both the risks of phase one, and face two construction of the transit center. to provide a rail-ready transit center to improve the ground floor design of the transit center by providing program space below grade where we could locate a number of utility and back of house programs freing up the ground level to more publicly, public programs and retail programs. and it also by funding the first phase of construction, allowed it more time for the land sale market in the bay area to recover, improving our financing picture in total for phase one. so, in may, 2010, the board adopted the revised base line budget incorporating the funding of 1589 billion.

the revised base line budget included cost estimates based on our 50 percent designed development documents from pelly clark pelly and estimates compared from their consultants as well as the web corp and the additional that we received through value engineering and it reflected the actual costs of constructing the temporary terminal and the bids that have been received on the demolition contract and some advancement of the design of both the bus ramps and utility relocation and the ac transit bus facility and they had elected to conduct their own facilitis which removed them from our program and our budget. >> we also the phase one budget reflected a new schedule for

construction, with demolition beginning in august of 2010. and completing of construction in october of 2017. at the time, we were still looking at relatively low escalation rates particularly in the very near term, 2010, 2011. and of course, there were additional advancements in the design that were reflected in the cost estimates and we had implemented the cmgc contracting strategy and so that included both the estimates based on a cmg c contracting approach but the establishment of a cmgc contingentcy that i will scribe later in the program. and it included a rear,al location of program wide costs from phase two to phase one, the initial time line for phase one was developed, there was an

expectation of a significant amount of overlap between phase one and phase two efforts, and at the time of the revised budget was adopted, it was clear that the phase two would not be in full swing until a later date and so there was a reallocation or a reaportionment of program wide costs that had an impact on phase one's budget. >> so that the revised base line budget as we adopted in may of 2010, included these categories. and increased the building construction budget to just over 900 million. and i mentioned the two major milestones of the start of the demolition, and the target of october 2017 for bus operations. since the adopt of the base

line budget, we have progressed the design through design development and the completion of the design development and moved into the construction document phase. and we have employed additional value engineering measures to help to contain and reduce costs of construction including switching the ceilings with in the transit center from a gfrc material to metal. a redesign of the face material at the bus deck and the edge of the park, again to reduce the costs through the use of lighter weight, lower cost terms instead of the gfrc that had been originally proposed. we simplified the storefront glazing, at the west end of the transit center in particular to provide, to switch from amulonless glad to amulon glass

allowing us to reduce the cost of what is a significant architectal element of the building in the area and volume. we also simplified along with the architect, the floor in the light column, to provide a glass floor at the base of the light column that will continue to allow the light from primary light column to extend into the rail levels and opening up the circulation in the grand hall and reducing the cost from the skylight seating type of feature that had been proposed at that location. in addition to the hard changes that we have made in the construction documents, and we have had the architect as they were required under their contract to incorporate a number of bid alternates, which will provide us with flexibility as we move forward to the award of the individual

trade packages to make the decisions if additional cost containment measures are needed. and these are just a sampling of the measures that are included. a lot of them have to do with the architectal features of the building and the finishes of the building while preserving the programattic needs of the center. in aggregate between the value engineering and the deductive alternates there is more than $100 million in cost reductions that we have been able to make to the construction estimates and that is above and beyond the $100,000 that i mentioned before that the program was able to save by constructing the transit center in a bottom up approach with the (inaudible) ramp. >> before you move on to the rva. >> i just want to check in and

see because there that was a lot of information, if the board members have any questions? >> director metcalf? >> i got it. >> dr. reiskin? >> i had a couple of questions. >> sure. >> one of them, so in 2010, we got $400 million to build the box, and we increased the budget by exactly that amount and it looks like... >> yes. >> and at the same time there were 100 million savings of ve and some shift of scope from phase two to phase one and there were energy efficiency additions to the scope. there was whatever came i guess from the architectal vision that was incorporated. so did everything else just wash out exactly and that is why the increase to the budget reflected just the $400 million of the grant? >> yeah, just the $400 million

of the grant application was developed in conjunction with looking at all of these other moving components of the estimate. >> so it is not just the cost of the box per se, then? the $400 million grant was looking at the cost of the box in terms of the hard cost and the design cost and the construction management and it extended our construction schedule by two and a half years, they were both the hard costs of the box as well as some time dependent costs and there were other adjustments within the budget categories based on the picture that we were looking at, at that time, but those were kind of done in parallel with the incorporation with that funding. >> so that may, 2010, revised budget of 1.589 incorporated all of that.

>> exactly. >> okay. >> and then the schedule, in may of 2010, also incorporated the change that you made adding the box changed the schedule and so that may, 2010 schedule incorporated that. >> yeah. >> because now it shows that excavation will be complete, july 2013 and we are a year behind that.

the engineering and the exact size of that butress had not been fully developed, and so what has happened is that the over all critical path for construction of the transit center runs through the butress construction and so, with the completion of the butress at this time, we will move into the completion of the start of the excavation phase. so that completion date for the over all excavation has been moved out. and you will see as i mentioned a little later, a revised schedule that we are currently managing where a number of those intermediate milestones were characterized as the completion of the elements of scope have been moved out. but by resequencing the over all work, and we are still maintaining the october, 2017

completion for construction. so, kind of in real quick terms, what is happening with the substructure construction is that is going to start at the far western end where steve described that we are installing the map slab now and moved from east to west and then as the structural steel work begins, that is going to begin at column line ten of the building which is roughly where shaw,alliliy is. as it moves from east to west, what is going to happen is the excavation in zone four will be completed as the concrete moves from east to west and as that comes up the steep will be moving from west to east and we will catch up and through that sequencing of construction, web corp has been able to maintain the over all schedule for completion of construction in

october of 2017. >> again, when in may of 2010, we were working with a tentative schedule. >> i understand. >> i guess that have we, has the board since approved a different schedule? >> no we are still on schedule. the critical component is that we are opening the station of bus administrations at the latter end of 2017. with the recommended adjustment we hold to opening up the station for the latter end of 2017. >> i understand that and just the right shifting of these steps gets us into a period

where construction costs were higher then they would have been planned or the current schedules. >> and i don't know, if the schedule was approved at the level of thels milestones, would the board need to change that approved schedule? or is that just not a board approved schedule? >> what the schedule was driven by the cooperative agreement between the state of california and the tjpa and san francisco that requires that we have the station opened for a certain time frame for the bus operations. the critical component is to have the bus operations in place. so that is what is driving the schedule. >> i believe that the budget item that was adopted by the board, did not include, the intermediate milestones, for the operations and the current milestones are based on the approved web corp schedule to meet that objective. >> i actually wanted to follow up on the direct's questions

and i apologize that i am repeating because it is harder to follow the technicalities. the first question that he had asked and it is great to actually see, because not all of us were here on the board during this time to see the history, so this is incredibly helpful to see how the budget has changed and also the value engineering work that has gone in to safe, $100,000. but the budget that has been shown is that we were able to maintain the $1.589 million budget. so the $100 million in value engineering savings that is just kind of met up with the increases that kept coming in. so we were always able to stay on budget, is that... >> yes. >> you are expressing? >> yes, that has been the process, working with the architect. it is really been a process working with the architect and with the web corp as the costs of construction have been

further developed and further refined. the methodologies and the logistics. you know, at the time you have seen in the construction updates, the access tresle that is running the length of the excavation site. at the time that we adopted the 1.589 million budget there was not a concept of how we would execute that construction access and the tressle is roughly a $40 million temporary work that needed to be worked into the budget. so it is those types of evolution through the design and constructbility process that we have had to adapt to and continue to maintain the program objectives and the over all program budget. >> and then, just in regards to the last question that director reiskin asked. in terms of the interum milestones, when a change in the interum milestones impacts the budget, is that something

that should come to the board? i understand over all that we will be on schedule in terms of for the larger public, what they care about is when the bus terminal opens or when the construction is completed and we are supposed to be on schedule for that. i think that the board would be interested in the interum milestones only as it impacts, for example, the budget costs. >> and we do have a budget policy that there are certain changes that are required to be brought to the board. the changes in schedule and in that impact in throughout the escalation and some of those costs, don't quite rise to that level. but it is something that we could incorporate into kind of regular updates to the board. >> yeah, and we do let the board know, i think that if there is a major interum that is going to effect the budget and we do let the board know and we keep you updated on where we are on that.

absolutely director. >> thank you, director ortiz? >> thank you. >> the single highest expenditure is program wide, what is program-wide? >> program-wide costs are a number of agency costs. it is tjpa staff our accounting costs our legal conducting costs, the program management team, urs. all of those costs of managing and delivering the program are included underneath the program wide budget. >> and did that go through value engineering. >> sorry? >> did that section go through value engineering? >> we have continually looked

at opportunities for containing, particularly our program management consultant and our other consultant costs. and a lot of that is authorized through the annual budget, but in the process of setting out the work plan for each year, we have gone through a review of the staffing requirements to insure that we are trying to be as lean as possible in delivering the program. >> okay, thank you. >> okay, seeing no further questions. we can move on, but i do really appreciate the previous history, historical budget presentation. thank you. >> so, when we were in the scheme mattic design phase we went through a risk and vunerbility assessment which was an effort to identify

potential hazards, whether they are natural or man-made that the transit center would be exposed to. and to incorporate into the design of the transit center features, that would help insure the safety of people using the transit center as well as minimized on the impacts on the transit center itself of seismic and other events. it has been part of the design of the transit center since its inception for us to be operational after an earthquake with only minimal need to address cosmetic issues and be able to... to be up in operation following a seismic event. that type of issue has been in the design since the inception. as we moved into the construction document phase in 2011, it was appropriate for us to do an update of the risk and

vunerbility assessment to incorporate both new information outside external to the project, on what the types of risks that the transit center might be exposed to, as well as to incorporate new information based on the advancement of the transit center design from the schemematic level to a more fully detailed design. in doing so, we worked with the urs security branch of the urs. this is a branch of urs separate from our program management team. but brought in their experts a matter of experts to help us to conduct a top to bottom review of the transit center again and we also brought in a consultant to assist the tjpa in scoping and managing that process.

the head of that team, is bob dusabela who is founding partner of dbs security, and brings over 40 years of professional experience in the design of safe facilities to our project. he has a depth of contemporary expertise and percent. and he is the security consultant of record for the world trade center and the new path station in new york as well as consulting with amtrak and new york mta on the numerous other projects in new york including the station, and 34th station and union station in dc. so i would like to invite bob to come up and present to you our experience going through and our update of our update and risk vunerbility assessment

and what the conclusions of that rba were. >> chair woman kim, it is an honor to be here members of the board. i would like to just give some background, unfortunately we have been building great buildings in the united states for years but the paradigm for creating a safe and secure facility has changed dramatically over the past 20. it used to be that the aggressor or the criminal had some value in their own life. they have given that up. and we have a new kind of criminal paradigm where the individual perpetrating the crime cares no more about their own life than those that they are attempting to change the life of. that has changed the conventional design and construction and facility

operations. and in a nutshell these terrorist threats have over turned the protective design paradigm, how we go to create safe and secure facilities. what that is really meant is that there are a series of what we consider now to be industry standard best practices, the things that do to create safe places, the subject matters and urs was to do exactly that. obviously we are interested in limiting liability. that is a certain of any board of directors, it is a concern of anyone who is in the design profession. but we also wanted to make sure that we have a safe and secure facility. you will see in the bottom, the term that the safe act designation and we are going to talk about that a little bit and i will tell you what that means.. why do i mention the

safety act? >> at the end of the day, there is no facility that can be built with that risk. every facility has some degree of risk. and so we make investments in the facility against the industry standards of practice, best care, intelligence gathered but at the end of the day the legislation is created to minimize for great places liability to people who develop them, design them, build them, and operate them. it was proposed as part of the homeland security act of 2002, its real purpose is to eliminate the exposure that a client would have in the event of an event. it was developed by the department of homeland security and has a federal back bone and it is typically used to foster new anti-terrorism technology and someone has designed something that they think will preclude a terrorist from being successful, it is in the

building for the facilities like the transit center to have the opportunity to be designated and certified as a safety act facility. we are on the bleeding edge, no. we are on the leading edge, yes. the executive director charged the design team and the consultant team to follow best practice and to make sure that this facility was designed in a way that was similar to other significant assets. these are a list of other entitis that have gone about filing for safety acts, we are not the first. but you are certainly on a list with the major players. this was a little bit more information. if you want to obtain safety act designation, there are a bunch of things that you have to do. this is a listing of the enhancements in safety and security that are expected when you are reviewed for safety act

designation and certification. i will go through these in more detail. these are the investment areas that the design team was asked to incorporate in the project as a result of the risk and vulnerable assessment that bob beck mentioned. it was developed by the urs team. and then, subsequently turned over to the pelly clark pelly team and so i will go down this list of individual items as part of the presentation, i simply want to have them here so that you have an understanding that part of the rationale for doing this was to obtain that safety act designation. these are really some of the legal implications that are there so that as you can move forward, and legal counsel can advise you in more detail. but at the end of the day the intent is to put those who have the responsibility for developing the project, funding

the project, designing the project, building the project, and operating the project, in a position of less risk. claims can be filed in a federal court. there is a cap on the extent of the file that can be filed. punitive damages are barred and there are certain terms and conditions regarding the plaintiff's opportunity for recover. i mention this because after the 93 bombing at the world trade center, the port authority of new york was ten years later in the supreme court in new york. through a trial by jury, put in a position of being held accountable for a large percentage of what was then determined to be over a billion dollar claim. so there was a significant interest in the port authority's subsequent to those proceedings and the other agency and entities that i

mentioned in the previous slide safety act approval, it was in the hundreds of millions of dollars. so why this project and what is the history? >> there are literally hundreds of events but i have gone back as a member of the design community, or i have access to information from the federal government through law enforcement and through open source and closed source data, events that have happened. we all know about the 93 bombing at the trade center. but if you look down this list, you will begin to see, in the years 2004, or 5, 6, 8, 10 and 11, that the transit entities in the world have become more significant targets.

>> we have concerned and larger events and at the end of the day we will have people in the park and people shopping in stores and tourists coming to the building and many of features have something other than a event, this is an all-hazard event management strategy. you are probably going to be one of the most if not the most significant transit in the united states, east of or excuse me, west of the mississippi, what does that