projects we have defunded in this proposal. following the america's cup events, the port will refocus our attention on bringing to you capital projects for financing that have a positive impact on our balance sheets so we can build back the bonding capacity and continue to improve our waterfront. i will request that you recommend the city c.o.p. and authorize the mou and recommend the appropriation to the board and i am here with large brown and -- laurence brown and megan and we can answer any questions. >> so moved. >> any public comment? hearing none, commissioners, questions? >> i would like to say that once again, the staff seems to have risen to that challenge and some

-- found creative ways to meet that challenge. accommodation to you and your staff for figuring out how to get this done. >> i agree. it is an organized plan to go forward given all the changes. thank you. >> i want to thank you for the hard work. i did not understand that projects were being defunded to make this happen. can you give us a little bit of a strategy on how you will refund these projects? >> and some questions along that line. if you could add to that any potential exposure we might have by defunding these projects. the strategy for refunding is always the most challenging. the southern waterfront project we defined it, the back lands was a hard decision to make because there is revenue potential at the other side of

that project to the tune of $1.80 million. it is a project that we absolutely want to see accomplished. given our current slate of improvements that you'll be seeing across the waterfront in the next two years, it seemed it was prudent to use the financing for pier 3-32. it is a need to happen now project. it will be the main contender for the next revenue of debt issuance of the port, very likely be a project that is funded through that issuance. for the amador street project in the painting projects, both were costing more than we had allocated. defunding makes or worsens the situation but we were not ready to go on those projects because we did not have a complete plan of finance. we will be looking at our capital budget as a source for

not the current budget year but for year two of the capital program. there was some opportunities with amador street to look at the puc as a partner in the project. that is where we are. for pier 35, that is not in the southern waterfront but it is a defunded project. we do have an allocation in the capital budget but we have taken more than we have replenished. we will be looking at year two to reallocate. we will be using our typical scoring criteria we put all the projects through the lens of meeting our mission, generating revenue, receipt -- reducing risks and liabilities and shuffling our capital budget. >> for amador street, how much was needed to complete the budget? >> this is lawrence brown. we had funded one.

fund -- $1.1 million. we were quite a ways out. >> and with the painting? >> we have -- we have done some work on that. we have designs where we were ready to go and we had an estimate, and engineers estimate that had been recently done. there were three cranes to pay. the most important ones were the hon died -- hyundai cranes, to paint one was [unintelligible] we were short. the project is designed and also for the back lands project, a lot of the design work and things had been done. we were working with the puc.

we're not starting -- we're not starting from ground zero. there is work that has been done already. >> this one slipped by me and i am really sorry. i do not have a sense of everything that is funded that is not -- does not have enough to make a difference or have the project afford. i am not quite sure how you came up with these numbers versus the park versus all these other things out there. the money is not being used. but we decided to take money from these parts. >> we did go through quite an extensive review. we first found funds that were available from closed project. these two projects we could not accomplish with the existing

funding. for the other projects in the capital program, there were not ones that were standouts we could not accomplish with our existing allocation and that was the reason for those projects. we needed to match the dredging and appear demolition costs with capital sources. we had so much from what we could find from close projects that had surplus left. and these were the leading contenders. there was no easy decision in the defunding. >> that is also open projects that are not fully funded that have money allocated. i am saying that -- i am not quite sure how you came up with the process of selecting these items. i do not want to hold this up because i know there is a need to fund 30-32 going forward. i personally would like to know what process winter to make this decision -- we went through to

make this decision and you and i can do little there. i do not want to hold this up. >> the defunding does not support 30-32. it supports dredging and demolition. to the extent that we can perform the demolition work with our pile, our own crews, the funding requests could be revisited. we have to go with an ordinance so we have our pile crew performed the work. we're working on that now. there is a possibility to revisit the defending or have them first in line to the costs, -- come down. >> we heard there was also a staffing issue in keeping all these projects on stream and that was another thing you

mentioned. there was some trade-offs made as a result of having to keep all the balls in the air. >> there were some trade-offs for our engineering team. just to ensure that we could successfully manage the scope and breadth of all the capital improvements in this short period of time. this was one of the factors that brought -- drove the decision. taking on a new c.o.p. at this time and keeping the back lands project funded. we could move forward in travel -- 2014 and make sure we are successful with this late we have in the near-term projects. >> i had that under the irs rules for expend

get the hint. this cost us some time and $200,000 to mitigate the schedule delays. this is the end of the construction on the south end. there is port going away. prior to the america's cup, the plan of the terminal project was to leave the end of pier 27 on the waterside. that is the north side as well as the adjacent end of pier 29. the cruise terminal itself needs a space that is shown empty between the two. under the current agreement, the port would not have to pay for engineering, demolition, a

new area draining, and you end wall fencing and lighting on the north part of a peer -- the pier. this slide shows the intersection of pier 29 with 27. what is remaining there is pier 29 at the apex of the triangle. at the right side is the end wall, 27. this portion of pier 29 will remain as it is while the preservation community decides how this end wall will be constructed. we plan to finish demolition of 27 next week. we will move over to the administration building on the embarcadero. the demolotiion -- demolition

team will demolish. structural steel is underway. in fresno at olson's deal. it is 50% complete. you see the shop fabricating some of the beams and girders. i am pleased to announce that we obtained 350 tons of steel for the bones of the terminal which is produced in arkansas and indiana. steel started arriving on site at the end of this may. and it should be complete by the end of the summer. port staff proposes to amend the joint venture could design -- a joint venture design contract to increase the contract amount by $776,000. we have a 40% lbe participation.

most of the increase is due to design work to increase north point changes which i just discussed previously. all this was not in our scope. most of the scope will move into phase two of the terminal which -- of the project which is non- terminal aspect -- non-cruise terminal aspects. the requirements affecting the northeast wharf plaza design, the north tip design, access from the embarcadero to the north tip and repair 29. fencing and lighting in addition to restrooms. all these items keep adding to our scope without providing funding. the design team will have to provide general architectural services that were provided by the department of public works

staff. this will represent an increase to the design team contract and a deep -- a decrease to dpw for their services. dpw as part of an agreement with the civil service commission provided services to the project and they had to pull back their architects to work on their projects. obviously these design changes will have an effect on construction trade support staff requests -- the third amendment to increase the contract amount by $4.50 7 million. -- $4.57 million. i would like to say even though we're in the early stages, local hire is 37% versus 27 percent -- 20% mandated. one thing about the nature of the turner contract.

their construction manager general contractor, so the contractual procedures are different from our normal lump- sum can track. the turner it's out each of the trades -- bids out a to the trade as a separate package. stallone is one package. -- concrete is one package. these are not necessarily change orders to a subcontractor but most of these things have been bid. the original -- the largest cost is $3.10 million due to trending of projective bid awards. as i said, we have been out 20% of the trade packages -- bid out. their original estimate was performed in the fall of 2011.

since then, the industry has experienced some recovery. some contractors have reduced staff and capacity leading to the not bidding projects. this change has led to increase bid amounts. contributed to design development occurring during the last several months. the second biggest component was $1.8 billion due to shifting lobby improvements and escalators for face to to -- phase to to phase one. to support cash flow requirements. due to reduction of temporary facilities that would have been required. this -- the curtain wall had been bid as part of phase one and phase two. it was shifted from phase two up

to phase one. this was not a negotiated change order, it was a bid price. the third largest component was [unintelligible] due to catch basins and pavement. this work will be bid out. completion of these improvements will allow the america's cup to use the appear as a focal point for the sailing races. i would like to introduce our next speaker who will talk about the additional america's cup work. >> good afternoon. i am ehre -- here to requestor authorization to execute a 4th amendment to the general contractor -- contract with turner construction to include the total contract authorized into $64 million.

to fund new public improvements related to the america's cup event. at pier 19, 23, 29, one half, 64, and 30-32. assuming that you approve the request. the purpose of these amendments is to provide a means to execute improvements needed for the america's cup race. we anticipate some of these work , for example, work at pier 19 and pier 64. maybe undertaken by the minutes division. this may result in a cost savings to this contract amendment. but that is subject to one of

the ordinance -- a city ordinance that staff will be working on, once the ordinances passed, we may be able to get some of these work done by the poor maintenance division. design for the [unintelligible] and is expected to be completed by the second or third week of may. staff is working with current agencies to secure the permits. we expect to get these permits approvals within the next couple of months. staff is working with the san francisco human rights commission to establish the local business goals for this contract amendment. we expect to have the goals established within the next couple of weeks. we have planned to complete the improvements for the event by july 20. the remaining work with the

exception of work at pier 64 is expected to be completed by january 15, 2013. the work at pier 64 is expected to be completed by october 2013. with this complete -- this will complete my presentation and i request your approval for the fourth amendment which is resolution 12-40. we are available for any questions. >> so moved. >> second. >> public comment? commissioners? >> do you anticipate any more amendments of phase one? [laughter] >> possibly not. >> speaking to the mike, please. >> maybe not. i hope not.

>> can you articulate the specific increases on pier 29 that were not contemplated previously? you indicated there is going to be some increase in the fourth amendment for pier 29 but we had allocated some funds previously. what is the distinction? >> the fourth amendment includes the fund needed for the substructure repair for pure 29. >> that is the palin problem. >> the palin problem. -- piling problem. also the end wall construction. water management is included -- storm water management is included. >> no one was aware they needed to be put replaced? >> we found out a couple of months ago.

america's cup, when they were working for the event authority, they found out some bad piles. when we were -- the turner contract was awarded, we were not aware that we had a substructure issue. >> i wonder who is responsible for the due diligence on that? >> we have been doing the due diligence. we have confirmed these findings and the number of piles that needed to be repaired. we know what needs to be done under the deck by now. >> recall that under the initial plan, the end of pier 27 and staff -- that was going to stay in place. the port engineering teams due

diligence was underneath the area where the cruise terminal was going to be built. only after the america's cup project came along to propose the move -- removal of the additional portions of pier 27 and 29, the bad authority got teams under that portion of the deck and found these conditions. >> thank you. i had to put on my lawyer's hat for just a moment. >> would it be alright if i made a comment? >> sure. >> i feel the need on the record to thank everyone from the port staff and department of public works and our engineering and design team and turner construction. i do not think any of them find -- signed up for projects that would get redefined as many times as it has and it has come out the other side not as a

sausage but as a gem. it is amazing to watch the talent that has taken. it has been an effort by so many individuals, both in the city family and outside the city family. there is so many attributes we can be proud of, not the least is buying steel in the us. -- u.s. everyone in the city even our opponents have supported us. thank you for your leadership. most importantly, the post -- port staff. it is -- we are looking forward to full steam ahead. no looking right or left and no looking right or left and getting to a day of celebrati