chairperson chu: good morning, and welcome to the regular meeting of the budget and finance committee. we have two clerks today. mr. young or mr. derrick, do you have any announcements today. >> files should be submitted to the clerk. items will be on their board of

supervisors agenda unless otherwise stated. >> also, we have jennifer low and bill dillon. would you read item one, please? rex -- >> ordinance no. 7712, an ordinance recognizing revenue losses of 30 four million 177,330 two dollars -- $34 million for the department of public health. for the department of public revenues, $25 million in surplus general hospital revenues. and $655,000 in general fund reserves for state revenue losses for expenditures at the department of public health. chairperson chu: this item is a correction to action we have seen previously.

this should be correction to the legislation. if i can, i can ask kate from the mayor's office to speak to this item cracks -- >> good morning. as you mentioned, this is a correction to the supplemental appropriation that the board of supervisors approved for the department of public health. there was an error in the delineation of the source. this just correct the source. it does not change the total amount of the appropriation. >> thank you -- chairperson chu: thank you very much. is there anything you would add to this appropriation? rex and no, madam chair. there is not. chairperson chu: what we open this up to the public? are there members of the public who wish to speak on item 1? >> good morning, supervisors. i would like to thank this committee for hearing items one,

two, three, and four. i think having these items on the agenda at least gives a little bit of transparency as to what is happening inside the department of public health. i would like to thank this committee for sponsoring item number one, because i think all items need to be corrected when necessary and since the big man is in town for lunch today i will not be able to stick around for items two, three, and four. >> -- chairperson chu: are there other members of the public that wish to speak? see none, public comment is closed. we have a motion and a second to send this forward without objection. item two. >> the department of public works to execute a design for the the glenna hospital program by increasing the contract

amount from $50 million to $53 million. chairperson chu: i believe we have a representative from dpw. >> good morning, supervisors. you have before you a modification that provides funds for additional service requests for addressing required repair work and additional administration. this is for the design and oversight of the repair work. with the demolition now completed, the full extent of the repair work necessary is apparent and we're forecasting completion of construction of the remodeled by the end of this year. i will be happy to answer any questions about the amendment itself if you have any. chairperson chu: thank you very

much. mr. rose? brecht's madam chair and supervisor avalos -- >> madam chair and supervisor avalos, at the bottom of page 3 we point out that the total design agreement is for $53 million and that represents 9.2% of the total budgeted 580 four million dollars laguna honda hospital replacement project. our recommendation is shown on page 5. we recommend that you amend the resolution to increase the existing amount not to exceed an amount of $50.8 million up to $51 million. the reason for that recommendation is as you know, there was another modification inadvertently being requested

being approved. since it was less than $500,000, it was not subject to board approval. our recommendation simply reflects the fact that the four hundred $77,000 has previously been approved. -- $four hundred 77,000 has been previously approved. chairperson chu: are we in agreement with this recommendation? rex we are. chairperson chu: why don't we open this up to public comment? are there members of the public that wish to speak seeing none, public comment is closed. spirit >> announcement for approval. chairperson chu: we can do that without objection. thank you. can we call item three and four? >> item 3, a resolution directing the sale not to exceed $261,000 aggregate

principal amount of san francisco general obligation bonds and describing the said terms of the bonds. item number for complete general obligation bond proceeds approved by voters under proposition 8 in november, 2008 elections obligating bonds for the rebuilding and improving of buildings affected by the earthquake at the trauma center. chairperson chu: do we have a department representative on these items? >> good morning, supervisors. i am here to speak to the authorization for the issuance not to exceed the amount of two hundred $65.2 million of general obligation bonds. -- $265.2 million of general

obligation bonds. it would require us to find the project cost of issuance as well as the controller's fund and the general obligation bonds. we have assumed our 20-year term as well as a conservative interest rate assumption of 6%. we currently have $7.6 billion of general obligation bonds. under the charter, the authority to issue general obligation bonds is 3% of the assessed valuation. we are currently at 1.4 -- 1.04%. if this is approved, it will get as to 1.2%.

the june, 2012 payments could be substantially reduced as well. there's also a policy that requires issued debt as it pays down debt. this would bring us to the 2006 level. the issuance of these bonds would allow that. in addition, you are also delegating authority to the city comptroller to make amendments and changes to the prospectus or official statement which covers appendix a, which has the city organization -- handles the city organization as well as finances. the report has been issued by the comptroller and the board of supervisors' budget analyst through may. it does not include the budget that was proposed by the mayor on may 31st. it does not include the revenue letter that would come as a result of the budget adoption when that happens. your delegating authority to the

comptroller to make such amendments to that statement. i have the project management -- manager hear from the hospital. he is here to speak to the project if you have any questions. chairperson chu: thank you very much. you have in this authorization a maximum interest rate of 6%. where are we generally coming in? rex we have fortunately been -- in february, where we went to the market the market $260 million for the streets as well as park bonds, we got about 6.9%. but we also went to the market a few months ago and it was lower. we expect to sell some time at the end of july. so far, interest rates have been the lowest that they have been in years. we are hopeful chairperson chu: and the department -- we are

hopeful. chairperson chu: and the department of public works project manager, if you can speak to this project. please come forward. >> good morning. my name is ron allen the gap. -- ron alameda. i represent the department of public health. the project is advancing as planned. we are moving through the topping off yesterday, as you mentioned, with the ceremony. we are progressing through the pouring of concrete slabs on the elevator? . -- the elevator decks. the last two remaining portions of the project are still going through authorization.

the last portion is increment four, which is the buildout project, and the increment 5, which is the major medical project. it is planned to be the last one offered up for plan review so we could select latest technology and medical equipment. those two elements are still in plan review. the remainder of the building is progressing. we have increment 6, which is the shale of the building, this -- the shell of the building, the skin of the building. we started production two months ago of the precast concrete, as well as the curtain wall for the building. knock on wood, we have navigated through a lot of obstacles in the last few years. but we are moving nicely forward. chairperson chu: you had

mentioned that you expect the project to come in within budget and on time. what is the completion date that is expected? >> we are looking to be operational by the end of 2015. right now, we just pulled in a little bit -- saved a little bit of time and are tracking toward an april date for substantial completion. that is the trigger point for when we begin the licensing time frame as well. been a hospital, we have two state agencies to answer to. one is the -- pride -- oshpod, which is essentially the state level building department. once we reach a state of completion, the state level department of health will be reviewing the operational plan for the new hospital to be and -- to ensure it is outlined with

-- to ensure it is aligned with the new hospital being built. that is at the beginning of 2015. and once we get through licensing we will be able to face any challenge is going forward. chairperson chu: do you anticipate complications with the budget? >> we expect to have the permit in hand by august of this year. increment 5, we're looking for a permit for next year. the most immediate risk right now is not achieving a timely permit from oshpod on increment four. we have some ways to work around on that permit. i was relieved to see that we were able to advance and get the increment 6 permit, which allows

us the shell on the building. we have a couple of plan c's and d's, but d'sa is to -- but plan "a" is to get the normal permit by august. >> on page 5 of our report we point out that based on a 20- year term, the bonds will show a debt service payment of $438.2 million and that includes a two hundred $56 million in principal. -- $256 million in principal. there is a homeowner's exemption of $7,000 to pay an average additional property tax to the

city of $63 per year. we recommend you approve this legislation. chairperson chu: why don't we open these two comments up for public comment? are there members of the public that wish to speak on items three or four? >> good morning. i have graphics. this is what it needs. another $1 million. [laughter] another $1 million. ♪ maybe you did not improve it quite as often ♪ as you could often ♪ maybe i should have helped its ♪ ♪ all those lonely broke days ♪ little things you should have said and done ♪ ♪ you just never took the time ♪