savings. to be specific about what the activities we will be doing under this two-year contract period is to support san francisco's building benchmark initiatives using our engineering staff to provide more comprehensive energy audits and technical assistance to small businesses and multi-family property owners. energy systems analysis to improve small facilities, comprehensive -- to fund a comprehensive multi-lingual grassroots community outreach campaign, and integrate technology and new emerging technologies and to community facilities and replace old refrigeration units and restaurants and convenience stores. for outreach kind of plan for 2013 moving forward, we've been spending a lot of time looking at lessons learned from previous campaigns. we want to develop more strategic outreach activities and marketing campaigns, utilizing san francisco's gis

mapping systems to identify key target market street in san francisco. and although we've been very successful, there are some areas that we feel internally that we need to work on. a couple of things that we're looking at is specializing products to targeted business sectors. so, looking at led light changes and looking at art galleries, retail stores, small restaurants, kind of cocktail lounges, establishments and hotels as kind of our target audience. and again looking at changing out refrigeration units at small convenience stores, kind of the neighborhood-based stores. in addition, kind of the other area that we want to focus on is what we call hard to reach businesses. we're very good at the street level business if you have a store front. our outreach team can come in, knock on your door and have a conversation about the program and what benefits it has. but in looking at our data, there are about 1500 businesses that we know of in san

francisco that are on -- not on the store front, but they're in multi-unit buildings, second floor, third floor buildings that also can benefit from the program. so, accessing those areas. and then we're looking at very much our data and targeting to make sure the program really impacts and reaches out to those businesses where english may not be their first language. so, really building our bilingual staff to continue to assist customers who don't speak english, helping them with the process, and tracking that better so we can be a bit more responsive. so, for these types of outreach standards, we look forward to working with -- continue to work with our merchants associations and business associations and certainly welcome working with your individual offices to kind of target some of these programs that we can outreach to. when i came in semi shared with you kind of the map of san francisco. and all of our programs. so, we are in most of the

commercial corridors, but we're looking to go deeper. we've done kind of the basic level, but we're looking to go deeper and get into some of the businesses we've missed in the first round of campaigns. so, i'm happy to answer any questions. my colleague ann kelly and i are here. thank you. >> thank you. supervisor avalos? >> thank you. mostly i'm interested in seeing how reaching out to the harvest of businesses. and i imagine in my district, places like san bruno as well, many other places there are a lot of businesses that have linguistic needs that we need to have expertise as a city to reach out to. i've actually been out with the folks talking to business leaders as well or businesses, representatives in my district. just wondering when we look at a map of san francisco and we're seeing where we're able to achieve changes to technology within the businesses, are we seeing clusters in certain areas and less so in other parts of san francisco? >> so, the energy watch program

that's before you today, it's targeted for small businesses and multi-family buildings. so, when you look at the map for energy watch program, you'll see participation along your business corridors. so, san bruno avenue, mission, you'll see where we've impacted. and then also where the large concentration of businesses are. so, certainly in the downtown sector, chinatown, for example, have all been very large concentration of businesses in san francisco and equally high participants in our program. so, again, for the energy watch program that's kind of what our focus is on. and, so, our hope and goal is now to kind of go back and look at those businesses surrounding those who have successfully subscribed to the program and kind of worked with the neighboring businesses and be able to say, look, business b, your next door business participated and had savings on their pg&e bill t. was a minor

cost to them with a significant investment to really try to make the linkages along -- >> so, where would you see -- are we seeing -- i imagine we're not seeing uniform subscription to the program across san francisco. * and so, where are we seeing the great of the concentration is what i'm -- >> it really is -- the greatest concentration really are those street fronts, stores along the business corridors. so, your main business corridors here in san francisco, all the main business corridors, we have participation. so, it's really the program nearest where the cluster of all businesses are. in terms of participation rates. now, what we're trying to look at is, again, some targeted programs, again, making sure that as we said, you know, with led light changing. so, we've been very successful with hitting a lot of the major hotels in san francisco, but now we want to look at those other businesses that are also

light intensive. so, art galleries, performance bases. we're again trying to submarket or subcategorize a business so that we can really begin to target them much more effectively than simply just walking by, leaving a leaflet and moving on to the next business, but really working with targeted businesses and helping them enroll into the program because it is an application process. do those audits i mentioned so they actually understand the actual savings that they can realize on a monthly basis. >> thank you. just one last question, that's whether the outreach we're doing to small businesses through this program, could they also do outreach around clean power sf? that will be the outreach program we have coming forward. is that something this group of people will be eligible to do? >> so, on the outreach for clean power sf, as supervisors may know, the department of the environment for environment now

program, we are working with the san francisco public utilities commission to do a grassroots multi-lingual outreach component to educate folks about their options under clean power sf. so, we do have that component and group of individuals that will be canvassing san francisco with respect to clean power. we have a group of outreach specialists that's specifically for energy watch. and at least from our perspective at this moment, the two are not mutually exclusive, but to not confuse a customer with multiple messages, we've kept the two programs, two outreach programs separate at this point. >> but there's no like firewall between the two -- >> i don't know if there is a firewall. it's something i'll have to get back to you and the committee on. if there is any prohibition between marketing these programs and clean power sf. >> following up on supervisor avalos' comments around where

your outreach or where the program participants are, i know that you said that it narrows the merchant areas. i guess the question i would also have is are you seeing higher pick up or participation in certain merchant areas versus others and why that would be? so, i guess for you, i'm wondering if the department might be able to provide to us sort of where the concentrations are, what the percentage of pick up in different merchant areas arer districts might be. that would be helpful illustration for us. >> certainly. >> thank you. supervisor kim? >> thank you. actually, i think just to follow-up on supervisor avalos's questions, maybe it would be useful to get kind of the numbers in each of the corridors just so we have a really good sense. i assume participation is great on these corridors. but it would be interesting. and i also have some ideas as well. so, i would like to chat with department he of environment as well in hopes that we can do outreach if we have not already. * this is separate from the grant because this is targeting small businesses, but it did make me think about maybe some of the

larger contracts that we might have from those that provide shelter in soup kitchens. they might be large electricity generators, energy users, but also i mean it's a benefit to us to help them reduce costs as well. >> absolutely. >> so, i'd be interested in seeing how we can, you know, see if there are avenues we can pursue around that. i imagine our schools, too, i don't know what's happening in our schools around large refrigeration and all those sorts of things. >> happy to follow-up on those items with you. >> thank you. >> thank you. there is not a budget analyst report with this. but i did want to ask you about the program expenditures overall. it's a $13 million program that is spread out over two years. and just taking a look at the breakdown, it generally is broken down into different categories, whether it's personnel, contracts to really help administrative and technical support, incentive dollars in direct costs, et cetera. so of the $13 million only $6 million is going to

participants. that seems fairly low. it's sort of less than half. so, i just want to understand why. is there something that i'm missing here, some other value added that your staff or other folks are adding on? i mean, because you've got $3 million in personnel who do things like fiscal and accounting support to program implementation development, but you also have overhead expenses of another 1.5 and then you've got processing fees and other things worth another 2.2. so, to me it doesn't sound like we're maximizing the dollars that could go out to participants. can you explain that a bit? >> well, i'm going to ask my colleague ann kelly to help with the budget. >> good morning, supervisors, i'm ann kelly with the department [speaker not understood] program. i'd like to say that half the budget of any of these programs goes directly -- it benefits to customers. but that is a really good

[speaker not understood] compared to others. and ours has always been the 50/50. this past year it went to like 60/40, end in 2012. going forward, the reason there's a change is because of all these innovative projects that guillermo was telling you about. they added an extra $.4 million to our standard budget which was 50/50. * and they added that on. and they can't claim savings for those. so, even if we use those programs and design them so that we get energy savings, we're not allowed to claim them towards the goals of pg&e. so, it looks like they're not getting the benefits, but we've got a great technical -- technical staff of engineers who go out and provide all kinds of services that aren't captured under the direct incentive, but they are benefits, they're extremely good benefits. that's part of the reason our program is so successful because we have experienced

engineers describing the benefits and we get a greater uptake. i would say that compared to all of the programs, 50/50 is actually good. >> so, what is the benchmark, where does that come from? from other grants within your department? is that what you're benchmarking the 50% to? >> no, it's from all the i o.u. programs, investor owned utilities throughout the state. not just pg&e's territory, but southern california edison, southern california gas. they file with public utilities commission and they have to breakdown their budget in all different ways. generally pg&e overall does not get 50/50 ever. so, when an individual program shows that or above, it's considered to be very successful, and our energy watch program is the most successful local government partnership in pg&e's territory and has been. >> okay. and could you explain, i guess, in terms of the personnel, that

you have managers, managers, specialists, account associated engineers and administrative analysts, it sounds to me from what you just mentioned that part of their benefit is doing the outreach education, audit, other things that might be part of the program that is not captured in the $6 million, is that right? >>that's correct. >> would you be able to sort of ballpark what of this is truly sort of administrative work versus sort of direct -- >> administrative work is usually about 8%, 5 to 8%. marketing is about 10% and all the rest is technical assistance on that 50% and the other 50% -- >> so, if i can ask the department in the ensuing weeks before i come to the board, if you can flesh out sort of the work of these folks who are within your personnel and really help us to highlight, are these folks doing direct outreach work to our businesses are they really providing sort of audit work and other things that are of benefit to participants verse urs purely administrative things? i think that would be really

interesting for us. i mean, frankly it might be the same for many of the investor-owned utilities that a 50% rate is great, but it sounds awfully low. when you have $13 million and you seem to see that only 6 million is going to directly benefit participants, it sounds like that is not the case because there's other benefits associated with it. so, help us flesh that out. >> the direct benefit is -- the 50% is direct financial benefit. so, they get reduced. that's the difference. there are other benefits. >> right. so, help us flesh out the pieces that are not the direct financial benefit. >> okay, all right. >> thank you. >> anything else? >> no. thank you. okay. colleagues, this item does not have a budget analyst report with it. so, why don't we open this item up for tion. public comment. are there members who wish to speak on item 4? good morning, supervisors. my name is douglas yip. looking at this meeting agenda, i notice that this item number

4 also appears on page 3 and on page 3 it says the following legislation will not be considered in this meeting. both of them have the same reference number, 121 196. so, maybe we should add least explain to the viewers what is exactly going on here. thank you. >> thank you very much. are there other members of the public who wish to speak on this item? seeing none, public comment is closed. thank you. >> i believe what mr. yip is referring to is legislation under the 30-day rule. is that correct? this might be a question for the city attorney. thank you for bringing that up for us.

>> john gibner, deputy city attorney. i left my agenda in the office. but yes, the same item is listed in the section of the agenda for legislation under the 30-day rule. and that does not preclude -- i think thats was probably an error and it doesn't preclude the committee from acting on the item today. >> okay. so, we have the item agendized on the calendar that has given the public notice that we are hearing this item today. it is also listed under legislation for 30-day rule. but for -- from the opinion of the city attorney given that it has been publicly noticed as an agenda item for today, it's something that the board can move forward with? >> that's correct. >> okay. >> madam chair, the president also waived the 30-day rule on this item. >> okay. is this simply a clerical error that it appears -- >> yes, it is a clerical error. >> okay. so, colleagues, given that information, we do have the item before us. we also have an amendment before us.

the amendment is simply to change the number of employees or individuals to be hired. i think there was an addition of 5 that was indicated in the text. it should read 3. do we have amendment to change that? here we have a motion to make that amendment and we'll do that without objection. and then to the underlying item as amended do we have a motion? >> [speaker not understood]. >> to the underlying item as amended we have a motion to move the item forward without objection and we'll do that without objection. thank you very much. item 5, please. >> item number 5 is a resolution approving and authorizing the execution of modification no. 1 of lease and use agreement l10-0082 with china airlines, limited, effective january 1, 2013, for administrative office space in the international terminal at the san francisco international airport. >> we have cathy wagoner with the airport on this item. >> good morning, chair chu, member of the committee. cathy with the airport. san francisco airport is seeking your approval for the first modification to our existing lease with china airlines in order to add 4 39

square feet of administrative office space in the international terminal to this lease. * china airlines currently leases 3,409 square feet of space, which is made up of their ticket office, a passenger lounge, an office on the ramp, as well as their joint use of space in the international terminal. this was approved by the board in may of 2010 as part of the airport's larger lease and use agreement with the -- with our airlines. and china airlines pays the airport an annual rent of approximately $580,000 of this portion of the lease and use agreement. under the proposed resolution, china airlines would increase their lease space biana editional 4 39 square feet. * giving them a total lease space of 3,848 square feet and an increase annual rent payable to

the airport of 6 12,3 88 dollars. the budget analyst office has recommended approval and i would be happy to answer any questions you might have. >> thank you very much. why don't we go to the budget analyst report. >> madam chair, members of the committee, on page 5 of our report as ms. wagoner has already indicated and as our report states, the proposed amendment to the existing lease would result in an increased rent of 75,973 per year from 587,33 to 6 56,7 06. we recommend that you do approve this resolution. >> thank you very much. why don't we open this item up for public comment. are there 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? we have a motion to send the item forward with recommendation and we'll do that without objection. thank you very much. item 6. >> item number 6, resolution approving port commission's

second amendment to lease no. l-15169 with autodesk, inc., a delaware corporation for the lease of office space and unimproved shed space at pier 9 in the northern waterfront with a 120 month term. >> thank you. i believe we have jeff bower from the port on this item. >> good morning, supervisors. jeff, the port leasing manager, seeking your approval to the second amendment to the autodesk lease. the original lease was for premises at pier 9 that was approved by the port commission in september. and that was to house their recently acquired company, web-based company called instructable. that was about 8500 square feet. a few months subsequent to that, autodesk came back with another space need. this time wishing to add about 18,000 square feet of office and unapproved shed space. we were more than happy to accommodate that space need. that was approved by the port commission in october. it does require board of supervisors approval.

the monthly rent is $55,000. it provides for an amortized rent credit of about 2.8 million. and guaranteed investment in the port property of about $7 million. and i'm happy to answer any questions that you might have. >> thank you very much. just a quick question. i think that the budget analyst raised this issue about the competitive bid, noncompetitive bid process. can you speak a little about the port's processes with regards to this? >> well, the port adopts a [speaker not understood] rent policy. i do market surveying. based on that i go to the commission. the commission allows me to negotiate leases. within certain business parameters. no retail. can't exceed five years, must be under a million dollars. we do about 150 leases a year. so, this allows us to act, you know, act in a very

business-like manner, but we do simple office leases to storage, [speaker not understood] storage. this lease was outside of those parameters and did require the port commission approval and the board of supervisors. * we take all cars. i act as a broker of the port. i got a call from autodesk seeking some space back in the summer and the very next phone call to receive, we toured and we talked for a month or so. we identified pier 9. and proceeded with the lease. so, we see this, it's a lease. it's really a lease with an icim improvement. if someone else would come to us, another company, for example, which would be terrific, we could find them space at other port facilities. >> so, the original contract, the original contract began one that was in september? >> yes. >> that one actually did not require board approval for that. >> it did not.

it was outside the parameters. it did require port commission approval, but it did not meet the threshold to come to the board of supervisors. >> and then once the organization came back and required our requested additional space, it triggered then -- >> correct. >> the need to come to the board for approval? >> yes. being it's a ten-year lease, so, that's a trigger. total lease revenues are over a million dollars, in this case probably closer to 8. that's the trigger. >> all right. if there are no questions from the committee at this time, why don't we go to the budget analyst report. >> madam chair and members of the committee, on page 8 of our report, we point out that the total net revenue that the port would receive under the proposed second amendment for the first year would be $223,53 2. and then an estimated 4,474,6 76 over the 10 year lease term

and that's shown in table 3 on page 9 of our report. the initial monthly rent for the approximately 27,190 square feet at pier 9 is 55,444 as projected to commence on july 15, 2013. * on page 10 of our report, we note that according to page 1 line 22 of the proposed resolution, the increase of square footage from the original lease to the proposed second amendment is shown as 18,4 99 square feet. the correct amount is an increase of 18,7 99 square feet. and we also point out on page 10 * as has been discussed by the committee, the port does not competitively bid the original lease with autodesk consisting with port practice, [speaker not understood] warehouse shed space. because the city's administrative code section

2.6-1 requires that leases the city-owned property be competitively bid unless the board of supervisors finds that the bidding procedures for the leases are impractical or impossible, we consider approval of the proposed second amendment to be a policy matter for the board of supervisors and our recommendation on the bottom of page 10 is to amend the proposed resolution for the correct square footage, which i just noted would be 18,7 99. and as i stated we consider approval of this resolution to be a policy matter for the board. >> thank you. i did have a question for you, jeff. just in terms of the space that would be occupied by the new lease, is there any other tenant that is currently in there or is it open space that is not currently being used? >> well, under the original lease, we did have to move a trash enclosure. we had a construction container, we had parking spaces because it's a shed. so, we managed to relocate

those tenants. the second amendment, we had to terminate -- we engaged in a mutual termination with an existing tenant dna direct who invested actually quite a bit of money. they were recently sold to another company and anxious to get out of their lease. we were able to include that at the autodesk lease. really there's no downside revenue wise. >> the tenant that had to be relocated from this extension mutually wanted to leave that lease it sounds like. >> well, they wanted to terminate. that would be the larger dna direct. the second tenant, i believe you're referring to is cabishon properties. they are an existing tenant, smaller tenant. we were fortunately able to relocate them to another office at pier 9 and we were very fortunate that autodesk was able to pay for the development of that office lease in the

amount of $225,000, which is another added benefit. it was a substandard office, really it had been vacant for 7 or 8 years. >> thank you. supervisor avalos? >> thank you, chair chu. just a couple quick questions about the availability of space on northern waterfront on port property. are there a lot of space you're trying to rent out? is there a continual process of putting it out to bid the spaceses? >> well, i will be before you for a restaurant lease hopefully shortly in several months we put out to bid. * if it's retail, parking concession, we will put it out to bid. if it's for example the northern waterfront round house, office leases, you know, we have a place on our website. we send out fliers. we participate with the brokerage community, not payment, but participate. so, we're really in the leasing business. we do have a potential property

that we're going to bid out that we see the best and highest best use -- highest and best use is a retail and office. so, in that case, many development -- our method of advertising would be a request for proposal. >> and, so, do we have a lot of businesses like say autodesk businesses that are actually approaching us for the port, looking to take up space? or this is just -- >> absolutely. i was before you with a company called ammunition, which is one of the leading design development firms in san francisco. ideo, we just -- we were able to expand their premises there, again, a design and development firm. i'm working with a high-tech start-up company for office space. it's i would say 30% of the

requests are from high-tech companies, if you will. >> thank you. >> thank you very much. we've heard the budget analyst report. given no questions at this time, i'd like to open this item up for public comment. are there members of the public who wish to speak on item number 6? seeing none, public comment is closed. okay, colleagues, we have this item before us. i believe we do have a budget analyst recommendation. do we have a motion to accept the budget analyst recommendation? >> [inaudible]. >> we have a motion to accept and we'll do that without objection. and then to the underlying item as amended, do we have a motion to send this item forward with recommendation? >> i would move -- make that motion, but i would like there to be actually that communication with the board about whether we're going to be waiving the competitive bid process in the future. i just think it's important because of that process and be informed of that rather than have it here done at committee all at the same time. >> we agree, we will be addressing this