving in a holdover project to move on to permanent leases, and for the approval? >> we're still working on moving various leases from month-to- month holdover leases to term leases. however, some tenants came up with a minimum requirement. this is because of the time involved with staff, a city attorney's office in drafting the least. it did make economic sense to

draft the lease for an economic term or shorter than a three- year term. if a tenant decided or advised the ports they did not want to enter into a three-year term, we kept them at month-to-month tenancies, but we increase the month. -- the rent month to month. there are some instances where they are still on month-to-month because of the fact they did not want to commit to a long-term lease. as mentioned in the budget analyst report, there are instances where the port commission approved a resolution authorizing month-to-month tenancies for underground utilities or construction laydown or shed leases on $5,000 or less per month. there are some of those leases and there also. and i think we started with this back in january of 2008, and we

have made good inroads. in some instances we have not approached tenants to renew leases, because they are actually paying more than the perimeter friend or market rent. so we are just leaving some of those status quo. >> when we will looking at a holdover these project, where we expected to have periodic status reports? the last one was on january 6, to the laws of 11. is there another one do? >> the administration has not really -- when i worked full- time, i kept pretty detailed records of that. now that i have been retired for two years and working two days per week, i am concentrating on getting new leases and not so much the holder for project. that took a fair amount of time to keep it up-to-date.

supervisor avalos: i think at some point, maybe the middle of this year, it would be great to get a status report. i do not know if that is your irresponsibility. that will be good for the port. that is something we can discuss offline. >> we can address that. supervisor chu: why don't go to the budget analyst report. >> on page 4 of the report, based on the port's current re nt schedule they will pay 11.42

less per month in the first year of the proposed lease. that would be a total reduction in the first year of $13,707. for the reasons explained on page 5 of our report explained by mr. raimondi, the proposed new lease would be are awarded based on direct negotiations rather than a competitive process. section 2.6-one of the administrative code requires leases of the property be required to the highest responsible bidder, except when bidding procedures are in practical or impossible. -- impractical or impossible. the terms are not detailed in the administrative code, so for that reason, although we feel we

consider approval the proposed lease to be a policy decision for the board of supervisors. supervisor chu: members of the public that wish to comment on item number four? seeing one, public comment is closed. supervisor avalos: i am comfortable with the rationale of but vacant properties nearby. it did make sense to put out an rfp for this. i motion we approve and forward to the full board with recommendation. supervisor chu: a motion to send item forward with recommendations. i would request the mayor's budget office perhaps work with the port to see when would be inappropriate time to bring back an updated report on the holdover police project. we can do that without objection. thank you. would you call item no. 5-8.

>> item number five, ordinance amending the san francisco administrative code by adding chapter 43. item number six and a resolution authorizing e issuance of not to exceed 170 million aggregate principal amount of san francisco transportation agency revenue bonds for the purpose of financing certain capital improvements related to the agency. item #7, hornets appropriating 46 million net of $35,000 of the 2012 series a parking garage refunding, and the appropriating 2,000,431 363,000 in orde1, 363. >> item #8, ordinance

appropriating 28,300,000 of the 2012 series b revenue bonds for transit projects and for parking garage project proceeds to the transportation agency in 2011- 2012 for improvements to transgendered access, reliability, communication come in capital improvements to parking garages. supervisor chu: thank you very much. these items are package. item no. 5 gives approval to allow them to issue debt. this is something the mta could do based on the 2007 proposition a item. item #six issues a piece of legislation to issue the amount of 160 million and sets parameters around the issuance. we have a number of amendments i believe the budget analyst has incorporated into the report. they are pretty standard amendments that talk about the terms of how long the bonds

might be outstanding in certain parameters amount of savings. item number seven, provides authority or appropriation authority for the refunding bonds, and also sets a controller's reserve on the pending a sale of the 2012 series a parking garage revenue bonds. finally, item 8 provide the preparation of 446 transit projects and one parking garage project. that has a comptroller reserve pending the sale of the bond. -- comptroller reserve pending the sale of the bond. -- controller reserve pending the sale of the board. we have ed reiskin and director of mta. >> good morning. happy to be here today to begin implementation of something that the voters saw as a need when

they passed proposition a back in 2007. i have a brief presentation, but i am sure we will have plenty of questions. also here is nadia from office of public finance, mark lake, as well of are soas our public fine department. i will walk through a brief presentation, and i look forward to the discussion. if we could go to the oslides. one of the things i think everyone knows, particularly those who ride the transportation system is we have a significant amount of assets and need. we estimated the 20-year need to bring all of our assets into a state of good repair to beat on round the order of $10 billion.

when i am talking about assets, but these are the buses, trains, reels come overhead wire and stations. the parking meters, signs, traffic signals. it is a pretty broad and almost daunting array of assets that we have that have a pretty significant price tag that have not been invested in the past. i think that is one of the reasons this provision was included in prop a to empower the mta to incur debt to make these investments. so what we are proposing come and you made reference to this, is the debt issuance. this is focused on state of good repair needs for the most part. there is reaail vehicle and restoration, track signal upgrades come overhead wire restoration come and a parking

garage items. the revenue control equipment for all of them, as well as addressing a wide range of long- standing capital means that they have it. we are structuring this in three series. the first two issuance would be this year, and the third would be next year. the first issuance is to refinance existing garage debt. this would save us money shown at the bottom of the chart. the sec issuance this year, and these other ones we are asking for procreation today, would be to start the design and construction of the balance of the projects. then we would come back next year for the third series that would fund the balance of the design, mostly the construction of the parking and transit projects.

we are structuring these as revenue bonds based on mta only. they do get revenue in the general fund, one set aside in one in blue payment. those revenues are not pledged again services. this chart shows up more specifically what the projects are, and what other funding makes up the balance. in a lot cases we are using this to fill gaps in projects. there are complementing or leveraging other funds with a

total amount of other sources with nearly $160 million that has been leverage by the sponsor of the total project cost is 276 million. it is largely a federal funds that we are leveraging, but we also have state and federal funds. all of the other sources are secure. these bond funds are the last puzzle for each of these projects. the projects are in different stages and different statuses. some are ready to go. this money would plug the gap. some are much earlier on in terms of being designed. they will mostly be delivered

through competitive chapter 6 process. we have secured ceqa clearance for all of these. for this week a parking garage improvements, we are working with dpw to take a preliminary assessment that we got from a third party consultant to work in a more specific work program and to help manage the delivery of that work. here is a high level overview of the schedule. these are in different stages of the planning design and construction. we are structuring all of this so that the bond funds will be extended within three years of their issuance. retiring to a number of budget

analyst recommendations come i want to thank mr. rose and his newman for a lot of work and a very comprehensive report. there was a lot of reiteration between agency and a financial advisor team and the budget analysts office. i want to thank them for the good work and recommendations, all of which we think are good ones and recommend for your incorporation into the final legislation. so finally, you have already laid out what the pieces of legislation are. one is a general authorization for us to issue the bonds. one is a resolution that authorizes the overall issuance come and then there are of the appropriations, one for the refunding and one of for the new funds we are seeking. we do of course request your recommendation to the full board for approval.

so we are stepping through the process. we have already been through the capital planning committee and on the projects and bonds developed at this point we would go to the rating agencies to secure credit rating. we are also starting the validation period, and we have already gone mta board approval for the issuance. we would go back to them to approve the official statement aiming to sell the bonds in june of this year. with that, i will stop there. the team and i would be happy to answer any questions you may have. supervisor chu: thank you for the presentation. supervisor avalos: thank you for the great presentation. just a couple of questions. first off, we currently have

revenue bonds that have been issued to do some of the capital work in the parking garages, so how does this -- could you go a little bit deeper in explaining how this issue winds will relate to the current revenue bonds and why the need to replace them is. >> there were these corporations established historically non- profit corporations established that had bonding authority, and some of them did issue debt to do various work in the garages. the debt is outstanding at a higher rate of interest than we can get today. all we're doing is a pure refinancing of the debt to save money. the initial debt was 5.6%, and we estimate we can refinance at 3.4%, which will to save us

money. we're going to take over that debt. we are restructuring of the leases with the garages. we are taking pieces of debt that were out there and cleaning them up and putting them into a new structure with a better rate that will save us money. supervisor avalos: has there been any conflict between of the operators of the parking garage and the debt with last a certain number of years in the contract did not last quite as long, is that also a factor? where we want to be able to line up financing with leases. >> we're standardizing all of the leases. everyone had been different. a lot of things were done differently, so we are moving everyone to a new standard lease that we think has terms that better protect the city, but we will be delivering -- we're

going to pay off old debt and do it in a more cost-effective way . for the new debt we will manage and deliver the projects. supervisor avalos: ok. my other question is related to the budget analyst report. i will hold off on that. supervisor chu: with regard to the second series of bond, the refunding bonds are pretty straightforward. in terms of the second series, which are the new projects, there were a couple of items i wanted to get clarity on about what the intention would be in terms of spending it. there was $5 million in the second series that would go towards new parking garage projects, and then i noted in the appendix is showed $33 million worth of potential repairs and work to be done 18 garages. it adds up to be 51 million. the 5 million is far short of the $51 million in identified

needs. i am wondering what with a $5 million before? is it for a specific project you have already identified or is it to do planning work? what is the intention? >> if you see we have 5 million in the first series -- the way we're doing this is more of the planning and design work through their first series for the work remains to be done in using the second series to fund the construction, just as we do often with go bonds. the $5 million is largely for planning and design. we never preliminary assessment that was done by a subcontractor and financial adviser. i think i'll put of that was included in the budget analyst report. that kind of sketched out the general needs, safety needs and other things that were primarily addressing. they have not been fully laid

out. i think once we engage with dpw we will refine that number. we probably will not be able to complete the full scope of every deficiency identified in them, but we will use the first series to get planning and design work started, as well as to start work on the revenue controller equipment replacement. supervisor chu: with regards to the refunding bonds, i noticed the interest rate definitely will go down based on the average of the outstanding debt that is out there, which is a positive for us. on the other hand, it said the average length of time or duration of the debt is outstanding. we are issuing debt that those 20 years out. i am wondering why we would not match that back up. that might be a question for the financial adviser. >> thank you for the question.

the refunded that we determined not changing. it is a new penmoney piece that will go longer. supervisor chu: i might have just misread it. in terms of refunding bonds, the average was 6.9 years for the bonds that are being refunded and the intention is not to drag out that? ok. thank you. why don't we go to the budget analyst report? >> madam chair, and supervisor avalos, on the bottom of page 11 of the report we report that it is shown on tables one and three on pages 6 and 11 of our report. the sfmta currently has five outstanding parking meter bonds that totals $44.3 million. these are five of revenue bonds

currently have an average of 5.6%. regarding the point just brought out, an average 6.9 years left. if the board of supervisors proposed -- approved the legislation, they plan to issue one refunding bond. the interest rate would be estimated 3.41 pe cent% for 20 it is estimated there would be a savings to the mta $5,000,936. that is on a net basis. on page 12 we point out towards the bottom of the page that regarding final 120243, total debt services cost is estimated

at 67.3 million that would include 28.3 million of principles, plus 39 million of interest. over the 30-year term of the proposed 28.3 million new revenue bonds would result in an average annual debt service cost of about $2.2 million. on page 13 of our report, we point out the ordinance 111354 states the revenue bonds of mta would be obligations and secured by the mta with the principal and interest payable by the gross revenue, and that would exclude any general fund transfers. such that the city general fund will not be liable a payment of such revenue bonds. it is shown itfou on attachment for a page we anticipate pledging an

estimated 480.5 million of their total annual revenues of 796.8 million for fiscal year 200012- 2013. on page 14 of the report total, not to exceed 6 million that the mta has authorized to be extended for five years for financial of pfizer's, according advisers, the city has exceeded 1.7 million from the time 2006- 2011 for all city general obligation bonds and certificates of participation and revenue bond issuances. on page 18 of our report we states on page 24 of our report in response to one of our questions regarding why

attachment to on page 24 indicate the fda plans to expand 17.9 million or 53.6% of the 33.3 million sub total parking garage revenue and renovation cost for other costs, that is project management, construction management, design and legal contingency. hubei's is because there are so many unknowns regarding the repair in renovations, all of these soft project management construction management and contingency costs are higher than would normally be expected. -- he advises. on page 19 shown in attachment one in three, the sfmta spend 150 million on a replacement project, and we pointed out mr. walton has advised the

department of technology department of emergency management and as the mta have all recently agreed to hire a consultant to the store to evaluate the three major voice and data communication systems currently being proposed to be improved and upgraded, and that includes the recently-approved motorola interoperable communications system. the city's existing 800 mhz voice radio system, and the proposed sfmta data and communication system. the purpose would be to determine which city system is justified and whether significant deficiencies can be achieved. we also point out on the bottom of page 19 of the report that currently the city itself, rather than sfmta, may issue debt, and based on march 15, 2012 analysis completed by baxter and carly