>> good afternoon now. welcome back to the san francisco budget and finance committee meeting for july 24, 2013. we left off having gotten through item number 14 and mr. clerk can you call item number three now. >> item number three resolution approving a historic property for buchanan street and authorizing the planning director to execute the historic property contract. >> okay. thank you very much. i think we will call up the legislative aide to supervisor breed. >> thank you. this is the property at buchanan street. it's a beautiful home and

landmarked for over 40 years. the mills act is a property tax discount that will make it financially feasible to maintain the treasure down the street from us today. supervisor breed supports it and i think andy draw from supervisor wiener's office is going to speak as well. >> thank you. i am from supervisor wiener's office. on behalf of the supervisor i would like to thank supervisor breed for this resolution and the support of the house at buchanan street. the city places a significant burden on historic buildings and costs and time and other administrative obstacles. the supervisor sponsored legislation last year that simplifies the process. the fact that san francisco has five mills acts contracts in existence and los angeles has

hundreds is a testament to the challenging process and to simplify the mills act process was passed unanimously by this board. the supervisor believes that mills act contracts are one way of helping homeowners with the most significantly -- the most historic significant and so with that light the supervisor would like to have the committee's support and with that i turn it over to the planning department. >> sounds good. >> good afternoon supervisors. susan parks planning department staff. the item before you is a mills act historic property contract for buchanan street historically known as the nightingale house and legislation enacted by the state of california and admitted into

the san francisco administrative code and lets cities to go with this program and lets property owners to reduce the property taxes and reinvest the savings back into the rehabilitation and maintenance of the property. in san francisco the mills act has been in the past been used infrequently compared to other cities across the state. for example san francisco currently has five mills acts contracts and los angeles recently signed the 600th and this board passed legislation which was authorized by supervisor wiener. these revisions have made the application process quicker, cheaper and more predictable. additional applications are expected this year and the nightingale house is the type of scopes of work you can expect to go forward. this house was designated under article 10 of the planning code and august

28, 1972. the property is located on the west side and it's by one of the primary builders in the neighborhood. mr. nightingale was a real estate developer and a 49er's and san francisco alderman and the owners submitted their application and the planning department placed the application on hold due to changes and now that has passed we are bringing this forward and repairs to the roof and foundation improvement and it is restoration of missing features. a complete copy of the rehabilitation and maintenance plans are included in the

packet. despite the lengthy process the owners have been ideal and working with the planning department to meticulously restore the upon property. the planning department recommends approval of this contract in conformance with the unanimous recommendation of approval this year. the application rehabilitation and maintenance program is consistent with the requirements of the mills act. i am available to answer any questions about the application and the program and a representative from the assessor's office can answer questions about the reevaluation. >> okay. >> good afternoon supervisors. trisha on behalf of the assessor's record's office. i would like to thank you for the opportunity to address you today. i am here with my

colleague who can address specific questions. before i turn it over to mike i want to acknowledge the hard work of mr. stein and mr. peeps and for their understanding and commitment to historic preservation i want to acknowledge the need of supervisor breed and wiener and the fine work of the budget analyst so thank you very much. we do have revised financial impact for your consideration today. as you might be aware our office is preparing the estimated application for this so you can understand the financial impact before taking action. our city realized there was an error made on our part on the calculation. the bottom line that the mills act value should be closer to 1.1 million

instead of $1 million and impact to the city of $6,000 versus $7,000. i did note that we consulted with the city attorney and noted this lower estimate is not substantive and would not require a continuance and now i would like to turn it over to michael who will address the general mills act process and for the corrected estimate rational. >> thank you trisha and good afternoon chair farrell and supervisors. i am here to speak on the general process the assessor's office goes through evaluating a mills act property. i can speak on the specific evaluation for buchanan street. for all of properties we are to do this and what is the facta [inaudible] value and the original purchase

price and the inflation factor added each year and then a market value of the property. by looking at sales in the area we look at what could the property sell for at that time and this is a mills act value and proscribed by state law. the code says the rate that we should be using the risk rate we should be using depending on the property type so before you have two sheets, a summary page and a detailed evaluation page. i would like to walk you through the detailed evaluation page and point out where the change was made. we began estimating what the market rent would be for the buchanan street. from that market rent we subtracted and allowable vacancy and

collection loss. we subtracted some operating expenses that should be allowed for the property to approve at the net income. the change was made in the risk factor. for over occupied buildings it's 4%. for all other property types the risk factor is 2%. our initial evaluation used 4% for the entire property. we were -- that's incorrect because part of the property is owner occupied so we applied the 4% risk rate to the owner occupied portion of the rate and 2% for the non owner occupied portion of the property. this resulted in evaluation being adjusted to .29 95. and the second handout is the revised summary page.

the three prong test as you can see and the current assessed value is listed here and result in taxes of approximately $19,000. based upon the three prong test the lower of the values, the restricted value, which is 1.1 million, and the factory facta value and $2 million and the value should be as listed here and results in tax savings of approximately $6,000 and i am here to answer any questions you may have. >> thank you. colleagues do we have any questions? thank you very much. mr. rose can we go to the budget analyst report please. >> yes mr. chairman and members of the committee, on page 20 of the report and i'm going to use the revised numbers which were just stated. >> thank you. >> and table two and page 20 of

our report the first annual property tax is paid to the city by the property owners would be 5991 would be the specific amount or 33% less than the $19,000 which the department referenced. that amount stays the same. that's the estimated property taxes which are otherwise paid to the city so if the proposed property agreement is not authorized that would be -- they would not receive that reduction. if the -- the total amount over the 10 year period and as the supervisors know the mills act is a 10 year agreement. at the end of 10 years it will automatically renew unless either the board of supervisors or the property

owners requests that it be not continued, so over the first initial 10 years if you use the number of 5991 which is the reduction in the first year the total estimated reduction would be at least 59,000 and 10 times that amount and that would be adjusted over the 10 year period. now, we also point out that the total estimated cost to the property owner of rehabilitating and maintaining buchanan street over the initial 10 year period over this act which is 667,000. our recommendation on page 21 corrects the numbers regarding the rehabilitation, so that our recommendation specifically is to amend the proposed mills act historical property agreement to reflect that the actual costs have been occurred for work

included in the rehabilitation program with a total of 636949, an estimated expenditures expected upon completion instead of the estimated included and that you approve the amendment. i am happy to respond to any questions. >> okay. thank you mr. rose. colleagues any questions? why don't we move to public comment on item three. i do have a few cards and if anyone else wants to speak please come forward. [calling speaker names] and if there is anyone else please line up on the far wall and the first speaker can get going. >> good morning supervisors. thank you for hearing this today. the house has been a labor of love for us and we are heartened to see the assessor's office, the planning

department, supervisor wiener's office, supervisor breed's office coming together to protect this treasure for san francisco. we are thrilled to be a part of it and to live there and looking forward to restoring this place. this is my husband porschea peopleels and wanted to acknowledge alex and he's a contractor and doing a lot to help with this project and we are happy to take any questions. >> colleagues, any questions? okay. thank you. >> thank you. >> thank you for being here. okay. anybody else wish to publicly comment on item three? seeing none public comment is closed. colleagues we have recommendations from the budget analyst. >> so move the recommendation. >> okay. we will take those amendments without opposition and i want to thank the colleagues and staff for being here. thank you for your participation and can we take

that without opposition? so moved. mr. clerk can we move forward now to item 15. >> item 15 resolution to authorize the risk management division of the city administrator and brokerage agreement with alliant insurance services for not to exceed value of $22 million. >> okay. we have matt hansen here. >> good afternoon supervisor. i here today for this agreement to go with another provider and approved under qualifications previously done. this provider of insurance brokerage service is alliant insurance services and they provide the broke arage for the cities programs. this has been

reviewed by the budget analyst's office and suggested amendments which are finding accepting and appreciate the work of the budget analyst's office and i will take any questions you may have. colleagues, any questions? okay. seeing none. thank you very much. we will go to the budget analyst report mr. rose please. >> on the bottom of page 51 we report that the total estimated expenditures for insurance prumiums under the agreement in 14-15 are listed on the report page 52 and on page 53 of our report we point out that given that the risk management division cannot fully anticipate all future insurance needs we believe that there should continue to be a constituency

and we have estimated that at $500,000 a year or a million dollars a year so that the total estimated cost of the insurance is shown as page 54 in table four would be 19 million. our recommendations on the bottom of page 54 we recommend that you do the resolution for approval and provide for additional two year options and the agreement through 2019. amend the proposed resolution to reduce the contract by one month and terminate on june 2015 instead of the other date and the resolution not to exceed amount listed from 22 million to 19.

5 million which includes the $1 million constituency and we recommend that you approve this resolution as recommended. >> thank you mr. rose. colleagues any questions for mr. rose. thank you very much. we will open it up for public comment? seeing none public comment is closed. okay colleagues we have a -- >> motion to accept the budget analyst's recommendations. >> okay. we can do so without opposition and the underlying item as amended. we can accept that also without opposition. mr. clerk can you call item 16 and 17 together. >> item 16 appropriating the amount listed for refunding certificate of participation. number 17 resolution for refunding certificate of participation and capital projects in one or more series in the aggregate amount not to

exceed amount listed. >> thank you. we have someone here to speak on these items. >> good morning. nadia [inaudible]. we're here before you today to ask for authorization to ask one or more series of refunding certificates to pay down four of the certificate of participation that are outstanding and before you. those include 2001 series [inaudible] 2003 serious for the house improvement and 2004 series for the juvenile hall as well as 2007 series of acquisition of van ness property. we are approving a threshold of savings of 3%, so we ask that you give us the authority to do the series and some of them identified here (inaudible) potentially refunded

as soon as the board approves it. the 2007 series is not in callable right now but will be next year but this authority allows the flexibility for the office of public finance to access the market and take advantage of the low interest rate environment. of the three transactions we believe that are in the money there is a possibility that the city could issue two of the three and knowing it's the third transaction and the van ness building could be delayed to policy considerations. with that you're also approving a document that is updated to reflect the recent documents including the five year financial plan as well as the proposed budget, but it would be need to be updated to reflect the recently adopted budget for the 2013-14 and 14-15 year. with that i'm -- we have supervisor -- director of real estate here who can also talk

about the valuation if someone is interested. >> thank you. colleagues, any questions? okay. thank you very much mr. rose. can we go to the reports for items 16 and 17. >> yes mr. chairman and members of the committee on page 60 it's anticipated that the amount in the refunding subject subject would have interest rate of 3.8 8% and total debt service of 113.6 million and total estimated interest costs of 30.5 million and estimated principal listed here. on page 61 of our report we point out that it's estimated that the city's refunding cop's result in savings to the city of 4.3 million dollars and over the

term of the refunding cop's to be issued and obviously that comes from the reduced interest rates by refunding the existing cop's. our recommendations on page 62 of the report. we recommend that you amend the resolution to have the office report to the board of supervisors on all planned issuances of 2013 refunding cop's above the currently planned 83 million number in the cop's. once details are known and we recommend that you approve the legislation as amended. >> thank you mr. rose. colleagues, any questions for mr. rose? okay. seeing none we will open it up february public comment on. >> >> for public comment on 16 and 17? seeing none public comment is closed. >> i will move the recommendations.

>> we will do that without opposition and the underlying items both amended and do without opposition? so moved. okay pl. clerk can you call item 18. >> item 18 resolution between the city through the treasure island authority and the san francisco transportation authority yerba buena island ramps for a total of $81,700,000. >> thank you. mr. beck. >> thank you supervisor farrell, members of the committee. we have before you two memorandum of agreements between the transportation authority and tida and the city and county of san francisco for services to reconstruct the westbound on rampos the east side of yerba buena island. the first is for right-of-way services to accept from transfer from the navy through us through tida the

property which the rachs are constructed and after that transfer the properties to caltrans. the second is for the construction much the ramps itself and i have a powerpoint and we have the transportation authority also here. i would point out that the transportation authority board yesterday did approve these moa's on behalf of the transportation authority.

[inaudible] between tida and transportation authority and the ramps project we're going to construct and i will take any questions you may have. tida and mta entered into a agreement and there is a increase in the local match of 750,000 to increase preliminary engineering and also that the -- in october of 2011 we executed moa with the transportation thfert to act as the mobility management agency for treasure island as well. under these proposed moa's as i mentioned we will provide services for the ramp projects as well as the construction and construction management of the ramp

construction. you see here the existing ramps on the west side -- the east side of the island. the off ramp is on the east side or the left side of the structure, and the on ramp has a very short acceleration distance has it enters the bridge. the new ramps will provide -- will both be on the right-hand side of the freeway and will have longer deceleration and acceleration zones. the estimated cost of construction is seven 7.5 million dollars and primary funded by highway bridge programs and state prop 1b. the local match portion of this project is to be reimbursed by the treasure island community development. in march the transportation motor .

>> >> authority completed the project and the right-of-way certification and selected a traffic management consultant. we are expecting at the end of this month the e76 or the federal highway authorization of approving the funding to move into construction, and with that we would award the transportation authority the construction management contract. with the board approval we will execute the moa's award the construction management and the contracts and award it november of this fall and beginning construction in january of next year. i can take any questions you may have. >> colleagues, any questions?