terminal. the other element for parking and commercial industrial rents what's really important to note is the return of the 34th america's cup convenient tue to the court is allowing us to bring those venue sites back online for interim parking or re-leasing and those are pretty large drivers of this growth over the next two years. but looking back, here i'm showing how we've actually done on our revenues going back to fiscal year 10-11, you can see a steady growth in our revenue and right in the middle there i show our 13-14 budget and i highlight it because it dips below prior years and then you can see in the 14-15 and 15-16 budget we are actually budgeting more. we're showing we are trying to get those

budgeted revenues closer to what we think we are going to generate and be consistent with those prior year trends so we can really identify the sources that we're going to designate as revenue. and then for expenditures i also show the two-year growth and as you can see, salaries and fringe is a huge investment. our people are obviously a critical part of how we run the waterfront and of the growth over the two years, over $2 million of it is just for salaries and fringe but it's important to note that about half of that is the cost of existing staff. so salary and fringe costs are growing and of that, particularly fringe, departments are having to make higher investments in the two budget years because we're still replenishing the pension system after the recession. so after this point in time we should see a reduction in the growth in those costs. this is really

just a push to replenish that system. and then as i'll go into more detail, the other half of that are the staffing investments, the port staff had looked at a backlog of positions. we really think they are critical for strategic, you know, approaching our strategic needs, where we want to go, as well as just a backlog of ways that we could really just be more efficient in our operation. and then the other element is other current expenses. they are just costs related to running the port like janitorial services, security, and the like. there's a financial policy that was passed through the city for how we manage certain costs in our budget. it's not something that's within our control so that's another reason why our budget grew. and you can actually see these growth trends are consistent with prior years. you can see as the operating budget grew, i

detailed it, personnel, debt service and other current expenses are some of the main drivers of that growth in prior years. as far as the personnel are concerned, i mention that there's 1.1 million dollars in that two-year period of increased salary and fringe benefits and that increases our full-time equivalent count so each full-time position in our budget by 7.56 fte's and we tried to address some key issues. so improving efficiency and effectiveness of operations, our maintenance division has identified a number of ways we can adjust our staffing in order to be able to manage workload, identify project needs and just get work done on a more efficient and effective way. and two of the key ways of doing that, i only highlight the 0932 manager 4, this is

actually a new assistant deputy director or deputy director of maintenance. this person would come in and serve a new role of overseeing a functional area of the port and by doing that, that would actually free up the ability of the deputy director to focus on more long-term strategic planning, resource management and the like. that change, along with reassigning the functional areas of the maintenance division to other managers, would allow just the maintenance division to perform more effectively. addressing a changing and complex environment, so this is adding a new finance manager to the finance and administration division. this position is really critical for supporting the deputy director of that division, be able to oversee a whole line up of

finance-related issues from long-term financial planning, capital planning, debt management and when i say debt management, this also means being able to pursue the infrastructure financing districts, the ifd's that we talk about in the capital plan. really it's saying without supplementing the port staff resources it's going to be difficult to really pursue these longer term analysis and support roles that we need in our staff in order to make the changes that we are pursuing with capital. improving and protecting revenues. so our real estate division currently has the property managers there, currently have a workload of about 90 leases per staff. the private sector has between 25 and 30 leases per property manager is more of the standard. so what this would do by asing -- adding a new

property manager would still be approximately 3 times the workload of the private sector. this really trying to add resources to division where there's a lot of need for help, work with our tenant, protect revenue and even if possible identify new ways to pursue additional revenue such as by pursuing leases that have higher annual rents. and then an asset manager. this is a position that would really be focused on managing the port's assets, trying to make strategic investments and working with the real estate staff to try to get that work done. and then i think meeting strategic goals, i didn't highlight it here but i meant to say that the 1246 position would actually be doing, focusing on work force development. so currently the port works with the office of economic and work force

development and programs like city built to try to get san francisco's work force developed and be able to invest in people that can come around and work for the port. we don't have a designated person at this point who can really focus on what we need and trying to get the right staff and working with oewd, we need somebody who can really manage that and what this actually is is a constitution so converting a lower level class to this higher level to allow this person to take on this new function. last but not least, temporary salaries. these are actually for project manager type positions that the maritime planning and executive divisions would use to help implement projects. as you know we are working on a number of projects on the city and it's difficult to get all the existing port staff to bridge the gaps of getting, working

through the different pieces of all of the projects. and this would allow the divisions to have additional resources to do that work. so the topic that everybody was just enjoying, we have our capital budget. and what this shows here is we have budgeted 12.8 million dollars each year over the next two years and i have the allocation by areas on the port. i didn't go into a lot of detail but the staff report does provide it and if you want even more detail, the port secretary has all of the project explanations on record as well. but what i wanted to emphasize here is that even though we're doing pretty well relatively speaking, like i said there are some years that we budgeted just over $10 million, other years we budgeted upwards of 15 and 14

million, 12.8 is doing pretty well. but going back to elaine's presentation talking about the depreciation and amortization schedules, you can see that we should be spending more, like 22 and 23 million dollars a year. so it's all the more -- while i'm supportive of our operating budget and believe that we've done a good job of keeping it from growing too significantly, it's clear that we have a long way to go before we really finance capital at the level that we need. then the last item on the agenda, my agenda, is this 5.2 million reallocation of previously approved funding. this is really actually the first item is an indication of a delay in procurement of very large pile work equipment. we realize by moving the funds into the pier repair project, we would have much more

flexibility in how the funds are used. if that procurement gets on track and we're able to complete it we can still spend it out of this project. if not we can go ahead and use these funds to do critical repair work that's on our line up over the next two years. then the next reallocation, city certificates of participation or cop's. it was part of the america's cup financing package. when port (inaudible) came to you in september we identified these savings so we would be returning to you to figure out what to do with that funding. well, this is us coming back and saying that there's a plan to spend those funds, about 1.2 million on public restrooms, we have amador street repairs and pier structure repair. you can

see the pier structure repair project is really critical. we can just keep funding that project for the amount of work that we want to get our pile repair crew to address over the coming years. actually just to go back to that slide, but i just want to emphasize that this is a neutral change that i'm not counting it as additional capital spending because we're reallocating it from other projects and reallocating it to new priorities. so just to reiterate, i believe we have controlled our operating expenditures. like i said, it's only about 4.5 percent increase in the first year and both fiscal years we're allocating or designating significant amounts of operating revenue to future capital. we are showing strong revenue projections and as far as capital projects, port staff

really looked diligent in identifying the highest priority projects that we think are ready, not just high priority, but shovel ready, ready to move forward, or if they are not shovel ready that we're doing things like doing a see wall study and an eir on the southern waterfront. so next steps, on the 21st i'll be submitting the budget to the mayor's office. but our next item, the next port commission meeting i'll also be coming back to you seeking approval of this item. if there are changes that you need to make, then i will report those to the mayor's office and then in august i'll bring the final budget back to you and report any significant changes that occurred. so thank you for your time and i'm happy to answer any questions. >> is there any public comment? seeing none, commissioners? commissioner brandon.

>> thank you very much, this was a great report and you did a great job summarizing everything. and i think it's wonderful that we're asking for 7 new positions. i'm sure they are much needed but i know that in the past we've limited that so how confident are we that we'll be able to get these through? >> we're not confident. we are proposing what we think, what we know we need and what we need to manage our self sufficientry but the process is the mayor's office is looking to see very low rates of position growth city-wide so the mayor's budget director will be looking carefully at our position request and we will need to make the case that these positions are critical to the port. after that process we will go to the board's budget analyst for the same type of review so we will be making the argument that these positions are needed for operating efficiencies and revenue enhancement but we will

be very grateful if all these positions survive the process. >> that would be wonderful. usually we get a supplemental binder that actually details the operating income and expenses. >> i can provide that to you for the next --. >> that would be wonderful. and then the capital plan, usually we have a summary of all capital projects, not just the amount that we're putting in from the capital budget, but the total capital project list that has grants and where the funding may be coming, not just the capital plan, but we have a lot of projects that are funded from other places. it seems like if we're just focusing on the 12.5, 12.8 million, it will take us forever to get through this 1 point whatever billion of capital needs. >> i believe that's an

atampment to the capital plan report. >> attachment, i have b and c and i have a. >> i think i know what you're talking about and i think it comes with the budget. i don't think we did it last year. >> attachment 2? >> i think i can answer that question too. in previous years we did a very detailed capital budget book that showed all sources and all uses and we haven't prepared that in the last two cycles because of band width issues and difficulty with the growing workload in the finance unit. what we do have is a very, very detaild description of where the capital budget is going in terms of project which we have lodged with the port commission secretary and we haven't included it this time and that

goes through the capital budget. we can break out our sources and uses if you'd like to see that. >> a summary, it doesn't have to be that detailed. >> when we return in two weeks we'll have that for you. >> and the budget also, i'll get that before --. >> yes. >> thank you. >> there is an attachment to the report, have you seen it? attachment 2-1. >> the last page of this --. >> c, b >> no, the budget, 2-1. >> gives you a summary. >> i think what commissioner brandon is referring to is we used to provide the commission with this summary of what is new funding but also what funding was in place on projects that were in progress. >> much larger. >> larger report. so to the question you asked earlier what are we funding in the current

year we're already in, that would have been in the other report. so we'll get you that. i think i know what you want. >> thank you. >> i don't have any other comments, just want to thank you all. i know what incredible amount of work has gone into this. we all look at where we're having shortcomings but really want to applaud you because i really feel like as was pointed out earlier, we have gotten on better financial footing and want to thank all of you for all your hard work on that and for a terrific presentation and we look forward to seeing you next month -- two weeks, two weeks. call the next item. >> item 9 a, request approve to the second amendment to the exclusive negotiation agreement with gsr arena llc for the lease and development the of pirs 30-32 bounded by the

embarcadero road way and san francisco bay and the sale or lease and development of swl330 bounded by the embarcadero road way, beale and bryant streets. >> we are joined tonight by several folks i'd like to point out, david kelly is the general counsel for the golden state warriors representing the warriors. from the office of economic and work force development we have ann topia who worked on the ena and we're also joined tonight by ken rich who is mayor lee's director of development and is acting waterfront projects director overseeing the warriors project, the pier 70 waterfront height project with force see and the i'd like to invite ken to the podium to make a few

remarks to the commission. >> good afternoon, commissioners, as brad said i am ken rich. is this sound working? it seems very fuzzy to me. i'm ken rich with the office of development and work force development and i am the mayor's waterfront development office standing in for jen mats who is on medical leave. you are about to hear a presentation about a proposed extension on piers 30-32. as you may know last monday in front of your cac, which was formed to get community input on the project, we announced a new project schedule for this project. the highlight of this new schedule are an eir published in august of this year, a term sheet in front of you that's commissioned for endorsement of november of this year, the actual transaction documents and project approvals in front of this commission in

january of 2015, and what this schedule does is it gets us to an opening date for the new facility in fall of 2018, so staff may be giving you a more detailed schedule but that's sort of the highlights. i wanted to continue and say that we accept and expend to continue our intensive outreach centered on the cac as the project goes forward for approvals. we believe we need to work with the stake holders to come up with a project that succeeds in the following respects, first physically appropriate for the neighborhood and the site, you have seen many proposals that have been defined and will continue to be refined, a project that's fiscally responsible and advantagous for the port and for the city. thirdly, a project that addresses quality of life issues, in quotes, for the surrounding neighborhoods such

as security, crowd control and cleanliness and fourth and last but not least, that addresses traffic and transportation concerns and issues so that people who are -- so that most people who attend events at the facility are not driving to the facility and those who do drive are parked somewhere off of the embarcadero so the traffic is kept to a minimum. with that, that's all i have for you today, i will turn it back over to brad. i'm happy to take questions once the item is over. thank you. >> so my presentation on the second amendment to the ena is fairly brief. in november the project sponsor attended the port commission to unveil version 3 of the project. craig dipers gave a pretty

compelling vision. i've got a few selected slides. this is looking south from the embarcadero of the proposed fire station component of the project apblgd some of the redesigned retail along the embarcadero and this is looking sort of in the northeast direction across the pier level plaza to some of the open space that rises to meet the multi purpose venue. that version 3 differed from the prior versions in some key respects that i'll just i'll provide a few details. they really worked hard to lower the height of the facility so that it's now 125 feet above the pier deck. they have tried to shrink the total square footage of the development really largely in response to some feedback from bcdc staff. they have increased as a result of that shrinkage the amount of open space on the project now totaling a little over 60 percent of the site or 7.6

acres. they've got a new entrance to the facility, a mid-block entrance along the embarcadero that's designed to really improve safety and separate pedestrian and bicycle traffic from auto traffic that is needing to get in and out of the facility. and then they substantially redesigned the retail frontage along the embarcadero as i showed earlier. they have also increased the amount of fill removal in this new version, actually cutting away a portion of the pier and showing new bay water. it's this version 3 that is being studied in the environmental impact report. the staff report also provides details about the program for seawall lot 330 which i'm not going to go over now, they have not changed since version 2 was issued, but together those two sides of the street as they are described in the staff report

are the basis of the project description that the planning department is studying now. you've been reading in the paper that some other things have been happening too, the warriors have announced a new cost estimate for the facility. we, too, at the port have been working to come up with a third party validation of that cost estimate. we just received that cost estimate, prepared by martin lee corporation from our as-needed pool in the engineering division. they estimate the hard costs, not including design, of the pier substructure, the rebuild of the pier substructure, at approximately $171 million dollars so very close to the warriors' revised estimate for the project. as ken mentioned we're here on this ena amendment largely prompted by changes in the schedule, new opening date for 2018 means we are taking more time in the public process to

get to the eventual approvals. those were contemplated in the not too distant future under the existing ena so we're pushing the schedule back by essentially a year and i'll go over that in some more detail. that's an additional year of work, so there is a revised transaction budget providing for reimbursement of some city costs, particularly city attorney costs, oewd costs and some consultant costs to cover that additional year's worth of work then there is a revised reimbursement schedule by which the warriors would pay back those expenses. this is a little difficult to read. it's available in the staff report. the ena includes about 14 items that are performance milestones, performance benchmarks and the warriors are required to achieve those benchmarks by date certain provided in the ena they have completed the

first three items, those all were completed in 2012. they provided their formation documents for gsw llc, we entered into a conceptual framework that was the basis for the fiscal feasibility project and the board of supervisors found the project was fiscally feasible. with respect to pretty much all these other dates we now shifted them forward a year, we are respecting the draft environmental impact report to come out in august of this summer and then go through an extended comment period. we're looking at the port commission consideration of a term sheet endorsement in the november time frame followed by board of supervisors action shortly thereafter. final eir certification would be in early 2015, followed by actions by the planning commission and the port commission and then by the state acting first through the state lands commission and then

through a number of regulatory actions including bcdc so that is the revised schedule. moving on to the new budget, we essentially added a year's worth of additional costs to the fy 14-15 reimbursement schedule totaling $875,000. that covers again city attorney costs, consultant costs and some oewd costs. along with that we're proposing, there's an existing deferral in the ena for reimbursement of some of these costs that was due to expire in april of this year. consistent with the other changes in the schedule we're pushing that deferral date out a year. gsw under the proposed second amendment would pay the port $200,000 of some outstanding costs and we would see about $500,000 deferred until april of 2015.

so that summarizes my presentation. i'm available to answer any questions that you may have. >> so moved. >> second. >> is there public comment? i have one dennis mckenzie >> thank you, commissioners, i'm dennis mckenzie, education. i provided you with a short update on proposal to ask the warriors to collaborate and provide a college classroom that could also serve as a field study classroom which as one -- also a copy of a letter i provided to this commission 5 years ago exactly which details some of the comprehensive

benefits a high school classroom inside this arena could provide. the port property, everybody talks about trying to attract more visitors and tourists and i consider this a magnet effect, not only tourists to walk around and advisity the water front but also become involved in high school projects we have here, high school students and kids and classrooms from around the state and around the country to come meet our kids and see this high school classroom that would be provided as a model for other sports facilities around the country. i also want to support this exclusive agreement with the warriors and hope all the city leaders and the port and the warriors continue to work on this. obviously it's a challenge, has many different challenges, not just the

neighborhood, our socioeconomic situation throughout this city is very critical and i believe with some intelligent vision both the seawall lot 330 and the arena could provide a lot of benefits. thank you very much. >> thank you. thank you. >> sue wester, i'm reading from page 5 of your report. why the ena in order to provide adequate time for environmental review, consideration by state and federal agencies and maximum public input. you are doing this schedule. the public is being short changed in the schedule that is before you. the dar is supposed to come out august -- pardon