commission so recommendation from the port commission to be more explicit in this. >> thank you. i think that makes a lot of sense. i know that in the first round or at least for the first lease it wasn't required to come through the board and therefore the board did not have to waive the competitive bid requirement. but in the second piece of it, because the second piece triggered the requirement to come back to the board, then it would have required a competitive bid process to be waived by the board. so, for us to work together with your port commission to figure out the best way to communicate, it would be great. >> we agree. >> thank you. supervisor kim? >> thank you so much. >> i just wanted to say the same thing, that generally of course, i prefer things to go out for competitive bid. i understand kind of the historic nature of this in terms of autodesk already being on-site and looking to expand which is why i'm a co-sponsor of this legislation and will be supporting this. but overall i think that is generally our principle. of course we don't want it to be a practice that this is a way that we can get around a competitive bid process because we can start out with a smaller

lease or contract that doesn't have to come to the board and expand it at a later time and then it come to the board when it's a little late for us to request. >> sure. [speaker not understood] of that issue. >> thank you. thank you, supervisors, and thank you for your presentation. and we've got the item, i think there is a motion on the floor to send the item forward as amend with recommendation and i believe we can do that without objection. thank you. >> thank you, supervisors. >> thank you. item 7, please. >> item number 7 is a resolution approving amendment no. 2 to contract no. cs-163-1, insurance brokerage services for an owner controlled insurance program to provide excess liability insurance for the central subway project with aon risk insurance services west, inc., to obtain and bind a second tier of liability insurance for the amount not to exceed $8,280,000. >> same thing, i believe we have arthur wong from mta. >> good morning, madam chair, members of the committee. my name is arthur wong, construction manager for [speaker not understood] project. the central subway project is seeking approval of amendment number 2 for aon insurance west

to acquire additional insurance for central subway project that will be used for the construction of central subway's station contracts. we are now in the process of bidding the tunnel contractors, the project station contracts. last year we received -- actually went out to bid for two stations, chinatown station and the union square market street station. the feedback we received from those particular bidder that provided bids and were considering bidding indicated that the price for the insurance that we required were again to be noticeably high, abnormally high. we verified that through our broker aon who said, yes, it looks like it was actually getting to be high. so, we've taken steps by asking aon what are the possibilities

of trying to contain that cost. in doing that we came up with a method of providing a way of insurance that is above what we would require the contractor to still cover what we needed, which is $200 million. so, amendment number 2 actually provides $150 million and we'll be asking the station contractor to provide a $50 million contract. in doing this we essentially will rely on the contractors to provide their own insurance that they already have as a corporate policy so they don't have to seek that contract -- that additional insurance. whereas if they had to provide $200 million they had to market and go through brokers. at the same time, other bidders are doing the same thing. so, there are essentially multiple bidders going after one source of insurance essentially. with that, we would like to try to contain our costs in that one area.

if you have any questions, i certainly could help answer them. >> i believe you have representatives of aon. >> yes we do. >> do they have anything to add to this presentation? use the microphone, please. >> i would just add that the approach is to reduce the cost that's already burdened in the construction contract by not having the contractors provide the full 200 million, but only provide the 50 million and buy the buffer layer of 150 million in a more cost-effective way. thank you. >> thank you. colleagues, do we have any questions? if not, we'll go to the budget analyst report on this item. >> madam chair, members of the committee, on page 5 of our report we report that the estimated increase cost for the additional 150 million of excess liability insurance coverage to be provided by the sfmta payable by the sfmta to aon insurance is $8,2 80,000

and that's shown in table 2 on page 5 of our report. and then we also point out on the last page of the report, page 7 under policy consideration, we state that based on an entry by the budget analyst office report, they expended 9,271,240 on the first tier of excess liability insurance which is 5 37,510 less than the existing not to exceed authorized amount of 9.8 million. normally we would make a recommendation, then, to reduce the requested -- the not to exceed new requested amount of $18 million, 18,88 7,750. [speaker not understood]. however, the department and the city attorney's office has

explained to us that by making such an amendment, that would delay implementation of obtaining this insurance which is needed on a timely basis. so, therefore, we have suggested a result for us which is shown on the bottom of page 7 of our report, quote, for the resolve of the san francisco municipal transportation agency acknowledges that the needed aon contract expenditures are $17,55 1,240 which is 5 37,510 less than the contract not to exceed amount of 18,88 7,750 under the proposed second amendment and we recommend that you approve the proposed resolution as amended. >> thank you very much. just a quick question, follow-up question to aon perhaps. essentially what's happening here is we're shifting the $150 million insurance responsibility from the contractor to the mta to do basically. i'm wondering what is the difference, why is it that it's cheaper for us, end up being

cheaper for us to shift that responsibility onto the mta as opposed to having the contractor go out and look for it? do we have a more i guess competitive process where the city ends up having a more favorable rate, insurance rate? what is it that is resulting in the savings? >> so, there's two forces working in favor of this solution versus the contractors procuring it. one is that this program, the central subway program, already used capacity in the marketplace for the tunneling contract when it requested the marketplace to provide 500 million. so, it utilized a lot of capacity for those insurance companies that are actually providers of this type of work. so, it's a finite group of insurance companies which -- of which 500 million was already used for the tunneling contract. so, when this new contract came out to bid, which requires 200 million, it was already fatigued in the marketplace so that it's now become a seller's marketplace, not a buyer's marketplace. so, the contractors are also subject to what they can find

in the marketplace through a finite group of people. the city which had already purchased a high excess layer on the tunnel contract has more leverage in the marketplace to dictate the terms that it needs without having to dictate the contractor that would be selected. >> thank you. >> thank you. >> okay, colleagues, we've heard the budget analyst report. and if there are 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 7? good afternoon, supervisors. my name is douglas yip. i would like to speak in opposition to this resolution. listening to what i heard just now, it seems to me to confirm my own analysis that this is a very high-risk project. and if the city wants to improve access through the

underground transportation system, i would suggest you follow-up improving the j church line which has been discussed. and also the switching problems at duboce and embarcadaro areas. so, i think the insurance that's being discussed now, it seems to me like there's references that have kind of a high cost. and realistically high costs reflects the high risk inherent in the project. so, maybe somebody is trying to get someone's attention that maybe you need a lot more insurance at a lot higher cost because ultimately there's going to be a lot higher risk in the future. thank you. >> thank you. are there other members of the public who wish to speak on this item number 7? seeing none, public comment is closed. thank you. just in response to the previous speaker, i know many folks have come forward and have asked the board or other

decision makers to divert money from central subway and to use it towards fixing muni or to doing other work. i think it is important for members of the public to know that that money is actually not transferrable. it is money that was provided by the federal government specifically for the central subway program and is not eligible for use for fixing the j church. the city would have to forego that money and look for other sources in order to do that work. so, i think it's very important that people understand that. i think any time we're building anything underground, especially in a municipality like san francisco where we're highly developed above ground, it is always going to be something that we're watching very closely and have to mitigate with insurance. and the issue that we have before us today is simply saying that we're going to purchase the same amount of insurance we previously wanted to have, but we're going to do it at a lower price. that is really the issue that is before us today. i want it make sure the members of the public are aware of that issue. so, colleagues, we do have the item before us. we heard public comment and we also have an amendment from the

budget analyst. do we have a motion to accept that amendment? >> motion to accept the amendment and move forward with the underlying resolution -- or legislation [speaker not understood]. >> thank you very much. so, we have a motion to a medctionedth legislation per the budget analyst recommendation and to move the underlying item as recommended to the full board with recommendation and we can do that without objection. thank you very much. madam clerk, do we have any other items before us? >> no, there are no further matters. >> okay. before we adjourn, i do want to recognize lincoln high school students and ms. valerie siegler who has come to observe city hall in action. thank you so much for coming and we are adjourned. [adjourned]

>> my name is phil ginsburg and the general manager of the san francisco parks and rec department and i want to welcome everybody to the 83rd annual holiday tree lighting. happy holidays to you all. this is san francisco's official holiday tree right behind us, uncle john's tree and over 100

years old, and tonight it sports over 550 christmas holiday lights. >> five, four, three, two, one! >> yay!

ing please call the role. >> director bridget. >> brinkman? >> present. >> director heinicke is anticipated. director lee? >> present.

>> director nolan? present. rib key present. mr. chairman, directors, you have a quorum. announcement of produce sound producing devices during the meeting please be advised the ringing of cell phones, pagers and other similar sound producing electronic devices are prohibited at the meeting. any person responsible for one going off in the meeting may be asked to leave the room. and please know that cell phones that are put on the vibrate position do cause microphone interference so the board respectfully request they be placed in the off tion position. full approval of the minutes of november 20, 2012 regular meeting. >> motion. >> second. >> all in favor say aye? >> aye. >> so ordered. >> item 5, communications. >> okay. ms. boomer, on this one, members of the board, because there are two issues today there are not going to be a whole lot of people. what i'd like to do is to begin with asking a question of the people in the audience here today, how many people want to speak on the free muni for youth? issue? if you want to speak, please

raise your hand. >> free muni for youth. >> how many here to speak on behalf of the [inaudible]? >> how many people want to speak on the free muni for youth proposal? >> so, we've got three people. how many want to speak on behalf of -- how about the central subway issue? okay. we have very few members, what i'd like to do is do the free muni issue right away. that's 10.3 on our agenda. we don't need a staff report. remind that you this board -- the policy we have, we are doing this because the money has been found through the mta and through supervisor campos' leadership. so, with that let me ask supervisor campos to come and join us, please. >> all right. let me read it into the record. item 10.3, authorizing the director to accept and expend $6.7 million in fy 2013 transit sustainability project funding from the mtc, to be used for the free muni for low income youth program and the light rail vehicle rehabilitation project from the mtc to be used for the free muni for low-income youth program and the light rail vehicle

rehabilitation project. >> supervisor, good afternoon. welcome. >> good afternoon, mr. president. , commissioners. thank you very much for giving me this opportunity to address you today. and if i may, i'd like to begin by asking all of the community members who are here to speak in support, to be here in support of free muni for low-income youth to please stand * so that you can see them. >> good work. >> thank you very much. thank you very much. you can sit. thank you. as you can see, there are many supporters here and the overflow room as well. and i also want to acknowledge the many youth and parents and community members who have been working on this not for a year, but two years, who could not be here today. and i want to begin by also thanking this board of directors for what is clearly going to be a very historic vote here in the city and county of san francisco. not only does it address the immediate needs of getting our

youth to school and other activities, but it also makes a very strong statement that our local transit agency and the city and county of san francisco value our young people, value our families, and that this agency wants to build a new generation of public transit riders. it is because of these riders that ultimately the system will be sustained. and i want to also highlight the tremendous leadership not only on this issue, but on zombie the head of transportation city and county of san francisco, ed rifkin who has been instrumental, not only in this effort, but in so many efforts to improve public transit here in the city and county. our path to this historic day has been a long one as you know. over the past three years we have heard from low-income and middle income families across san francisco. but the drive ambition of our youth and parents and community is ultimately what got us to this point. and i am especially grateful to six organizations that have

helped raise the funding power. chinatown community center, the san francisco youth commission, urban habitat, the student advisory council, and jamestown community center. i also want to thank so many folks throughout the city who have, you know, taken the time to pitch this, this program. and just to close, my colleagues on the board of supervisors, supervisors avalos, chu, kim, mar, our mayor has been supportive of this. it is a very historic time and i want to thank you for the opportunity. and if i may, i know that we have one member of this coalition who is here to speak. and, so, i will -- if it's okay with you, i will turn it over to her. thank you. >> thank you, supervisor. (applause) >> good afternoon.

[speaking through interpreter] -- spanish interpreter] good afternoon, my name is elena martinez from power. i know many families that will benefit from this program. and thank you for investing in the future of our children. thank you to the director board. on behalf of the community and all families and children, we know that this wouldn't be possible without our movement and working together. thank you very much. (applause) >> thank you. members, we have a motion on 10.3. >> sorry, we need to see if there is any -- >> is there any other on this item alone? seeing none on this item, is

there a motion on 10.3? >> so moved. >> second. >> second. >> any further discussion? absolutely, director heinicke. >> thank you. i appreciate the speed with which this is moving and i appreciate supervisor campos' comments. he and i don't always agree on items, but we talk it out and i find him to be a genuine and thoughtful person and i appreciate the passion he's shown on this. director reiskin, i have two questions on. this supervisor campos, if you want to address any of this, we're addressing it on the consent calendar. it certainly wasn't an item of unanimous consent at the board of supervisors, but surely you did get the majority vote there. director rifkin, when we first proposed this, we made very clear, i think as a group to the community, that if they found new funding for this, we were not opposed to this on policy ground. that obviously the idea of providing reduced or even free fares for the truly under

privileged children in our community is a noble idea and one that i think we all agree is worthy of pursuing from a policy standpoint. but when we reached that sort of agreement, one of the points was that it be new money. and i think we've heard from some members of the board of supervisors and some members of the community the concern that this money is not really new money earmarked for this. it's discretionary money that we could have spent on something else. and, so, maybe i just say, what is your reaction to that particular, and you know, how do you weigh the benefits of spending this discretionary money on service upgrades or something like that as opposed to this project? >> what i would say is i think that's all correct and those are valid, legitimate points. when we had the discussion here back in the spring, and when the mta board approved this, it was contingent on funding from the mtc.

so, actually in terms of the letter of the resolution that was adopted, what we're doing here is fully consistent. what is different is that the discussion that we had surrounding that approval was the understanding that the identified source at that time from the mtc were funds that wouldn't otherwise be coming to the mta and that were otherwise available to us. we did -- i will remind you that that detail, notwithstanding the only division on this board, was whether to support a program of free for low-income youth versus free for all youth. but ultimately we had unanimous support from this board for the pilot program we proposed which would have been the 22-month pilot with that mtc money. so, fast forward, that funding source didn't come through, but i think -- but then this program was developed by the mtc and i would imagine

supervisor campos will comment on his role in that and how this came together. but this was a specific grant program called the transit performance initiative that had as an explicit goal increased ridership and had as an explicit eligible program a low-income youth fare program and that's not coincidental. and that's as a request. >> sure. >> so, given that the guidelines of this grant program and weighing against the needs that we have, which i think i communicated to the board in a letter some of those needs on the maintenance side were, it seemed like we had a good opportunity to address both needs through this grant program. the lion's share of the grant funds will go towards lrv rehab, light rare vehicle rehab program -- light rail -- which is a critical need that we have. you the smaller portion of the

funds will enable us to fund smaller, now a 16-month free muni for youth for low-income youth pilot that i believe is, you know, very consistent with the spirit of the unanimous support of the board for the program. * and it's a balancing of different needs. we have needs of the system. we have needs of the community. these grant dollars i think are well positioned to enable us to serve both. >> right. and just to focus the question, and please address this, as i said at the very outset of this discussion, i think it's important we as a board keep our promises and that's why i was very sort of reticent to make too many promises and said so in the first instance. i didn't want to promise a program we couldn't then fund. so, here my question is specifically -- and i realize this doesn't end the debate. but do you feel that our original resolution sort of binds us to do this today, given the funding we have from

the mtc? or are we really evaluating this anew to see whether this is new money and whether this is a good use of it balanced in the program? >> i don't believe the resolution binds you because this board can adopt a different resolution that does something different. this use of funds is fully consistent with the words of that resolution. and i believe is consistent with the spirit, even though the funding source is slightly different. what you're approving here today is not the youth pilot program per se. it's really our expenditure program for this particular grant, that the mtc is requiring have the agency board approval for regardless of how we were going to use these funds. >> so, are we going to approve how we use these funds at a later point? >> no, this is where you're approving how to use these funds. and it's the specific allocation of the majority for the light rail vehicle rehab and the smaller portion for the

youth paths. we will bring next year a similar accept and spend resolution for your consideration that will have a similar split of funding for maintenance and for the balance of the youth fare program. >> and my other question will be how sure are we of this cost figure? because, you know, the month, it's been condensed in time and we don't rile have an idea of how many people will sign up for this. so, i'll put that out there, but i certainly want to give supervisor campos a chance to speak to this. >> thank you, commissioner. you know, one of the things that it's true about the small minority that have opposed this project is that they are very resourceful and along the way finding different reasons to vote it no. i will give them that. but let me be very clear here. the resolution that this board passed was a resolution that called upon the program going forward if there is funding found at the mtc. it didn't specifically say where the source of funding--