ahead of new york you have ports like south hamptin. that's $4 or $5 that they charge for services they provide that we don't provide on this side. you can compare the most expensive of the european part is in par with the new york port. the biggest ports in europe are bars lone in a. you can see it's right under $15 and you're $12.50. amsterdam and then you can see the rest of them. you have a whole range in europe less than $5 per passenger and you're sitting in the middle. you're not competing against these

ports but it's information that i think is important in terms of what people could charge and it has nothing to do, i think, because you're going to see with the name of the destination like we're talking about whether bars lone in a, dover, that's not a strong destination, just a port and they can charge more because they have the facilities, they have the demand and therefore supply and demand, they engage that. so in a world like perspective, you're very close to the median. in a competitive spear, you're $5 cheaper one way and more expensive the other. so there's room there for improving your port paris. then the other charges. we did the similar type of thing. we were able to collect you'll bills from the cruise line pay for these services throughout the country from different sources and in a graphic -- in a non graphic way, i can show you, these are the cost per

passenger and you see los angeles at $9, san francisco if you have the late day charge, without the late day and the late day. the late day is the fee that the lines pay to the operator currently between 21 and 22. and then seattle at 17. new york is lower in terms of the cost. when we add the port fees and security fees, it gives you this chart and i'll put that up. you're the second highest in this market. you're right below vancouver in terms of the total port cost and on a par, more or less brookland, a little bit less expensive than brooklyn. so the north your comfortable and to the south

you're more expensive so you're on the border between the two. if you look at it, you're the highest in the united states, vancouver which is 96. obviously that's higher than you are, but your port fees are lower than seattle or vancouver. now, what is the price. there's huge price. the cruise lines are sensitive to the cost because there's that business model. their business method sl how can they sale the cruise at the most affordable cost. in this case, the prices will boil down to one thing. i've shown you compared with other ports. it's a source market from this region in which case you have a lot room to move up and down because you have a captured market or are they flying people from some place else and you're competing against the others so we think that there

is an ability to move up with the port fees and there's an ability to efficients. they're almost exact and it's competition. there is a great example in the west coast years ago, la tried to increase by $20. they're taxed so they can pay for facilities. one of the major customers moved and build their own facilities and many years later la is in a worse place than they started. there was a lot of movement. we were able to double and you saw the rates for new york. the question is, how is san francisco going to be treated? but what you charge is also an

important relationship, but at the end of this, what falls to the bottom line and that's where the operating model comes into play. the port access to look at all the models that exist, look at what you're doing and say does that make any sense? first just a little bit of -- the terminal operators is a building manager. they maintain the building. they provide house keeping, they provide traffic control and help you market the facility, they schedule and sometimes in some sports they operate the ports or do the line handling. on the day the cruise ship arrives, they give check and they're the people you see around. in all of those functions, those move to the cruise lines and the ground handles. there are two basic directions. you have in the

united states, by a large the vast number used to be that the port authority itself operated the terminal. there was no third party in the middle. you can see here a little just diagram showing you the folks that are doing that. miami, san diego, so you can see the east coast ports and san diego. they're operating on term inal. on the west coast, it was provided to companies like new york that went with that model because it doesn't have a port authority. it's the city of new york that'sity owner of the facility. you basically have two frameworks. you operate it yourself or do the concession. once you do the concession, there are a number of things that we look at in terms of how you portion what is a terminal operator. the

vast majority of the operating driver is who makes the investment and in many places they tried to bring the operators and the operator makes the entire investment and that doesn't work. you want to get the economic benefit. that begins to drive the operating model that the terminal operator can take. what the operators then want is a predictable call structure to operate so they know what it's going to cost them. some are manageable except for the heavy maintenance thing. everything else the operator can manage. when third party comes in, an operator, there's four options, you can sale it. nobody has done that except long beach. you can lease the asset and

that's rare and if you lease it, the operator makes the investment and that's rare. you have the management model like seattle and vancouver where they pay the operator to operate the facility. like a hotel pays a flag. then you have a hybrid which is what your proposal is here today. once you do that, you have five different ways of really mixing who does what. so if you look at the whole functions of being the owner of the ground hound and of the cruise lines, you basically operate the terminal and then you have independence stevadore and you have one where the operate -- some are independent. you have one in which the operator then becomes stevadore and one company and the others are independent.

different ways of integrates. the terminal operate provides everything in the terminal including ground handles. and then you have an out source model which the port is going to out source like house keeping and so forth. this model is the one you wanted to study. one of the things we did was look at the different cost structure that terminals have today -- existing today based on the operational model and this chart tells you how much dollars per passenger these terminals are costing to operate. the first one here is san francisco which is your current basic model more or less and how you're operating and looks like your lay day fee that it cost to operate and you have san diego. and san diego is terminated operated. then you see miami which is operated by the port authority and with

without security and with security and you can see it's more expensive. you have miami all in which means the entire port authority goes in. then you have la, there was two models. the previous one, the ptcs had which was metro and the new one is much more expensive to la than the previous one that ptcs has. then you have singapore and new york and seattle. what basically -- the model you have today is the least expensive model to operate a terminal. you have efficient operation and a cost -- the way that they're being operated is efficient compared to everybody else. you have a good business model. as a result when you take that revenue that you can charge and you add or subtract charge and that's to pay your

rent, san francisco is the best performing terminal to the port terminal in the united states or anyone we've looked at. i can assure you the model is the best that says i can charge so much and then this flows and i can reinvest into the facility. we felt that the conclusion is the model that you're going to propose to use and it has been proposed to you is the best financial results. the operators has offered to share with the revenue. we haven't found that anywhere else that that has been the case. however, obviously the key will be as moving forward is in negotiating the details with the operators. you want to be able to align your interest so we start at the beginning. so the customer will receive inpeckable results and you'll

get the highest yield, that the community will get the highest yield and you get the best bang as possible, so a careful, thoughtful process in negotiations and structuring the agreement that it works for all parties. it seems like you have a great framework to move forward with the facility. so i leave this one because now i turn the pie the other way around because when you need to do is create a structure that moving forward is that payment by the cruise line is a potential revenue that's going to be did divided by all the parties. that division becomes a fair division between the parsley these and it reflects the risk and rewards that each one has. you want to minimize the potential charges to the line so you maximize your potential volume of passengers here, but on the other hand you

want to maximize your revenue so the structure, i think we think is the correct one. we think that you are -- although your cost are higher, we think that it's obviously supportive by the market you have here. we think there's some room to move up on the tariff to get more revenue and you have a good structure to be able to throw it to the bottom line as much as possible. that was my report and i'm happy to answer any questions. >> thank you very much. comments. we do have dave hill. after dave, renae decrue and then mike falonte. >>

>> madam chair, commissioners good afternoon. my name is david hill. i'm the vice president of iodw ships local 34. our office is in san francisco. i like to speak to you today on the manning clause that was part of the business plan presented to this commission on september 5th. there's a couple of items concerning manning which are incorrect. based on their commitment to the union in our past meetings. we believe that our statement about hiring a full-time mechanic was meant to say a full-time local 34 clerk supervisor. and the highering of a local mechanic. there's also a statement in there about about hiring of a local for

man. there was several attempts to contact metro but our phone calls went unreturned. local 34 has and will remain -- we thought we received the same commitment in return. thank you. >> thank you. >> renae. >> good afternoon, commissioners. my name is renae. i'm the labor relations committee chairman of local 34 ship clerk association marine clerks. i'm going to go over a little bit of ground that dave went over. i would like to point out that at the may 14th commission meeting, manning for

special events was discussed as part of metro presentation. that same commit was made by the iod. that meeting is held prior to the may 15 port commissioner meeting. that was at the manning for special events would be multiple local 75 steady guards and a gear man steady local and a steady 94 forman. this is not reflected in the september 5th memorandum which is the supported business plan. in fact information manning stated as grossly inaccurate and complete. i wanted to quote from the documented which you all have, they state on page 4, metro proposes that the labor force for cruise operations will remain unionized with

jurisdiction. the labor man hours are current to the levels on cruise days, the characteristics of the new pier 27 facility with its public access will require additional security and maintenance workers as negotiated in the a greechlt. they propose to adding these agreement. three full-time iw security guards for the entire pier 27 site including the northeast plaza and the public access areas. number two, one full-time iow maintenance mechanic and one full-time local 94 forman. there's no such thing as a local iow maintenance. as far as local for man that should state local 41. our metro was selected to run the cruise

terminal, it's permanent that they live up to their jurisdiction. these errors need to be corrected. they'll continue to perform the work assigned to them through the contract and mited -- committed to us through metro and cruise lines and special events. all of the iow are excited about the new opportunities presented to us regarding pier 7 and we want to thank you. >> thank you. mike. >> good afternoon. madam chairman and commissioners and monique and the director. real quick, i wanted to -- not on the subject, but thanks to everybody that came to the 150

celebration at the iow local hall and it was a success and the public enjoyed them self. he did a great presentation and i want to say that i've known san francisco as the highlight places in the country to come to. i know that the cost are a little higher here, but as everybody lives in this area realizes the cost of living is a lot higher here. but moving forward, i have had discussions with stephona and we're going to meet on the 18th to talk about the manning issues going forward with this operation. i believe that there could be a resolve in getting the right type of manning going forward, but it is going to include the iow at facility to make it successful. i've heard some different things about making it more proficient and a better

operation. there's a lot that labor can do to show that. some of the designs of the facility and that's some of the things we want to talk to about loading the ships in a proper way and the way the ships are going to be docked. it's going to be a challenge at times because the area is not set up for it yet, but moving forward i think that it's going to be very much a success and i appreciate your time and i think when we meet and we discuss and break down the operation, it's going to work so local ten is on board with 34 and 91 and 75 so i appreciate your time. thank you. >> thank you. >> is there any public comment? commissioners, any comments? >> i would like to thank you for a thorough presentation and that was easy to understand and i'm glad that everyone is

working together and we've all been -- we've come up with a really good plan of action to move forward so this is really exciting so thank everyone. >> first of all, i want to say to my guys from local 34, you should have been at that meeting about five or six weeks ago. what you brought up was done with john doll, you guys weren't here. the only people that showed up was mike and ed. you didn't show up and those issues were brought out. they were mended and the right things were put in order. i want to tell you that. secondly, to your presentation, i really appreciate that and i'll tell you why. as commissioners we have talked and discussed, san francisco is a marquis city like new york. new york like san francisco sometime is hard to market but

i see the potential here that we can market this city, we should and that we saw how he broke everything down and stuff like that, but i think we're positioned that if we continue to work that we can double the amount of cruise ships coming to the port of san francisco, but i think it's going to take some heavy lifting and i'll tell you, my brothers in local 34 and those who weren't here in 75 when i said, i said it to the port and i'll say it again. in order for us to get to where we need to, it's going to take heavy lifting from the operator which is metro, the port of san francisco and the iow. and we're going to have to go out together to market these issues and i can tell you if you had been at that meeting, this commission told metro and the port and also to

iow we wanted -- if there's any kind of labor problems, any kind of problems we want them worked out. we want people to come off the ship in the city and they see the professionalism. we market in hospitality and that's what we have to do. i think as we move forward, you heard him say that, vancouver used to have all the cruise ships up north. then seattle got into the business. seattle took a lot of vancouver's work and seattle is hitting at millions. so what we have to market is a good attitude a good team spirit and work these issues out. also at that meeting i

was clear with stefon and the issues he had and the iow and i expect our guys to be profession and work with metro and work with the port and do the heavy lifting we need to do. and i'm going to be going with the port down to new orleans, mike from local 10 will be going and we're going to sit down with metro and we're going to talk about how we can better this port so i really think we are in a great opportunity there, here where we are today with cruise ships. it's a desire that people want to take cruises so we have an opportunity within maybe or four or five years to double the cruise ships. the terminal will be opening. that was named after our second president of our union. we have to step up very tall to

show jimmy that honor because he was the president of the port commission and what he did and our commitment, as iow members and this community. this is the only community this this region. oakland doesn't have one. people want to come here. we want them to come here. so i want you to know that let's work together, let's get this done, and let's do everything that we can to market san francisco because we already have the marquis name. so that's all i'm going to ask and that i appreciate you guys all coming out today and i appreciate the efforts but i'll tell you sometimes, sometimes up don't come to meetings you miss out and if you would have come and i called john and jim and they made the corrections and they got local 91 in there and they talked about local 10

doing the maintenance 10 and that was taken care of if you had been there. thanks. >> i think my fellow commissioners have said a lot. i want to thank lewis for a great presentation and we had a conversation earlier today so we he were informed. the best thing -- i think want to thank the staff as well for making sure that as we get down to putting together of what our final negotiation proposals with the operator of labor that we thought through this carefully and today is another chapter to make sure we have the right input. we feel fortunate what we heard today is validating the business model that we're on is a good one. it's good for the city and good for the port and good for labor, good for our

passenger cruise -- cruise passengers, so we have to be thoughtful because we have time to put it together right so i hope that's the purpose of why we're spending time on this and i think we're on the right track. we have a few wrinkles here and there but we'll iron those out and i want to thank you everyone involved so let's move forward. thank you. >> item 11 b request approval of lending rights agreement license with tide line marine group incorporated extending term permitted uses and establishing lending fee. setting minimum performance standardses and modifying the rights and license default. >> hi commissioners. this is my favorite commission. we heard of fairies and cruise

taxes. we had an riq and looking for parties to establish a non water front tax. pier 40 at harbor and pier 1 and a half next to our office. shortly after we put it out, it was approved. tide line ink who was been successfully operating for the last year and another company called san francisco water taxi out of pier 39 who will commence operation in the next ten days just having purchased two boats that are docked at pier 54. tide line has been the first company to really dip their toe into the water and they've had very good success. they've been -- they've been making significant progress in establishing a viable water taxi service for san francisco in an unproven market. they

have taken nearly 3,000 passengers in and around san francisco providing services 24 hours a day, 7 days a week and they've had 700 calls into our facility. it's a great service. if you live in marine you can take the boat and end i in pier 1 and a half and have dinner at our restaurants and go back to marine or vice versa, if you live in the city, you can go over to sams or jacqueline square and have dinner. tide line along those lines has negotiated landing on those points in the marine and east bay. they believe they're positioned for substantial growth. their demand has been increasing and they have these new facilities that have been collaborating with other entities so they're looking to expand their market and ask the port to consider an amendment

of the agreement to last year. it will enhance tide lines ability to attract investors and grow their fleet and businesses. they believe these changes will allow them to double their revenues in the near term and double their capacity providing services to the port. the proposed amendments are detailed in the staff report but it's an attention of the original term. they asked for an additional five years so it's a ten year deal with a five year option. they have asked -- the port has asked and they've agreed a license fee of $300 per month or 7 percent of sales which ever is greater. we had attempted to do that $15 per landing but it's