supervisor chu: hello. welcome to the regular video of the budget and finance subcommittee. i am joined by john avalos and we will be joined by supervisor kim shortly. mr. deng, any announcements for us today? -- mr. young. >> we silence any self on cell . items acted upon today will appear on april 12 board of supervisors agenda unless otherwise stated. item number one, resolution approving four new 2011 airline/airport lease in use

agreements between the city in council -- county of san francisco and various airlines, effective upon a full city approval to conduct like copper and tin and cisco international airport. approval, to conduct flight operations at the san francisco international airport. >> good afternoon. the lease and use agreement is the mechanism that allows airlines to operate in the insurer's annual service payment from the airport to the city through june 3021. -- june 30, 2021. these airlines are currently non-signatory airlines of san

francisco, meaning they are not part of the current lease agreement and were not part of the previous lease and use agreement. that means they now pay 25% more in landing fees than they will once they are added to the lease agreement. this is used as a financial incentive to encourage airlines to receive 25% lower landing fees. of the four airlines before you, only jetblue rents office space. aviation management staff estimates that under the term of the new lease with jetblue they will pay $205,000 per month in rent and landing fees. west jet world airways will pave the airport approximately $75,000 per month in landing fees for the remainder of the current fiscal year.

the budget analyst does recommend approval, but i will be happy to answer any specific questions you might have. >> think you. why do we go to the budget analyst report. >> madam chair, we've reports on page 4 of the report that this would result in a reduction of 41,40768 by not having to pay the 25% premium in the landing feeds. s. that is consistent with the airport policy. they estimate it will pay 217,000. similarly, for the other three airlines there would be a total reduction in rent for the balance of fiscal year 2011-2012 of 75,578, and those three

airlines will pay the airport a total of 79,000 -- i should say not 75,000, but 18,895. that would be the total reduction in rent. their report estimates these three airlines will pay the airport a total of 79886 per month in fiscal year 2013. the break even policy really makes this point somewhat academic in terms of the reduction, because there would be no impact on the airport. we recommend you approve the resolution. >> why don't we open this up for public comments. members of the public that wish to speak on item number one? public comment is closed. supervisor avalos: motion to forward to the full board with recommendation. supervisor chu: we will do that without reco recommendation. >> item two, resolution

authorizing the general manager of the san francisco public utilities commission to enter into a long-term master license agreement for the installation of photovoltaic power projects on send and cisco unified school district buildings. >> my name is john doyle. i manage the energy infrastructure program for renewals and energy efficiency programs. we are really excited to be involved with the san francisco school district. this is a master license agreement and the school district. this will allow for installation of solar pv on school for the school district. the agreement provides for identification of sites between mutually agreed between the school district and the puc. it provides a series of agreements between as relating

to the power in terms of the power is actually paid for by the school district of the return rate. the puc would pay for the cost of insulation and long-term operation of the solar systems. this is an agreement that generally covers water systems might be applied in the coming years. it is a 35-year agreement. it comes from the fact it is a 10-year agreement. if the last system went in and 10 years, it would make it a 35- year agreement in place. we're very excited to be able to do this. we are asking for your approval for the master license agreement. >> think you very much. this item does not have a budget analyst report. -- supervisor chu: thank you. members of the public that wish to speak on item number two?

seeing none, public comment is closed. supervisor avalos: motion to approve and forward to the full board with recommendation. and supervisor chu: promotion to send forward with recommendations. to go item number three, resolution authorizing the director of the office of economic and workforce development to apply for, except come and expend grant funds in the amount of 1,350,000 from the california department of housing and community development catalyst community grant program. >> good morning. i'm here today to request the adoption of the resolution to authorize the director to apply for, except come and extend it refunds in the amount of $1,350,000 from the california department of housing and community development. just by way of background, in august 2009, we issued an rfp

for the project under the california sustainable strategies pilot program. this is funded by proposition 1c. project designated as catalysts community projects will be eligible for vital resources and technical assistance. in 2010 dope on behale on behalf the mission bay project and was awarded a grant of $1,350,000 to support the mission bay project. prior to receiving the funds, we are requiring a resolution to be adopted. the mission bay project area falls under the jurisdiction of the former redevelopment agency. the agency was in eligible to apply for the crypt. the determined city and county agencies that were the ones that could apply for the grant.

they have worked closely to develop the application for the community catalyst grant. >> good morning. i work for the city administrator's office acting as the successor agency to the san francisco redevelopment agency. over the past couple of years we have been working with oewd to secure mission bay grounds. we're pleased to say mission bay is one of the 13 communities in california that has received a catalyst community designation as part of the sustainable strategies pilot program. and one of the grant requirements required a strong demonstration of a public/private partnership. it required a written commitment from the private sector partners and the city partner is the master developer for

mission bay. the catalyst community grant fund shall be used to pay for the mission bay neighborhood children's park. the children's park is a 1.2 acre park located in the heart of the mission bay south residential area. upon full buildup of the surrounding area, the park will be adjacent to over 1400 units of housing, of which 36 percent will be affordable in within a 5 to 10 and a walk over 4600 units. the children's park is essential to providing open space suitable for many young families that have moved into the mission bay existing housing and are anticipated in the future development. the proposed grant project includes completion of park planning, engineering, design approvals, permitting come and construction management. it also includes site preparation, utilities, landscaped of a heart state and state furnishings. and no news city positions are

being created for this grant project, and no matching funds were required, but the matching developer is contributing over 1.9 million of their own funds to complete the park. the overall budget is approximately $3.3 million. the park is scheduled to be completed by spring of 2014. we require the resolution prior to entering into agreements with oewd. this concludes my presentation. we are available for additional questions. and take of think you very much. at this time, if there are no further -- supervisor avalos: in the packet we have what looks like an award letter to the director michael cohen dated august 2010. i am trying to figure out what the time line was for this

grant. right here we're seeing what we are applying for. was this already applied for in previous years and was not awarded? >> in the recitals there is the retroactive reference to applying for the grant previously. it is about the third paragraph down. it was an interesting process, because first you have to be designated as a callous community. then the award was given for the amount. an award cannot be granted until a resolution is granted in the form that is before you that says we are authorized. it was a little bit of an interesting process, because they had already designated as, but they wanted us to have a resolution to apply for such an expense. >> ok. thank you. supervisor chu: this does not carry a budget analyst report. i want to open this up for

public comment. any members of the public that wish to speak on item three? cnn, public comment is closed. -- seeinng none, public comment is closed. sending up forward with recommendations. thank you. item four. >> resolution approving at least #l-14819 with aardvarks storage unlimited for paved vacant land located at 600 amador street with seawall lot 344 in the southern waterfront with the 60 month term in six the month option. >> good morning, supervisors. i'm with the port real-estate division. the item before you is the proposed lease that will redurew three existing leases. the aardvark storage has been a

port tenant for over 12 years. the premise is comprised approximately 274,163 square feet or 6.2 acres of paved vacant land at 600 amador street off a cargo waof cargo way. the use of the premises shall be for continued use as a mini storage facility. the term is for at a five-year lease with a five-year extension option. the commencement date would be on the first day of the first month following execution which we estimate to be may 1.

rent for the remaining four years of the initial term and for the five-year extension option contained six increases that range from 2.33 to 4.5% annually. the rent increases exceed the port standard annual 3% rental adjustment over the term of the lease. with regard to maintenance and repair and utilities and services, the tenant is responsible for maintaining the premises in good order and repair and for payment of all services and utilities provided to or consumed on the leased premises. we ask that you approve this new lease. i am happy to answer any questions you may have. >> supervisor chu: in terms of the whole over time, it looks like we started on a month-to-month

basis with our paraardvark and i am looking white -- wondering why it took so long to bring forth a longer contract? >> the budget analyst at the same question, and i provided written responses and the report. basically there were other city agencies that was looking at a couple of sites for a buyer diesel plant, and for an electric generation plant, and the department of environment was also looking for -- they were also looking at for their waste water treatment. it was the department of environment that was looking for a buyer diesel plant.

so the port took it upon itself to hire consultants to look at the proposed uses, as well as but a master plan for what they termed the back lands, which appears in 90 and 94. it was kind of an extensive analysis, and at the end of this time, they decided none of the sites were feasible for them because of the poor soil conditions. in the port also looked -- then the port also looked at developing warehouses for various uses, and because the bay fill soil stability of the site, the warehouses were deemed to be inappropriate or economically unfeasible use.

then we were given the go-ahead to start negotiating again. it took awhile, but we are here today. >supervisor chu: it looks like the rate we're charging is well worth it and what it previously was. is that the market rate at the moment? what is that based on? >> right. as you may know, the port commission annually approved a minimum rental rate schedule, and for paved vacant land in this 22-25 cents per square foot. the port commission also approved a resolution granting of 5% reduction in rent for 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 the 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