talk about in a bit, spectators are obviously a driver of economic and tax benefits as well. [speaker not understood] from my office is handing out a slide presentation now. i apologize for not having copies sooner. so, as you see at the bottom, it's $4 million here. i want to go to a summary slide now. here's a total budget adding together the three slides you just saw of $22.5 million. i don't have anything to add to that. basically the sum. you'll see cash escrow is zeroed out between the funding to begin with and the credit back of those funds go back to the city. so, this last slide is the break even funding analysis that i talked about earlier. again, it's by no means meant to recast the agreement, but i wanted to give a clearer picture, especially with recent reports and committee outlets about a $20 million hit to the general fund.

i think -- i take it very seriously, the idea that the general fund funds a lot of services for people in the city and certainly a special event like this one should ben if youth the general fund and not create shortfalls elsewhere. ~ benefit projected at the top $22.5 million less the 6.8 million of acoc projected to date. tax revenue we'll talk about further in the next segment of this presentation. so, when you basically take that math equation, there is a remaining shortfall of $2.6 million, that's not to say that's all we need to fund raise. i want to be clear about that. i think we are clear from the acoc they are continuing to go out and seek further pledges to continue to endeavor towards the 32 million. what i'm pointing out here is we want to be very clear with everyone, donors as well as people in the city hall here about what those benefits were to the city and this projection

is not meant to make the case that $13 million is bankable, but instead to show how we would calculate what that benefit is going forward. and we intend to do additional visitor counts and surveys to try to give everyone from the controller's office to the board of supervisors to the budget analyst's office of what was delivered. that is a theme we've heard throughout the hearings today is we are delivering on the promises and letting people know what actually happened. i'd like that to be the frame of the impact answer and happy to answer questions. >> i appreciate that. there was maybe some concern expressed through public comment and about the paper as well all we had to do was raise about i think it was $3 million more and we'd be okay. you'd be able to recycle the revenue from the event back into this fund-raising effort and i'm not sure that was the intent. >> i don't think it was the intent to say, let's stop there. i mean, that's never been something that i as a city employee am willing to do. the event -- excuse me.

the host agreement set up a clear division of labor and i think our job has really been to support the fund-raisers, but to manage our budget appropriately. so, i was reacting to the idea that the full 20 million was going to be a hit to the general fund. when i think two factors are at play. one being the event hasn't happened yet and we had three months to sort of capitalize on the growing awareness and excitement about the event to hopefully augment those fund-raising revenues. and, so, i can say as clearly as i can now we're not stopping -- i do not want to see anyone stop because of what was in the paper to today. i want to see it continue and provides those benefits back to the general fund. >> thank you. i appreciate that. we can go on to the economic impact report. >> actually, supervisor avalos, can i ask mr. martin on the cash collateral escrow expense of 2.4 million, is there a possibility that it might be higher than that, the need for that line item? i'm just curious how you came to the 2.4 million on that one. >> so, that number, 2.4 million

is a sum certain in the agreement. so, basically that was negotiated with the event authority and that's part of what we brought back to this, to the board of supervisors in september or excuse me, october after we realized that the original security arrangements wouldn't work. so, that money is basically a backstop so that if we need to dee voight additional resources, that that money is there. now, ultimately, i think our intent is if we need to put more couldxtionv on the street or more buses on the street, we would just do that and that would be part of our variable adaptive budget. so, as i mentionedth earlier, the 22 million is dependent on how many spectator comes, what actually transpires. i don't see that 2.4 million changing. i see withdrawals coming out of that based on obligations the city has under the approved host venue agreement and the lease position agreement. what i tried to make the case for was my anticipation, we wouldn't get to the security arrangement, we would do what we were supposed to do under the agreement. >> and from what the chronicle reported this morning, the

spectators over a three-month period this year, instead of 2.7 million which was originally predicted is about 2 million people. i think a lot of our mta and the port projections are based on the adjusted numbers and that's what the bay area council is basing these on? >> the adjusted numbers, you mean the 2 million? >> correct. >> so, i will say there have been several i think the spectator projections over time. there was the ones for the economic studies. we actually did an even larger spectator count for the environmental impact report so we could be appropriately conservative from an environmental point of view so we had a super peak kind of event. we would know what kinds of mitigations we need to put in place to make sure the event came in place as we want it had to. this number is lower than both of those numbers. we think it's appropriate based on some sampling we did in local -- in locations along the waterfront as well as the event authority's analysis of the carrying capacity of its venues. but obviously like i said i recallier, we're going to want

to truth test this during the event to really understand how many people came and what kind of -- frankly help feed into our incident command system to allow us to adapt to changing conditions. >> i think that's the conclusion of this piece. should we move on to the economic impact study? >> just before you go on, we do have 1.5 million, mr. martin, left over in reimbursement after having been provided; is that correct? >> that's correct, supervisor. there's 1.5 -- of the 8.37 million that has been invoiced there is 1.5 outstanding. >> do we know when we're getting that in hand? in hand cash to be able to provide or not? i think ms. mcclellan is coming

now to answer that question. >> we are receiving 1.1 in pledges between now and january 2014. i can tell you right now i know in may we're getting another 700,000. there are two pledges that are coming in. at this moment in time i'll make another payment in may. when those come in we'll actively fund raise adding the 150 we made last week. as we get more tranches we'll make -- >> that's january will be paid -- >> before june 30th. before the end of the fiscal year. >> good afternoon, gentlemen. it's a pleasure to be here to talk to you about the updated numbers of the impact analysis. [speaker not understood]. what i've done recently is to

update that report by way of including our understanding of the america's cup world that we have now that we didn't have back in 2010. is the presentation going to come up? so, back in 2010, most of what we had to go off of was the experience of prior america's cup events. since then the number of syndicates that are going to be involved has become much clearer, likely crowd sizes, perhaps clearer. the amount of spending by various organizations also clearer. so, this first slide provides an indication of some of the changes and assumptionses that we've made. the important one is a change in number of syndicates from 15 down to 4. we've changed the number of the amount of spending by the cup management from about 196 million down to 150 million. most of it reflecting the fact that there are fewer syndicates. those who are directly involved

with the event authority may have different numbers, but the best information that we have available -- >> did you have anything based on the experience we had of last year? >> with the world series events? no, we purposely did not use the world series events. there are a couple different ways of going in terms of forecasting the experience that we might have this summer. it was my considered judgment that probably still using the information from prior america's cup events is more relevant than using the information from the world series events. given that they are fundamentally events, especially in the sailing community, having attended an event in san diego as well as the event in san francisco, having been a 30-year follower of the america's cup, i believe that this event will be fundamentally different, fundamentally larger in scale than what we experienced during the world series. >> so, essentially you've done like a percentage reduction overall in what we expect the

event is going to be? >> well, not a percentage reduction. we've looked at the individual categories. one of the assumptions we had previously was there would be 40 [speaker not understood] yachts arriving in san francisco bay. that number was changed down to 10. we adjusted our spending, our assumptions about spending accordingly. our assumptions about spending are specific to the various categories. i'll show you what those assumptions are. so, this slide provide you with a list of different categories we included. there are others down there that include a couple of catchall categories. it shows you the change in spending for management, change in spending from syndicates given the vastly smaller number, the change in spending on infrastructure which in fact is larger than we assumed at the time. but overall we got a reduction in spending of about $265 million or about a third of what we were assuming

previously in 2010. so, it's expenditures of about 469 million versus 200 -- sorry, 791 million back in 2010. >> local visitors, that's 150, what was that number? you have millions and dollars here on the first category. when it comes to visitors you're talking about what visitors are going to spend? >> exactly right. >> and nonvisitors, okay, very good. >> the visitor numbers are based on a reduction in numbers from 2.7 million down to 2 million. 2 million is approximately equivalent to two fleet weeks spread over the course of the three-month event. >> quick question for you. can you help me understand this chart, the total columns, 791 minus 4 68 is larger than 264.

>> then you're correct. i don't have a good answer for you. >> okay. >> [speaker not understood]. big difference. >> thank you for the correction. >> it's my calculator. >> appreciate it. so, those numbers and presumably the correct numbers will have the same input/output model we put our expenditures into in 2010. so, methodology is exactly the same and the difference in numbers is due to the difference in numbers in expenditures. >> is there anyone who has looked at this kind of a peer review or anything on this report? it is more of an advocacy drill

than reality? >> we've tried very hard to be conservative and not make it an advocacy tool. our institute has a long history in reputation of being unbiased [speaker not understood]. this was shared with the city's chief economist ted eagan. he and i had a conversation about it on monday. i won't tell you we agreed on everything in it, but no two economists are likely to agree. >> i saw his notes there is not a lot of agreement on key features of it. i can go into that. >> i'd be happy to discuss it. in the results, i think you have the slide -- in the results, we found there's about one-third reduction in both the output generated by the event, decline from about 1.4 billion down to 90 2 million. a decline in the amount of employment that result in 8800 to 6,4 81. about a quarter decline in employment. that's because a large part of

the spending is sort of labor intensive remains intact. >> so, i do recall with the report that came out in 2010 there was a measurable bump in employment, but it was actually a lot of it was older time hours, a lot of it was extra hours. not every new hire. that was one of the key [speaker not understood] that came out. i confirmed it with the budget analyst as well. >> that may be true. that wasn't part of our report. although it may be in fact what happened. the jobs that we reported here are full-time equivalents. it's really a number of hours of increased employment that we're all submitting, not an increase in the number of people per se that were going to be employed. >> thank you. >> and just to understand, so, right now what we're seeing is there is going to be -- this word economic activity gets thrown around quite a bit. you're projecting 90 2 million of economic [speaker not understood] to the city. >> correct. and we can take those results

and run them through some basic formulas and provide our estimate for increased city tax revenue. so i submit, mr. martin has declined them to about 13 million. that's significant reductions in the transient occupancy tax, significant reduction in payroll tax. and those reductions are larger than the one-third reduction to overall expenditures partly derivative in large part by the number of sipped katz. greater numbers of syndicates leads to disproportionate increases in the transient occupancy tax as well as payroll taxes paid. ~ the retail taxes have also declined, but back out a third, same as decline in overall expenditures. we have a net decline of about $10 million projected in city revenues. >> so, just -- mr. eagan talked

about a 6.1 increase, million dollar increase in hotel tax revenue. it would require a 7% increase in hotel tax over a three-month period. what is your response to that, which is a significant increase over a three-month period. do we expect during this time that's what we'll have for the america's cup event? >> my expectation for rev par is that it would see a significant bump. having in addition between 5 and 25,000 people in the city on a given day could lead to a vastly significant bump than we saw during the world series. i believe that ted reported an increase of about 3.6% during the world series events. it would be my expectation that the america's cup will leave the town and the defense would incur substantially larger increase he in rev par over the course of the event. >> [speaker not understood] five days of the event last

year drew 150,000 people total. >> okay. >> that does president seem like the same as what you just said. >> no, the numbers that i was quoting are expectations for the america's cup. the number that you i believe just mentioned was for the world series. again, 2 million may be a highest matt and i don't -- given the work that i've done, i don't believe that to be the case. i don't believe that the world series -- there are probably others in the room better able to speak to this than i am. i don't believe the world series and louie vuitton cup and [speaker not understood]. the world series may at some point become a major event but it's a relatively new innovation. as such it's probably not attracting the kinds of crowds from across the states, the nation or the world that the america's cup is likely to.

>> thank you. according to mr. eagan, we're getting e-mail from him or through him, that there wasn't any real impact to the hotel tax last year for the world series cup, which might [speaker not understood] what you're saying right now. >> half of the world series events occurred during fleet week. so, measuring the impact of that literally impossible. unlikely to be meare an accurate predictor for what we'll experience for the america's cup, these numbers are high. i don't have an estimate how high, but significantly higher than reality -- >> thank you. >> through the chair, i just wanted to say there is the harvey blue grass going on that october time as well and a number of other events. it wasn't just fleet week. but i just had a question. i know from the 2010 report that you did, i think it was an

extremely rosy picture with the number of syndicates 15 and the 40 super yachts proposed. and i'm just wondering how you came to those numbers. and i know you said you've adjusted now down significantly to like a quarter of those numbers and the financial numbers, too. but did you look at san diego's america's cup and base it on some projections on how san francisco would be a little bit different? i'm just wondering how you came to that seemingly rosy picture that you gave us in 2010. >> well, i would submit that in 2010 it wasn't seemingly rosy. much of the community that looked at this report, that report agreed with us that they thought we were being relatively conservative. the numbers in terms of syndicates and the other assumptions, the only thing that we had to if by was previous history. san diego played a role in that, valencia played a role in that.

new zealand and other america's cup events played a role helping us accommodate to the number of syndicates we might expect. at the time we really had no idea what the global economic situation was going to be. we had no idea some maybe, but less of an idea what type of boat was going to be used and [speaker not understood] syndicates. there was a lot we didn't know in 2010 that we do know now. and now in this report we've incorporated the best information that's available to us in terms of updating that economic impact. >> i think it's important to note, though, again, having been somewhat close to the developments here, there have been additional events added. >> correct. >> for instance, the red bowl heath races, things like that. you can look at go from 15 boats to 4, that's a dramatic decline in challenges. that doesn't at all complete the whole picture of [speaker not understood]. >> that's right.

red bowl, jr. events we completely ignored that, the concert series we completely ignored that. that's not included in our estimates. that would be an add-on to the estimates here. >> is that right? >> yes. >> okay. >> all we've done is take what we knew in 2010 or what we thought we knew in 2010, correct it which in large measure meant reducing numbers. we did not add in the benefits of the world series events because figuring that out would be very difficult. and we did not add in the red bull, jr. challenge because again we have no history on which to base an estimate. the concert series is still relatively undefined. and figuring out the numbers of people that are going to attend the concerts from san francisco from the east bay, from outside of the region, very complicated sketchy at best. so, we decided best not to include those things in our revised estimates. >> could you explain a little bit more about the concert series you're talking about and

the red bull event, the youth event sponsored by red bull? >> sure, i'm probably not the best one to speak about those events. if somebody else would like to speak to those, that would be terrific. >> either mr. martin or mr. barkley can talk conceptually about what is going on. >> an important consideration for us was that we talked about having 55 days of racing through the summer of -- here in san francisco and that's what we wanted to deliver. so, i'm pleased to say that we still have roughly 55 days of racing through the summer. but to achieve it, we've filled a void with some specialist events. one of them is the red bull youth america's cup, an event called the imagination of the world. there will be 10 plus countries represented with youth teams. we just had some trials here the last four or five spots in february.

and the uptake from the media around the world is in actual fact a surprise in terms of how much visibility this is getting for [speaker not understood]. another event that we've added to the schedule is what we call the [speaker not understood] which is where very, very large sailing yachts will be sailing on the harbor. in the bay here, i should say, on the days between the america's cup races when they would take place in the seventh of september. so, in summary, fill a void with a bunch of other events that will in their own right attract people here to san francisco and the media of the world to san francisco. >> thanks, mr. barkley. >> yeah. perhaps [speaker not understood] included and not included. so, aspects of the analysis

that could affect it negatively or positively, thing that could increase the estimates of tax for the city, we revise the potential increases is again sketchy. that could lead to an increase of a million dollars in city revenues, the concert series. the 2012 world series revenues, we have been unable to calculate sufficient data on those events to really make any estimates. as well as some accelerated infrastructure investments. these shouldn't be included in economic analysis, but if they happened sooner rather than later, that's a benefit. things that could decrease the estimates, mr. barkley spoke about the hundreds of millions of dollars that is being spent by management. it's unclear to me exactly how much might be spent by management spending. ~ teen spending. america's cup is substantially different from prior americas cups.

-- america's cupses. [speaker not understood] is a significant wild card. so, this is the update to the economic analysis i have. >> thank you. thank you very much. really appreciate your report. so, colleagues, i just wanted to make sure we had these two discussions. i know they were very long, so, i appreciate your patience. i want to appreciate the organizing committee folks for being here as well as mr. barkley, presentations from our departments, mike martin from economic workforce development. donna levitt from [speaker not understood]. [speaker not understood] from office of contract compliance and the controller. the status report is really to make sure we are living up to our commitments as a city around applying the standards for workforce development small business inclusion. it seems like as a city we need to actually strengthen our effort to do communication

about the agreements that we're making. i want to thank mr. barkley for his presentation and the numbers are correct in terms of workforce and small business inclusion. it seems like the event is having that impact. there are a number of people who spoke at the podium today from the public were able to express how their businesses have been impacted, improved, and a lot of employment occurring because of the america's cup event and that's really great to hear. it seems like on the workforce side that there's still a lot of bank work to do to make sure we are getting the maximum benefit. people feel they're actually getting access to jobs and moving forward. i know this is a place where we can actually apply this information to make sure where it's succeeding moving forward in the future. i want to make sure we take advantage of that with the city to make sure l [speaker not understood] the office of economic workforce development is working hard to apply these

ideas and principles. examine overall i want to make sure we have a successful event and all of us do. we want to make sure we're putting our best foot forward to the city. so, i want to thank everyone for applying their efforts to this end and thank you for this time to check in on the hearing. i would like to continue both of these items to the call of the chair. >> sure. if i could first just a few concluding thoughts. thanks to supervisor avalos for calling these hearings. i think for me in particular around the prevailing wage and the local hire, i think it was informative. i think there is good news within there and i think there is stuff to be worked on. but i think we want to focus on the future as a city. but i also want to take a step back. and i think a lot of the media recently has been focused on some negative aspects here, some really good aspects of the cup. personally, i still firmly believe in the america's cup is going to be a great event for our city here in san francisco. i was not here when the board approved this deal, if you will, so i have a different

kind of history and time frame. but as i look and kind of summarize all of this financial data and we have a lot of it today, the bottom line here is that we're going to have an event that is in all likelihood going to cost zero dollars to our general fund. we have an event that is going to create over $900 million of local economic activity and translates into approximately 6500 jobs, new jobs. a lot of cities would pay a lot of money to see that happen. and we're going to in all likelihood have zero costs it coming from our general fund. it is obviously accelerated a lot of projects along the waterfront that would have been done otherwise. and i think also the one thing that's so tough to quantify is a sense of civic pride that an event like the america's cup does for a city. last summer, i can't tell you how many people friends of mine, family members of mine that saw the cloudless day of sale on the bay in san

francisco with these colorful boats. i'm not a sailor, but i thought it was a spectacular event to watch. and seeing our city on national tv i think is nothing but a great thing and it's such a great light. even if we depth -- ~ didn't get another america's cup here, it will be talked about. i think our city will shine this summer. i think we're lucky to have it here. i know there have been ups and downs. there have been projections of teams of spectators of revenue. if we think about where we are going as a city in the summer, no cost to our general fund in all likelihood, $900 million of economic activity, over 6500 new jobs, and the chance to showcase our city on the national, international spotlight. i think this is a great thing. and i would just suggest