>> commissioners, brad benson, special projects manager. lot a is within the city's people plans a satellite facility, a regional lot where people can drive to the city and take transit and in this suggestion, water taxi, if we can figure out the land configuration adjacent to that site. so we'll look into that in addition, to the people plan. >> thank you. thank you very much. >> item 12a. >> i think we have a formal motion. >> i'm sorry. i am not good today. [ laughter ] >> i'm on pins and needles for the answer here. i feel like i'm on a good show. >> all in favor of the resolution no. 12-68?

aye. >> it has been passed. >> item 12b accept the port's report on contracting activities for the f-f-2011-2 1y >> item 12a. (reading item 12a ) >> good afternoon, port commissioners, elaine forbes, deputy director of finance. i am here to go over the budget changes when you all approved the budget in february and outline major changes for your review and acceptance and ask specifically ask for your approval of $1 million

expenditure. to the event authority for some engineering studies. the presentation today will go over the budget process and timeline, mostly for the benefit of our new commissioner, commissioner adams. we'll describe the major changes. i will cover it in high level. you have the detailed review in the report and give you a little bit of an update on the actuals for fringes and salaries. when i was last here president woo ho asked what our estimates conserve? reasonable? aggressive? and i have the answer for you. so in terms of the process, the port commission approves the budget in february. normally in two reads, informational and an action item.

then it goes to the mayor and then to the board of supervisors and if may we have two hearings in front of the finance committee. board accepts or reject those and reallocates those savings back to the budget fund. the budget is finally approved in july and becomes effective in august. we operate on an interim budget between july 1 and august and then in september, i come back to you and tell you what happened to the budget since you approved it. the total operating budget for the current year increased by $6.7 million since your approval. that is from $65.9 to $70.6 million. $2.4 is in the port's budget, and $4.3 is from adding south beach harbor. while the operating budget b current year from $11.9 to

future capital was removed for budget year, it increased $6.2 [#1*-/] million from $67.6 to $73.7 million a. $1.6 of this is in our operating budget and again $4.3 is adding south beach harbor. to the capital budget also increased, but only l4,000 from $10.5 to $1.9. the key drivers of these changes are the final america's cup agreement. it really is a place holder, that $4.3 million and it's balanced revenues and expenditures. the other changes are from revenue losss that we learned about after approval.

related to some lease changes. and the board of supervisors process. this chart here is in your report and shows the overall changes. so i will take these topic areas, fund balances operating areas and expenses and capital in order. basically flat revenues, plus increased expenses equal lower appropriations. so let's start with fund balance. fund balance is down $2 million from what you saw. as you know fund balances is an estimate, so we'll have the actual number when we're done with our year end close. we did a supplemental appropriation last year to allocate funds to the cruise term inal project and did that supplemental appropriation. it's offset by a slight increase in projections of where we'll end year end.

now to operating revenues, relatively flat overall, $100,000 change in the current year. that is driven primarily from an increase for the electricity surcharge from shore power installation at pier 70. remember we added a surcharge to repay the port for its investment of $5.7 million in that project? we also have a reduction in the payment in lieu of rent from the city. and this payment in lieu of rent is because the america's cup has delayed delivery dates for our venues and is using fewer venues. that is offset by increased rent from delaying delivery dates, but they are net exactly equal and not offsetting due to some technical changes. we also reduced revenue in year 2 for the public ground project. as you learned from the report

here, it will remove 87 park spaces in fisherman's wharf and we would need to increase sales 7.5% offsetting. we also decreased lrevenue for the back lands project, for the pier 27 america's cup improvements and we had anticipated revenue in year 2. so in the current year it's $100,000 change. and in budget year it's $600,000 reduction. now to operating expenses. the net change is $2.4 million in the current year. and for budget year, $1.8 million. as previously reported to the

commission, the lda -- this resolution that you have before you would formalize the payment to to the event authority for engineering work for piers 30-32. the port commission previously approved this expenditure in concept. in terms of the new cop repayment, when we came to you with the budget, we did not have our $38.5 million program and the, but not , as well as the duration has been reduced because of this. we will be operating them for longer and there are utility costs and other expenses associated with

that. that is reflected as an increased expenditure. the fireboat increased $82,000 in the current year, $50,000 next year and the board of supervisors made several reductions to our operating budget. they disapproved an it position. reduced kw and purchase of a sedyap. the port staff concurred with those recommendations. to changes in the capital budget, since your approval, it's been decreased $1.6 and in the current year up $400,000 in

year 2. the primary driver is the reallocation that i already discussed in the supplemental appropriation we did last year. we defunded portions of the budget for the cruise terminal, for leasing capital improvements and for elevator/escalator improvements that were assumed in the budget and used them instead for the cruise terminal project. all of the board of supervisors' reductions went back to our pier 29 fire project. which is a real benefit to the port and we're veh very appreciative that the board of supervisors reallocated all of the cuts to pier 29 fire in the budget year and year 2. to capital and reserves. this chart is showing that with the board of supervisors changes in the approved budget we were able to meet the commission as policy for 15% reserve of operating expenditures.

in terms of capital, we were not able to meet the 20% allocated to capital in the current year or in year 2 as we discussed when we talked about our financial plan. we do anticipate starting in '14-15 to meet that 20%. i would say this budget looks mean in terms of capital repair and maintenance, but we shifted and making quite a large investment in capital with the cruise terminal and we shifted what would have otherwise been a capital repair to debt replacement and aloud llowed us to make the capital improvements.

so finally commissioner woo ho, you asked about our projections related to salaries and fringe. and i answered we use what the controller tells us what to use and you said how accurate are they? and this year they were very, very close, 1.9% change from what we had in our budget estimates, as you will see salary went up $443,000 and fringe up for a total change of $618,000. so they were dead op. i think in years where you have known salary increases and good contract and terms for fringe benefits we're very close. so we're very close using the controller's estimates. so with that, i am here to answer

any questions as is nate cruz, who is the financial analyst in the real estate division. we can answer any questions that you have. >> so moved. >> second. >> is there any public comment? hearing none, questions from the commissioners? >> i would just like to once again commend the staff, because we did very well with the board of supervisors, which means this was prepared extremely well. so thank you so much. i just have one question and that is regarding the $600,000 that was reallocated from the back lands project and i know when we first discussed that months ago i asked what was the thought process for reallocating that or refunding that? >> yes. very good question, commissioner. it was a very hard decision to make to reallocate from the back lands. it's a revenue-generating project. it's a project that we want to accomplish. there were two reasons we reallocated from it.

it's taxable debt and we weren't spending it. because we had so many other projects in the near-term horizon that we had to have it done. we felt we wanted to use precious taxable debt and utilize it for the pier 30-32 and other projects that were shovel-ready. we were issue revenue bonds again and the backlands project is on the top of my list. as we look through, you know, what are those projects, that will serve the public the best and have most positive revenue-generation for us, so we can pour it back into capital improvements. i know the backlands will score well. it was a capacity issue and taxable debt that was not getting spent. >> thank you. >> any further questions? all in favor of resolution no. 12-69? >> aye. >> it has been passed. >> item 12b, accept the port's

report on contracting activities for fiscal year 2011-2012 and july 1,2011, through june 30, 2012. >> good afternoon elaine forbes, deputy director of finance. first i would like to acknowledge megan stevenson and andres who prepared the report. andres is not here, but megan is here and did an excellent gxgetting all the data together. so this is your annual contracting report and it goes over several different elements. delegated authority, lbe participation, the lbe participation and actual contract compliance impairments, compliance with local hire, local 21 staffing activity, which is something that we included in the report at the request of the local 21 union and projected completed

by dpw. so first related to delegated authority, as you know the port commission authorized the executive director to executive contracts under delegated authority for chapter 6 contracts and for $100,000 for professional services contracts, which are chapter 21 and execute csos under $25,000 one was for coaching services for $10,000 and polling services for $34,000 and one for foreign trade consulting for $30,000. last fiscal year the port issued 17 contracts with a

not-to-exceed amount -- the lbe goal that the commission approved in the contract agreements averaged 15%. the attachment to your report shows these contracts broken down by construction and professional service and those exempt from lbe and those not. the reason that the contracts -- that this are seven contracts exempt are for two reasons, either they have federal funds and federal relations preclude or prohibit that use or under the trigger amount of $100,000. the report that you have has an inaccurate data on page 4, because we omited some contract service order changes.

this table has the corrected amounts. and our commissioner secretary miss quesada has the correct information and will have the correct report in the file as do the commissioners. there were ten csos for a total dollar amount -- these are actual payments, contracts and payments for total amount $2 million. ten agreements, et cetera. so we see an overall in the report that says 22%, but it's actually 23%. the change added about $300,000

of spending, and $250,000 of that went to lbes, so it did improve the report. as you know local hires required for construction contracts bid after march 25th, 2011. all contracts must meet a 20% minimum for work hours by trade. 6 of our projects qualified in the last fiscal year, and are listed here. all of the projects came in over 20% with an average of 39%. we're very proud of that result. so in conclusion, the port exceeded our 20% goal in '11-12 relative to actual payments. getting 23% and that is $8.1 million in contract dollars that went to local enterprises

and provided over 1160 hours of work to san francisco residents and we're very pleased to present this report to the commission. at your request, commissioner brandon we'll present these quarterly and do an annual wrap up. the diversity tracking system is being put in to get this accurately reported. so we appreciate your patience in getting this. megan and i are here to answer any questions. >> thank you, any public comment? hearing none, commisioners, questions? >> once again, i want to commend you for exceeding the goal and it looks like we're doing great on as-needed and professional services. i was wondering why the construction goal is only 15%? >> i may call my engineering colleagues to speak to this. the engineering goals are set based on the trades and

available of lbes per trade and looks to the type of bid packages in any scope of work and says what is the maximum reasonable amount that we could achieve based on the big packages? for some of our work, over water construction, pile-driving, elevator/escalator work, we have shortages of lbe firms and that is why you will see, if you look across exhibit -- i believe it's exhibit 2, construction contract there's is a variety of goals per project that reflect the differences in available of lbes. what can we do do increase that goal? >> that is a very good question. some of it is on workforce development side and for example, the pile-driving apprenticeship program. other thing is good advertisements, but in terms of

just expanding the capacity of the lbes, it's really on the labor force development side. so those are some of the key things that the port has done. >> okay. because that is the bulk of our contracting. so it just seems that we could do a little better. if we can help in any way, please let us know. >> okay. i just had a question, i guess, on this as-needed annual contract service orders. so just so i understand, like under "real estate professional services ," so the contract amount in total is $2.1, but do i understand that we only spent

$601,000? >> that is right. >> so we're not necessarily -- and nwcn what your forecast is -- to say that we would spend the full $2.1, because we have two contracts. >> it's not a forecasting report in terms of where we'll end the contract terms. are those two or three-year terms? they are three-year terms and so it's reflecting how much we spent in the last year of those contract terms. >> okay. so we may not spend the full $2.1 million? >> i believe we did, didn't we? >> we did spend it? >> yes, we got very near to it. prepare for the commission's review that. that is just not what this attachment does. >> and i would be interested

in professional services, if we're sending this much every year on consultants, versus if we just hired staff ourselves. i know in some case it's specialized, but we're spending a lot of money on that versus filling that need internally. i realize there is difficult to get the hiring, but it does seem if you are spending money on consultants versus staffing, and monique, you have an opinion on that? >> no. sorry, not at this time. i will get back to you. >> okay. so some of these consultants on the engineering end, the real estate side, i guess what are some of the areas that are they filling in for us that we don't have internally? >> there is a wide range of services. i could ask either real estate or planning and development to speak to it? i will start and you can all jump in. jonathan, do you want to speak

to the real estate as-needed? i think it's better if the project managers speak to it. >> the real estate as-needed contracts represent a broad range of services and they really depending on what projects in our pipeline at a given time. so the actual work flow can be very uneven. and the work consists of two main kinds of work. one is so in order if you will extension of staff, which i think commissioner woo ho what you are referring to asking the good question if you should just staff-up? and third party opinions, specifically to either verify our work or to help in these situations, which one way or another, end up in negotiations. so that is one of the reasons for us to use those purposes. i would also say that i think

this past year, or really two years has shown our work can be very variable, with the america's cup and the bigger projects happening right now. that is hard for us to foresee, and it's very different than it has been in years past. so think the as-need contracts help even out the staff capacity. >> good afternoon, commissioners. senior engineer of the port. i just want to point out some of the as-needed professional engineering services includes, like, technical investigation work, which usually is not done by the city staff. and also, the cost of work, we don't have a professional estimator, so we always use our as-needed consultants to help us on that.

and we have seen quite a bit of work within the past couple of years, because of america's cup and other projects. but as these projects kind of wrap up, i don't expect this kind of workload. so in the future, i think we can manage switching staff, and most likely we won't need, as much as-needed services. but at this moment, i see this as a temporary kind of fill-in from our as-needed consultants. >> thank you. any other questions? >> i would like to know what does it really mean when it says, "totally environmental and related ?" is it

everything related to environmental? >> we're using that terminology ototal environmental and related to describe our environmental as-needed pool. so i think it's primarily environmental analysis in consulting, but services and related that would cover the gamete of environmental analyses. >> thank you. >> i don't know that we need any formal action? do we? thank you >> item 13, new business. >> any public comment on new business? hearing none. >> item 14, public comment. >> public comment, we have john decastro.

>> hello, i'm john decastro, a tenant and i do appreciate the commission directing the staff to come down and talk to us yesterday. we had almost 100 tenants at the hall down there, listening to our information and the staff has agreed to drop the electric charge, which we appreciate, until the metering is done on the piers. so that is very good. what i am concerned about is the staff does not seem to have listened to the concerns of the tenants regarding the parking and setting of rates at parity with other public harbors and i find there is minimal understanding or compassion regarding the lack of parking down there. and they are saying to live with it. we have had 205 spaces, but 205 space goes back to 1985. it