continue to establish the economic development in communities and that is what the port is all about. >> right. >> the more that we can bring on and it will be beneficial for the international training for our community and that is what we need to be and i am clearly in support of this, thank you. >> thank you. >> that is really how we are trying to position it and sell it as an economic development tool for the whole region. and it is an opportunity, not only to help the existing businesses get stronger and be more competitive but also to attract new businesses into our area that are looking for, locations where they want to. >> and i think that it is fortunate that we have got practically the whole northern area of the bay area that is actually coming through the port of san francisco and so i commend all of you for being able to achieve that. >> what kind of efforts are we taking to get the word out about the zone in terms of perspective members? >> well, i mentioned all of the organizations that we reached out to directly, and we are getting asked to make

presentations quite frequently and the northern trade center has asked if i would do a web-i-nar for the members to talk about the zone benefits. we are working with the governor's office, as i mentioned, and i think that this is a great opportunity to partner with them. and encourage them, when they are contacted by businesses that want to locate in california, and that they maybe they try stea r them our direction and they contacted me to ask how far the jurisdiction goes because they have companies that are looking at specific sites within our service area and so, but we are looking for ideas, and we are intending to issue the press releases when the expediters and phillip 66 sites go active so just that we can get the word out in the media, that the sites are activated. and then, we are trying to get early adopters and different industry as one of the reasons that we are talking to oakland

and we figured that we have the similar, business, you know, the business mix in our, overlapping in our area as we are trying to find, the different types of businesses, like high-tech companies, or green tech, clean tech, and medical device, manufacturers, and you name it, and apparel manufacturers and we are trying to find the early adopters in each of these industries that we can get on board and from there, we can go to the other industries in the same or the other businesses in the same industry and encourage them to have a closer look at it as well. so we are trying to come up with all different ways of marketing to the zone and even doing the collaborativive effort in the bay area as one of the ways that we are trying to brain storm on that in that regard. >> thank you. >> any other comments? >> seeing, none, could i call for a vote? all in favor? >> aye. >> opposed? >> item carries. >> thank you very much. >> thank you. >> item 9 a, request approval

of port's physical year 2014, 15, and 15, 16 biennial operating and capital budget. >> i am megan wal lace the port manager and i am seeking approval of the proposed 14, 15, and 15, 16 bennial and operating budget and no changes have been made to the budget since the informational item on february 11th, however, i do hope that the five new attachments that we included with the staff report helped to answer your questions and provided the detail that you were looking for. and as a last meeting. and i am here to answer any other questions, and thank you for consideration of the staff's proposed budget. >> public comment? >> seeing none, commissioners? >> i am sorry, do we have a motion? >> so moved. >> second. >> public comment? >> seeing none, commissioners?

>> yeah, i just have a couple of questions, and do you know, you do, know that we are not going back to the actual this time, but do you know actually in terms of the general fund, actual result for 2012, 13, verses the projected here which is the $1.7 million on the general fund? i am just tying to get a sense of whether the city actually ended up better? >> oh,, okay, so you are talking about the city's performance. >> right, just as a general backdrop for us. >> i am sorry, i don't actually, know how the city ended last year. but, they do, i would have to say, and assumption based upon the projects for... >> you know that they did improve, and i don't know that the exactly by how much off of the top of my head. but generally, the city's general fund position improved quite a bit. but the expenses of the general

fund are still out scriping the revenues of the general fund and the mayor's proposed public instructions to the general departments included reductions in spending >> right. >> but, what you are showing us in the general fund was because they do it every two years and are they, and is this something that was there forecast for the 14, 15 was done in 2012 or an updated one? >> it is actually updated. currently only the enterprise department and so the report, puc and the airport we are the only one on a fixed two year budget and while the other city and general fund departments do prepare two-year budgets they are on a rolling cycle and so they actually did do a budget update in 2013, 14, and so in that. 13, 14, budget, they made projections for 14, 15 that now, are appearing to be they are having to reconcile for that. and ask for additional cuts, for next year's budget.

>> right. >> so it is said a different way and you may recall that when we had our second year of twot-year budget, and the fiscal year we were allowed to make changes up to 4 percent and, this is the second year of twot year budget and, the first year of the two year budget they will be working on the second year and there will be allowed to make much more significant adjustments and the budgets will be reviewed more diligently than we were in our second year of a fixed budget. >> yeah. >> so it is not really apple to apples yet. >> i guess on the port side i appreciate that you did provide i think, more information not just in the attachments but some of the detail of the assumptions behind the revenue lines, and the only one that i did want to ask, is the interest rate on investments because, what you are assuming that the actual amount that is available for investments, because the interest income is going down, so what is knowing

that we know that interest rates are going up, what was the interest rate used for investment rate of return? >> if i may, i would like to call on my colleague, lawrence brown and he actually monitors our income. >> first, i did not bring my exact numbers, but we used the 0, 6, 5 percent for this year and for next year and the year after. and that is the current average interest rate earnings that we are receiving through the first seven months of the year. >> because... while, the fed has made some comments that they will be increasing interest rates, in the future, it has not happened yet, and for, in the interest of being,

conservative, we were looking at whether we are more concerned about the average the actual performance on the portfolio is today. >> so i would just trying to find where the opportunities are going to be and so for 2014, i would agree that we don't know when the rates are going to start increasing but for 2015 and 16, i have a feeling, and i have been waiting for a long time. and i want to understand that i think that line is going to go up. and as far as the revenue is concerned, i think that we need to understand that. >> that is an opportunity, and in our past, projections and we have looked at things and we have assumptions for the modest growth, and it turned out, and historic for the past few years and even the small, modest increases have not happened. >> well, let's get, and if the rates double, we will earn

another 600,000, so... >> right. >> and on the we have not spent a lot of time working on where the interest rates might go and we would love to see them go up on our investments but not totally to shoot our new revenue bonds, so, we will be monitoring that. but, what will happen is that that ends up being surplus and we will come back to the bulletin and ask you to appropriate for the different use and it rolls into the capitol funds for the next budget. >> and this line will be either reflect that our cash balance is going down because they are using up more cash because of the rate of return and i was trying to figure out you are expecting the cash balance to go down or you just kept as you said, the average interest rate that you have used and understanding the assumptions behind the forecast and so if the cash balance, because i don't remember the balance sheet any more and i am sure that you will present it to us and i don't have that number. >> the cash balances were not

going down, if the interest rates went up. >> and so it will generate more interest. >> more interest income. >> right. >> that will fall the fund balance and we will be available for the capitol or other uses. >> okay. >> and then my other question was the other revenues, and right now, we are receiving the transbay environmental payment of 550 and we have had the presentations and brad is not here today. but there is a possible other transaction and it is more question of not saying that you should put it in the budget because it is not done, but the possibility of the other it is a joint, sort of project, pgand e, and where that stands. >> and it was approved unanimously by the board of supervisors which is where brad is. and so the transaction with pg&e waits the mayor's signature and do you want to speak on to what you assumed in the budget for that? >> actually we have not assumed anything at this point >> that would be another... >> i believe that it is $15 and a half million.

>> okay. >> and in total rent. >> but in one of the reasons we did not assume is that we said that we expect the realization on the land value to occur outside of this two-year period. >> okay. but there is also, some sort of fee payment as i recall. >> there is fee payments and i thought that you did put that in the budget. >> i don't think that it is in here and now you are telling us that it is approved and i am always looking for where the opportunities and possibilities are and i want to be sure that we don't of them. >> and i believe that there is a question in how they want to invest those funds and we have not had the discussion in the purpose of incorporating it into the budget. >> i have gotten the approval and it will be in the next cycle and you will be able to reflect it and decide how. >> i believe so. >> and council is asking me to clarify that the board endorsed the term sheet today and we still have to do the actual transaction documents. >> okay. >> and, let's see. just the other question on the

south beach, you do, and i did not put the two together, but the south beach marina at this point is still negative if you would do a stand alone of the revenue verses expense and it is not break even yet and what is the status. >> we reflected it as being neutral in the budget because it does not effect our bottom line, so, from the port's standpoint, it is budget neutral >> but it will be reflected i think, some one said that it will be under our jurisdiction at some point in this budget cycle for the next two years. >> and it as it stands now, we believe that it will come back to the port upon the final payment of the outstanding and indebtedness in 2015 and so that will capture the second year of this budget, and we are still trying to negotiate the terms under which it will come back to us and make it neutral to the port. >> we don't know yet the final answer of how to get it neutral. >> we have our idea and we have

not had them accepted. >> okay. >> i will leave it to that. >> and lastly, in your departmental programs, fire protection, and it stood out to me as over 3 million dollars, could you explain what goes into the fire protection? >> so that is essentially the fire boat, program. and as well as the fire inspection and it is primarily, staff, and so it is the staff that supports the fire boat. as well as inspection, staff. that serves along the port water front. and a small part of that budget is actually also, for dry docking the boat and that sort of thing. but it is really for water front fire protection. >> okay, just seemeds like a very, large expense. >> yeah. >> commissioner murphy? >> yes. i had some questions at the last meeting and you have answered them adequately in your brief here. >> thank you. >> thank you. >> thank you, for adding the

additional reports that i asked and they did answer a lot of questions for me and so thank you so much. and i know that we are spending a lot of money on the blue, green, way and different projects in that and i wonder if we could take in and i know that there are a lot of dead pilings in the water front and so we are beautifying and we are looking at the pilings and so i am wondering have we or they have put it in the plans to be removed? and i know that for example, pier 64 is example. >> it was a pilot report, and it was a condition for the america's cup and we spent about a year, or six months or so, trying to figure out the

most cost effective way to do it and in the end, we determined that the most cost effective way was for the port maintenance staff was to do that removal and quite a bit will be removed now and what would you estimate that? >> 300 piles as of today. and we also have an obligation that was part of the exporitorium transaction to remove the piles further south and it is not site specific, and but, we have an obligation to remove those piles and we have not determined how to fund them and we had at the time of the transaction, and we had an expectation that we will be able to receive, funds from the federal government, through the water resources funding which has yet to be approved and so we may need to look at other sources in time to meet our permanent obligation, which i believe is 2017 and so, the answer to your question is no, there is nothing specific in

this two year capitol plan that addresses pile removal. but we definitely have those obligation to fulfill. did we know what the cost is? >> i think that under the exploritorimu., we estimated 2 million and that was four years ago, i think, when we made that estimate. but i dent know what it is costing us to use our own plan power. >> i mean, if we were to remove the pilings or the pier 17. >> we have not done any kind of asset that i am aware of. tom are you aware of that? >> no. >> i just hope that it is something is that we can look forward to >> i am happy to do it but i will take it as a request that we put that forward. >> thank you. >> commissioners? >> i have one more question, sorry. >> on your attachment seven, on the vacantcy and as of

december, 13, one space stood out, and 501 ceasar chavez, what is? a question from leasing can respond to since that was a bigger space. it is office, obviously but what is happening to that space? >> that is class c, office. >> sorry? >> class c, it is in the south. and we are negotiate and work withing a city agency to take over the balance in the entirety of the building and we have experienced the high vacantcy rate there and what happens is we have gone through the several film companies that have gone in there and they are in there for six months and move out. and so, it is a tough rent. and it is because the building, it is not in good condition. >> okay, it is in good condition and we maintain that

it has a parking lot and competitive rates and, modified, full service for $1.25. and you know, i want to say that it is a contractor's space. not where maybe an architect, or someone who wants to be in proximity to downtown would want to be but we have had three or four stable tenants in there, muni was the anchor tenant and moved out about five years ago and we have had trouble, except for in the intermittent film groups that we have had in there, and i was hoping that we are working with the city real estate with a city agency and to hope to take over the entirety of the building. >> this will be a city agency >> yes. >> it will be a city agency. >> so hopefully it will not show up as 42.4 percent vacant >> we hope not. >> thank you.

>> thank you. >> to answer my questions, and thanks to commissioner woo ho, and several others that i had not thought of. thank you very much. >> thank you. >> so, call for a vote all in favor? >> aye. >> aye. >> opposed? >> budget passes. >> item 10 a, request approval oflease no. l-15771 for the ecocenter at heron's head park and surrounding 6,058 square feet of non-exclusive license area, located near the intersection of jennings street and cargo way, with the bay institute aquarium foundation, a not for profit california corporation for a five-year term with two two-year. (resolution no. 14-13). >> and that title, longer than my presentation. >> good afternoon, commissioners i am happy to be

back today to for your approval of 15771 with the foundation to lease the eco center. at your last meeting on february 11th, you heard from the bay institute aquarium foundation and its two partners, city college of san francisco, and the aphillip institute regarding their plans for how they propose to work together and each bringing in the different but complimentary strengths as you heard from these organization and from the public, the eco center, presents a truly unique environmental education opportunity. and it was born of a community driven initiative to help connect people in south east san francisco with the natural beauties that is provided at park and also to demonstrate the sustainable building

technologis that reduce the environmental impact. and the bay institute aquarium foundation and partners are committed for the original intent of the eco center providing a hub for environmental education and a treasured resource for the south east san francisco community. the key lease terms are consistent with the port's standard form lease and there are some special conditions, including a five year term with two possible two year options to be offered at the port's discretion, rent of one dollar a year provided that it is a non-profit organization and operates in accordance with the approved program plan and the port is assuming building maintenance obligations and costs. since the commission approved the award of the lease two weeks ago, the bay institute aquarium foundation and the partners have had the

opportunity to flesh out the opportunity and plan in further detail. and that plan, is going to be an exhibit, and it is an exhibit to the lease, and it is also an appendix to your staff report and provides additional details for the three partners plans for programming at the eco center, as required by the initial, rfp, the tenants will support, ongoing environmental education that the port funds and provides through our partnership with the recreation and parks department. and those programs have been serving well over 1,000 students each year, and generally from the san francisco k-12 schools and they also support the dream teenagers which is a program for the teenagers who live and go to school in district ten and they are interested in the service learning or the environmental issues. >> new programming, that the bay institute aquarium foundation, and they are bringing into the center

include, starting day one, the center will be opened four days a week for schedule programs and also, for park visitor to drop in. and they will be creating a community advisory committee, which will be established by the bay institute aquarium foundation, and apri, and establish and co-chair on an ongoing ba sis by the two organization and that committee will help inform the development of new programming and insure, that it is engaging the local community. and apri, is bringing one of its existing after school youth programs to the eco center, to operate out of the eco center as a home base and that after school program, helps the youth identify and apply for jobs internships and other, skill building, opportunities. and the bay institute aquarium foundation is also initiating a new weekly program at the eco center called science saturdays and science saturdays will be a

mix of volunteer opportunities to work in the park. and hands on, environmental education programs, that might be of interest to kids and families, lecture based that might be more for adults or working academics and the center will also be made available to city departments and community groups to use as meeting and assembly space. >> the bay institute aquarium foundation and the partners plans for these and other activities are documented in the operations and program plan. the bay institute aquarium foundation will report quarterly to the port, on its implementation of the plan. either the port, or the tenant may suggest revisions to the plan, in any case, the revisions will be subject to the approval by the port's

executive director or her desingee, and upon the commission's request we will hope to come back in a not too distant future and update you on our progress towards implementing the plan. and that concludes my presentation. >> so moved. >> second. >> thank you. >> any public comment? >> seeing none, commissioners? >> i notice within the mlu, that there is a termination for the rpi, and and 90 days so, if either party were to terminate, >> if either party were to terminate, that will constitute a change to the operation and program plan so the tenant, the

bay, institute will have to propose that change to the report, presumably at that time they will propose some substitution or something that would supplement the loss of that capacity. and that would be subject to port approval. >> okay, thank you. >> and then, just going through the operation's plan, i know that when this insally came forward, we talked about crafting it so it will be available for the other non-profits to use and that i missed that, but, this is just a slight reference to it but i understood it was not for any charge and i assume it is carried over in the official plan. >> that was something that we talked about two weeks ago, and that remains part of the deal, and so far, the bay institute aquarium foundation has not identified any of the programs that they are offering for which they would need to charge any sort of fees, although the lease does allow for that at

some point in the future. and that also would be subject to port approval. so it is their intent to make the eco center as widely available as possible as long as the uses are compatible. >> i was also getting to if another non-profit organization wanted to come in and that similar would fall under that. >> absolutely. >> commissioner adams? >> i would like to say thank you for all that you do diligence and as i am reading through all of this and bringing the three parties together and able to work it out. because this is a win/win situation for the xunt community and for my fellow commissioners i have made a commitment to go there myself in 26 and to see the center and understand it and hopefully some of the kids from the community will be there and i think that it is important for us as a commission to be hands on and to actually go down there and appreciate it and i appreciate your hard work and the three partners that came together and they need to know

that the commission and the port really supports this work and i think that it is a good work, thank you. >> thank you, i appreciate the comments and i am looking forward to having you out at the center to visit, and i have on say that really the credit for these three parties being able to work together as they have, is due to them, but i appreciate the comments, thank you. >> so, all in favor? >> aye, aye. >> opposed? >> it passes. >> thank you. >> thank you very much. >> item 11, new business? >> okay, commissioners, a couple of items that i have on the new business from our meeting today, one is to expand our out reach on the pilot retail program, and explain what we are going to do when we come back to you for approval on that. and two, is to analyze, and come back and report on the rate of return for that portion of the foreign trade zone fee and three is to analyze the cost and opportunities for the

pile removal. >> and pier 70. >> okay, good. >> and then, i just wanted it point out because it has been pointed out to me twice today that our meeting on april 8th is also the same day as opening day of the giants. and right now we don't have a very big agenda, but to bring to the informational item on the development and transaction, with an action item to follow there after, so that if for some reason you can't be at the meeting and you want to entertain changing meeting let us know. >> okay, thank you. >> could i just make one comment on what you said on the new business. >> i think that i just want to amend or augment, what we were talking about as far as the retail space, i think we need to make the distinction of bringing in an lbe as opposed to a start up company and a

small business, the space itself is not going to allow, and i don't think that it will be interested and it is not big enough to attract somebody that is of the size and i think that we need to make a distinction between a company that is small, and it has been operating verses someone someone who is trying to get go as a start up but i don't think what the intent was but i would be concerned if the intent was to encourage a start up lbe which is different than trying to get an lbe that has some experience into the site. >> i think that as a understand it, the way that it is written, they already have to have, i think that it is three years of ongoing percent so that addresses and it would not be start ups but they will be businesses that have already been operating and functions and giving them an opportunity to come to the port property. >> which i think that i 100 percent support and since we emphasized the component and the technical assistance, it