wednesday september 5, 2012. city of san francisco gov t.v. budget & finance committee.

wednesday september 5, 2012. city of san francisco gov tv.

budget & finance committee.

>> good morning, welcome to the regular meeting of the budget and finance committee and welcome back from the legislative research, my name is carmen khu, i'm joined by supervisor kim, our clerk is victor young, and we have jessie larsen, mr. young, do you have any announcements for us today? >> yes, please turn off all phones and electronic devices, [inaudible] shall be submitted to the clerk, items will appear on the september 11, 2012 supervisor's agenda. >> please call item 1. >> i'm 1 is administrative code section 2a .173 to authorize the airport commission to enter

into leases with entities providing aviation support services without competitive bidding for term not to exceed 10 years. >> thank you. er >> good morning, members of the committee, i'm kathy widner with the san francisco airport, it is seeking an amendment to section 2s .73, the proposed ordinance would amend the administrative code to authorize the airport commission to enter into leases with entities providing aviation support services to the airlines without undergoing the competitive bid process for a term not to exceed ten years. this change would allow the airport to provide lease space to the businesses that currently provide support service to our airline tenants, the aviation support services are defined in the ordinance, they range from the servicing, keening -- cleaning and

provisioning of the aircraft to the inspection and ?aint nans of an aircraft, the handling of passengers and baggage and loading and unloading of passenger baggage, it includes grant support services and check point screening and it states that all the services i just listed but also says but are not limited to these service and is the airport agrees with this suggestion. i just want to clarify that we're talking about businesses or contracts specifically between aviation support services and the airlines, these are not contracts between the companies that i've talked about and the airport specifically. if the airport were to offer these airport leases through a competitive bid processes, the only qualified party would be the one chosen by a particular

airline to provide this service, making bidding a competitive bid somewhat impractical. currently the airlines either sublease space to these aviation support services or ask the airport to provide space under a permit. the proposed change would increase the airport's ability to plan long-term for these bases and it would give the airlines a little more consistency in their planning as well, knowing for a specified amount of time, these contractors that they have selected would have airfield access to provide these services. i would be happy to answer any specific questions you have however. >> thank you very much, why don't we go to the budget analyst report. >> madam chair, members of the committee, debra knew man from the budget analyst office, as ms. widner mentioned, we have made an amended proposed ordinance to remove the

language but not limited to on the specific servicing so that you would be only waiting the competitive bidding for those specified support services. i would also note that without the competitive bidding, the rental rates for any leases between the airport and the aviation support services would be set by the airport's approved summary of airport charges, these are the current -- these are very close to the current charges currently being charged, the airport currently estimates receiving about 13.5 million dollars in annual revenue from these support services which would be continued and with the amendment, we indicate that approval is a policy decision, it would waive the competitive bidding procedure. >> thank you very much for the report, why don't we open this item up for public comment, is there any members of the public that wish to speak on item

number 1, seeing none, public comment is closed. colleagues, do we have a motion to accept the budget analyst recommendation and to authorize the clerk to make those amendments? okay, we have that motion to amend and we can take that without objection and to the item as amended, can we send the item forward with recommendation, we'll do that, thank you. >> item number 2. >> ordinance providing revenue and property taxes at a combined rate of 1.1691 on each 100 dollars valuation of taxable property for the city and county of san francisco, san francisco unified school district, san francisco community college district, bay area rapid transit district and bay area air quality management district and establishing pass-through rate at 0.0810 cents per 100 dollars of assessed value for residential tenants pursuant to chapter 37

of the administrative code for the fiscal year ending june 30, 2013. >> thank you, i believe for this item we have jamie whit >> mr. witikur. >> this is for fiscal year 2012-2013 to a combined rate of 1.1691%, this was lower than fiscal year 2011-2012. since california voters approved proposition 13 in 1978, the base property tax rate has been set at 1% of the assessed property values, i have a slide on the computer that shows the historical property tax rates for san francisco on the overhead. >> would you plead display the

overhead. yes, the tv will provide it. i believe it's a computer display? there we go. >> thank you. >> so, you see the prop 13 base tax rate is 1%, and the 1% base property taxes benefit the city and county of san francisco, san francisco unified school district, city college of san francisco, the bay area rapid transit district and the bay area air quality management district. the amount above 1% of the override rate represents the rate that's needed to collect funds to pay debt service payments for voter approved general obligation bonds this fiscal year. the next slide i have is a comparative tax bill for

typical owner occupied home that was valued 500 thousand dollars at 2011-2012, there is an inflation cap of 2% in 2012-13, the inflation rate is 2% and the increase property taxes would be approximately 104 dollars. this ordinance also sets the years pass-through rate of residential tenants, if you have any question, i'd be happy to answer them. >> thank you very much, just a quick question for you, in terms of the tax rate, the tax rate as a whole is slightly decreasing, in terms of the experience that a property owner might experience, it might go up because the assessment value may have changed, is that correct? >> yes, that's correct, because of inflation. >> the budget analyst? >> madam chair members, of the committee, on page 2 of our

report, table 1 indicates all of the current fiscal year and proposed fiscal year tax rates and debt service, and we recommend approval of the proposed ordinance. >> okay, thank you very much, why don't we open this item up for public comment. are there members of the.public that wish to speak on item 2. seeing none, public comment is closed. we have a motion by supervisor avalos, we'll do that without objection. thank you. item 3, please. >> item number 3, resolution approve lg port commission lease number l15150 with ammunition llc, a california limited liability company for office space located at 10 lombard street, road house two,

in the northern walter front with a 52 month term. >> thank you. >> members of the committee, i'm mr. cruise, this is a four year and four month lease that would generate a little over a million dollar for the port. i'm here to answer any questions if you have. >> supervisor kim? >> thank you, seeing that the budget analyst has broukt up the competitive bidding issue, i think it would be helpful to go into a little bit about the history and the process aof why they think this is a good thing for the board to approve given that's it's a competitive process. >> i can address that,

ammunition llc is going to approve this in consideration for that amount of work, we're going to waive about 110 thousand dollars of rent, certainly a net improvement in the port's balance sheet. that's one reason. the other reason is annually, we do a survey of commercial rent rate ins the area that are comparable, for this particular building, we determined that the market was around 2 dollars to $2.50 per square foot, in this case, ammunition is paying effective wait of $2.67, for those two reasons, we feel this is a good financial opportunity for the port, more generally speaking, that rate survey process that i mentioned a bit ago, that is how we execute leases across the waterfront with the exception of retail leases for say parking lots or restaurants, those are the only leases that we competitively

bid, all the other leases just for the practicality of managing the 7 miles of waterfront that we have are according to to these rate surveys. >> is ammunition a current senate, this is not a renewal, this is a new contract? >> yes. >> and i'm curious as to how you found ammunition or how they found the port. . er i can get that information to you. >> thank you. >> thank you, why don't we go to the budget analyst report. >> through the chair supervisor kim, in response to your question to mr. cruise, ammunition llc currently subleases port on office space at 4100 sam sung street, they've been doing that since 2007 and then they entered into

these negotiations with the port. just to reiterate, ammunition's net effective rate in the first year of the lease would be $2.67 per square foot per month which exceeds the minimum rate based on the port's minimum rate of 2 dollars to $2.50, however, because the proposed lease is not subject to competitive bid process which is required under the city's administrative code, we have indicated that the proposed resolution is a policy decision for the board of supervisors. >> thank you, supervisor kim, did you have a question? >> thank you, why don't we open this item up for public comment? are there members o*f the public who wish to speak on item number 3? seeing none, public comment is closed. colleagues, do we have a motion to send this item forward with recommendation? we do, and we will do this without objection.

thank you. item 4, please. >> item number 4, resolution to authorize the exercise of a ten year option to extend the master lease of the 14 700 square foot building at 124 turk street for the department of public health for contract service providers to provide housing to homeless individuals. >> good morning, chair and supervisors, my name is martha bail, i'm here to seek approval for a ten year option to extend the master lease between the department of public health and 124 turk street, the landlord to have cam lot hotel, it's provided for a ten year option to extend the lease, the cam lot hotel, it would run through to july 31, 2013, the monthly rent from beginning august 1,

2012 is 34 thousand 665 dollars per month or $2.36 per month, it is an increase of the last year's rate, the master lease does provide for annual cpi adjustments for a minimum of 1.5% to a maximum of 5%. also with me is mark truck who is a sdrekt tor of housing and urban health and the department of urban health should there be any questions. >> in terms of your budget, the budget that was recently passed, does it reflect the increases in rent? >> yes, it does. er >> why don't we go to the budget analyst report. >> because the proposed lease would be retroactive to august 6, 2012, we recommend an amendment on the proposed resolution to make a retro active start date of the august 1, 2012 and to approve the

proposed resolution as amended. >> thank you, why don't we open this item up for public comment. are there members of the public who wish to comment on item 4. seeing none, public comment is reed. do we have a motion to adopt the recommendations to authorize the clerk to make those change and is to send the items forward with recommendation to the board. we'll do that without objection. item 5. >> item number 5, ordinance waiving the fee in public works code section 724.1b for temporary street space occupancy as part of the ocean avenue arts and cultural festival on september 15, 2012. >> this item was brought to us by supervisor avalos, do you have any comments? >> this is an annual event that we have every year, it brings people together from the community, it doesn't have a great deal of resources to

cover the cost of the fee itself, yet the benefits of having the event really help attract people to businesses and assure people of what services are also available in the community and i would like to see if we can approve this ordinance to have the festival have its event this week.ing >> we do not have a budget analyst report with this. are there any members of the public who wish to speak on this item number 5? seeing none, public comment is closed. colleagues, do we have a motion on this item? okay, we have a motion to send the item forward with recommendation and we will do that without objection. okay, item 6. >> item number 6, resolution authorizing the director of the risk management division of the office of the city administrator to amend its contract for insurance

brokerage services with alliant insurance services to increase the contract value by 7500 000 for an amount not to exceed 17 million pursuant to san francisco charter section 9.118. >> thank you very much. >> thank you madam chair, matt han son, w the office administrator, the item before you covers approximately 12 plus billion dollars in values for city property insurance as well as insurance for the fine arts museums and some builders risk coverage that we have for public construction. the original amendment that was asked for was reduced by the budget analyst recommendation. we believe that our original amount was appropriate, however, we will accept the reduction because it does cover the current cost.