july of next year. sorry. ~ >> okay. since you're here, next question is, so, this is a form of lottery, there are a couple ways to do it, but this is the form of lottery the developer actually running the lottery and there are preferences for certificate of preference holders. but i wonder what is the role of the mayor's office of housing in reaching out to certificate of preference holders? i won't necessarily speak to how the lottery is structured because, again, there's only so many ways to do a lottery once you have the numbers or however you're doing it. but how are you going to make sure that certificate holders in the right order are -- their names are entered properly rather than just having an open portal for none? ~ anyone? >> no, yeah, we have very complex and simple at the same time procedures of about the certificate of preference lotteries. we have staff that monitor,

work with the developers and actually monitor that lottery and ellis act housing preference act lottery will come into play with these units as well. and, so, we are hands on working. we attend the lottery to ensure that the certificate of preference lottery is being done. we also -- we do do -- the developer will have to reach out to or actually finance our reaching out to the certificate of preference holders that we have. and when we do reach out to them, we ask them to contact us if they're intending to apply for a unit so we can make sure we're really working with them. so, when we see the list that comes back from the developer about who is in the lottery, we know who has been -- who intended to apply. if they're not on that list

then we make sure they are if they want to be. >> okay. now, i'm happy -- i'm sorry, [speaker not understood], i apologize. if you feel like you need to, please come up. i'm going to ask you another question. it's been a few days? >> yeah. >> so, apologies if you haven't gotten to this part yet [speaker not understood]. the first thing is the ellis act, that's different than certificate of preference, right? how do i phrase this question? i guess -- first of all, everything you said that's not in the vertical dda, so, where is that covered -- >> it's in the cop [speaker not understood]. it's in the amendment to the ordinance that was done in 2008, that any opportunity that becomes available -- any

affordable housing opportunity that the city or the agency has financing followed those rules. >> of the developer having to work with you to reach out to certificate holders and everything you just said? >> um-hm. >> my interpretation of that. >> okay. >> okay. well, i think that's something maybe for staff to follow-up on because i don't necessarily want to hold up the process. we looked at block 49, this project a lot because my commentary is not necessarily on block 49, but we've spoken repeatedly in this commission about marketing and preferences and wherever we can get clarity is better especially since now the certificate of preference program is technically under the mayor's office of housing which is why you lovely women are standing before us. so, but it's very vague in here how the certificate of preference

program coincides with the marketing opportunities for block 49. in fact, it actually says the agency, us, are supposed to do things without certificate of preference marketing. but it's not our program any more. two things. one, [speaker not understood]. and the other thing is i would just be very careful about lumping programs in together because, you know, the certificate of preference program has a long history with redevelopment projects. i know ellis act has come up in the news a lot lately, but that's a different story. so, i just want to make sure that there is taylored outreach

to the different populations and it's not all sort of together ~. >> absolutely, absolutely understood. let me make that very clear. the certificate of preference program still and will, as long as it's in existence, have the top preference and priority and that is the only preference program that we have that -- where the developer is required to reach out to those or is required. so, with the ellis act housing, there is no requirement to reach out to people who have been evicted because of the ellis act. the requirement, the cop program certificate holders still have -- there's three units in a development that are available and three certificate of preference folks want those three units, they're going to the certificate of preference -- >> okay. sorry to keep everyone -- >> no, okay. >> just the last thing i would say is on the digital methods

of reaching out. i know that's what the mayor's office of housing is doing in terms of building the portal and presumably it will be done before the block 49 lottery july 2015. >> yes. >> but i would love to see something about how digital outreach will be done in the dda, not making it necessarily a developer requirement, but every other method of outreach is prescribed, specifically called out like what newspapers you're going to reach out through, what neighborhoods. i would just like that mentioned in the same way that i would like the clarification of the connection between the developer arrow down to the mayor's office of housing for the certificate of preference program. so; i don't know, in terms of a vote today, i'm looking at executive director. i don't know that what i'm talking about constitutes a change of the agreement itself what the developer is agreeing to. so, i don't know if that could be added as recitals or if we need to adjust the agreement.

i don't want to necessarily have that whole approval because there are ongoing questions about how that's supposed to happen. so, i don't know, i'll leave that question to you. >> i think we can clarify the documents speak what you said on the record and go back and clarify the vertical lease disposition development agreement as between oci and am cal, ycd. we can also -- the ground lease will come before you and we can make sure that we vetted those for the ground lease, which would have more detail on the marketing. just the key terms were provided for in the option to ground lesion, the payment terms, the regulatory restrictions, but the full-blown negotiation and spelling out of what actually happens in the marketing plan is really in the ground lease that will come before you very shortly ~. >> that's why i was thinking if it was recital -- first of all recitals and also there are a couple kolaes in here i need you to clarify, also make sure, for example, certificate of preference program is the

authority of the agency, something to that effect and it's not really true any more. so, i want to -- i mean we can look at it later but i don't again what i'm saying here needs to prevent a vote on the document, but i think there are some changes that probably need to be made, some adjustments. any other questions or comments? from anyone? commissioner ellington. i'm sorry, i thought you were looking at me. [speaker not understood]. >> i move that. >> okay, thank you very much. is there a second? >> second. >> thank you very much. madam secretary, please call the roll. >> commission members please announce your vote when i call your name. commissioner ellington? >> aye. >> commissioner is absent. commissioner sing? >> [speaker not understood]. >> the vote is 4 ayes and one abseptember. >> thank you very much. please call the next item. >> the next item of business is

item 5d, update on the draft recognized obligation payment schedule for july 1, 2014 to december 31, 2014 (rops 14-15a). discussion. madam director. >> thank you. good afternoon to the member of the public. thank you for continuing to join us. commissioners. the rops is due, the oversight board will consider this on monday. the final date by which the successor agencies need to turn this in is about a week later in march, but due to the schedule the oversight board meeting, we will do our final mailing to the oversight board tomorrow. since you've last been updated on the rops, things have come out through the workshop, through the oversight board, and other dialogue with stakeholders as well as other city departments that might be implementers of item on the rops. and there are a couple of items that were left off and then a couple of new changes that we'd

like to present to you for your feedback. so, with that, [speaker not understood], deputy director of ocii will present those changes. >> thank you, director. good afternoon, commissioner johnson -- president johnson and fellow commissioners. again, sally orth, deputy director and i have a brief presentation to update you on some changes we've made, some of which are as a result of new information we received from the department of finance and that sort of i patctiontion how we -- the framework we think about what to reflect on the rops. ~ impacts i'm going to go over some instruction they've given us on how to accrue expenditures to various routes, and further detail how we should be thinking about the use of any reserves we've had. since we had the workshop with you on february 10th, we have also added some excess bond proceeds lines. i'll go over those details in proposed uses.

show you our current totals and where we are and go over why certain funding source totals have changed, what sort of driving those changes and again go over our next steps. so, we had a conversation with our analyst at doss last week who provided some additional insight on how we should be accruing expenditures. since the beginning of the lapse, this has long been a question that i know successor agencies and various staff at dos has struggled with the rops on a cash basis or accrual basis. we have gotten a variety of answers over the course of doing the rops. our current analyst, though, feels that it's sort of an in between cash and accrual basis and is directed us to do the following ~ has. so, basically, any payments that are made after the calendar end date of a rops period, but before you next submit to the department of finance to true up that rops

period can be accrued back to that initial rops period. so, i have an example that hopefully will make it easier to understand. for example, we're in rops 13 b which goes from january to june. but let's say you actually made the expenditure related to that item in september. what dos is telling us there is no need to show that again on rops 14, 15 a spending activity. you can treat that as if it was rops 14 b. graphickically, rops 13 14 b [speaker not understood]. we tended to think $80 spent come july 1st needed to be under [speaker not understood] to capture all our activity. now what they're saying is, well, you have up until october 1st is the next reporting due date with dos. that's when we'll do the rops 1415 b true up report, the prior period adjustment and

cash balances report in the fall rops submittal. so, really the january up to that point of when you report can be -- can be counted as the rops 13 14 period. we can accrue expenditures to that. there is no need to continue to roll those forward on rops. clean 14, 15 a makes that more streamlined and we can also report those as fully expended and there's no cash left over to then true up again. the other instructions they gave us were about reserves. so, we had already understood that the reserves column was meant for, you know, reserves you might have to meet debt service payments and then retain balances from your due diligence reviews. in particular, there were two main buckets. the balances that were approved for restricted funds, bond proceeds, federal state grants, developer fees that were restricted for certain purpose. we also had approval to retain

certain balances of unrestricted funds but were needed for an enforceable obligation. for instance, we had an approval to retain balances for alice griffith for mexican museum, african-american museum of diaspora. there were balances retained for rops 2 and 3 at the time due diligence reviews were done. what dos has said they clarified, if you have any of those balances left, you need to show that on rops 1415 a. if it's restricted or needed for enforable obligation [speaker not understood]. they instructed us if you have any money left you said you needed to hang onto for rops 2 and 3, you have the next rops period to get that out the door. we tried to incorporate that. and then the other thing they clarified is then if you had received rptts in a rops period and you encumbered that to a contract in that same rops

period, how do you show that on rops 1415 a? and they did say, well, again, if the expenditure is happening after this now longer accrual period, they did want to sort of see that activity in reserves. so, even though you will have previously reported that amount as expended because you've encumbered it to a contract, it's no longer available to be redistributed anywhere, they do sort of want to see the spending activity to show up in the reserves column. so, it's a bit of a shift on how we were thinking about the reserve column and what we rolled forward and didn't. so, that's sort of driven some changes in our rops. as i mentioned, we had new item as well. we have excess bond proceeds as well. you recall we can use excess bond proceeds now that we have a finding of completion that's one of the things we're allowed to do. if you have bond proceeds not needed for enforceable obligation you can spend it as long as it's consistent with

the original bond covenants. what we have in hand on the nonhousing side, in particular tax exempt born proceeds which have their own other set of restrictions and limitations, they need to pass the public use and private activity test. they're best suited for what i call bricks and mortar hard construction uses. so, we would need to spend those consistent with those restrictionses. you may recall on rops 13 14 b, we have two excess bond proceeds lines. we have 785,000 for the bayview opera house plaza construction work with mta and 450,000 with the mayor's office of housing and community development for their model block streetscape improvement program in bayview hunters point. and we expect that those contracts will then come before you this spring. so, we put them on the rops for the overall spending authority but then there is a process to actually enter into agreement and come before you to fulfill that agreement. so, we have about 1.1 million remaining in nonhousing tax

exempt bond proceeds that we are proposing to put on [speaker not understood] to get that expenditure authority. we're proposing a brood range of uses after conversations with various city departments that range from capital planning program, the office of economic and work force development, the invest in neighborhoods program, and other city stakeholders ~. and, so, the ideas that this provides us some flexibility to then go forth and continue to have those conversations and so when we come before you with the actual contract, it will be for a defined scope of work. but this gives an idea of possible uses. in the south of market area there's 5 $5 91,000 remaining. what we're proposing this could be for streetscape, pedestrian safety, open space or alley way improvements. in general, these are sort of unfinished business that the agency had. these are things we would have done had we not been dissolved, but we can't.

and, so, it would be great to then have these excess bond proceeds go to the appropriate city department to at least continue that work. in western addition, $83,000 remaining, potential uses can include some facade improvement or community center or cultural center improvements or repairs. it bayview hunters point there is another 34,000 remaining on rops 13 14 b and those could go for streetscape, facade improvements, pro tension improvements to the southeast health center. that is a broad category. we would further refine that to the broad scope of work and come before you for the rops 13 14 a period. so, in general, what changed since you last saw the rops? there's been ups and downs depending on the funding [speaker not understood] category. the bond proceeds have increased. and i will say again these numbers are still draft so we'll be refining up to the last moment. but as of right now these are the total and the current draft

column. the bond proceeds increased mainly because we continued to refine our estimates on how much the mission bay infrastructure utilization of those bond proceeds will be and also adding in those excess bond proceed i just referred to. on the reserve balance it went down quite a bit because we realized there were thing we were rolling over because he we thought maybe we'll spend it in july instead of june and now we don't need to do that because we can accrue it to 13 14 b, same with other funds. on the rptts, it went up again primarily for mission bay. we're just continuing to he refine what the estimates of the tax increment will be and we always like to add a cushion for supplementals that might come in or other changes. we always include language in the notes for those items that say, this is an estimate. the actual amount will depend on what's approved by the county auditor controller and what we will get distributed what's actually there. so, we just want to make sure we, you know, size that estimate appropriately.

minor adjustments on the administrative costs. and, so, all said and done, the total amount changed by about 2.3 million, little under that. so, our next steps again, we're finalizing that cash balances report and the [speaker not understood] report. one of the things the oversight board will do is consider the admin budget. we're doing a more detailed break out of that. tomorrow we plan on then mailing all of that simultaneously to both the commission and the oversight board, and then we'll have the oversight board meeting on monday, february 24th, assuming that that gets approved our practice is usually we then submit it that same day. and based on that calendar, we would expect dos initial determination back by april 10th. again, we would have five business days to meet and confer. [speaker not understood]. then june 2nd would be the rptts distributevtion for that period. so, that concludes my

presentation and i'm available for any questions or comments. thank you. >> thank you very much. is there any public comment on this item? >> i have no speaker cards, madam clerk. >> thank you very much. this is not an action item. this is for discussion. but are there any questions? >> no, you can go ahead. >> commissioner rosales. [laughter] >> okay. i just had a quick question on slide 6. these are suggestions i heard you say about these project areas, but the funds are more or less certain? >> those are the bond proceeds that remain, yes, by that project area. >> my question is on, for instance, western addition, is there room to do other kinds of community benefits like supporting businesses or business activity or commercial activity rather than infrastructure improvements? >> that difficulty of tax proceed for.

so, it's better, that sort of hard cost, brick and mortar eligible under the tax exempt usage. we went under the funding source constraints on that piece. >> okay. let me think about that. >> i'll add onto your question. so, what department have you passed off the sort of programming of those funds to? >> we've had conversations with the office of economic work force development, invest in neighborhoods, is that the correct title? invest in neighborhoods, which is the umbrella that houses every -- almost every department under the sun. public works -- >> the capital planning? >> city capital planning which is kind of an umbrella and has its own public process. and then i think as ms. worth indicated, some of the work in particular, facade improvements, streetscape, open space, really in each of these

areas really unfinished business of the agency and we stopped short two years ago and had to go through this gauntlet of reviews audits process. and only now in this new budget process and in this new rops process were we able to spend it. unlike previous bayview funds, there was a termination of a contract with mta. that was an easy one to do in our last budget cycle, but there's more flexibility with these. as long as they're tax exempt eligible use. so, the language, we wanted to give ourselves some head room and specificity for our oversight board. what are the kinds of projects that are eligible in each of these specific geographic areas? but it is including, but not limited to and really subject to more discussion and community stakeholder ictionv put. ~ input. >> so, are he we going with any city department that is doing this type of work, or how are

we -- how do we come up with the general scope of work for these projects? >> well, i think through the budget process also, we will need to include this in our budget and other city departments will need to put that in their budget as well. so, we'll need to be working to make a proposal and you'll see it on your side as we propose it in the budget. this is what we want to do, similarly on their side. so, further, this is not to restrict it to any city department. this gives us -- this is sort of a place holder to give us the expenditure authority and we need to do the next steps which would be to sort of identify what department is the most appropriate department. >> just a follow-up, the department of finance has not put any other kind of special instructions on this other than it has to go to capital improvements? >> that's just a tax exempt bond restriction for any tax exempt bob proceed. the department of finance restrictions, i think it does mention it needs to be

consistent with the original bond covenants which we would have to do anyway because we can't violate the bond covenants. those were tied more to you can't do it until you get your finding of completion which we got at the end this last fiscal year. so, we didn't sort of have it ready to go toed up. we got the first tranche out there with the first items on 13 14 b and now this is ~ closing out those remaining nonhousing excess bond proceeds. >> gotcha. >> again, i'm fixated on western addition. would we be able to, for instance, use this amount of money which is not a lot, 83,000, along with perhaps city monies to help improve lower fillmore on the street side? like, you know, if the city came up with some sort of branding type campaign, i know he the invest in neighborhoods division of the mayor's office

continuously receives grant proposals or requests -- issues requests for proposals for grant ideas that include branding or marketing campaigns that may have improvements on the street side, you know, improving -- basically the look of the neighborhood, if you will, to incentivize more foot traffic, those kinds of things? >> well, we have a potential use facade improvement. yes, so, that's something that we can discuss with whichever is the right city department who might have access to other city funds to partner with them. these funds can be used to maybe leverage other fund, but -- >> facade, not necessarily meaning -- >> usually upper ground floor facade, improvements where we have done similar programs in the past. the city has the s.f. shines program, for instance, which is again store front facade type of improvements. >> i see. >> through the chair, let's say

invest in neighborhoods, which is the umbrella with oewd, city administrator, they may fund a marketing campaign and consultant, but our funds could leverage that with a look and feel. you can visibly touch the sign on -- the awning improvement on the business or new paint. so, our dollars, these tax exempt dollars couldn't fund a marketing campaign. that's something the public could enjoy, not tenant improvements, not on the inside. >> right. >> within a restaurant, but be outside of a building. so, that's what's meant by facade. that's where we think, yes, i think you're right, 83,000 isn't a lot, but to the extent it can leverage other city programs to really make a dent in a corridor, a commercial corridor -- >> if it's faceless. >> would be a good use of funds. >> excellent. >> okay. i have a real quick question on the structure of the rops themselves. so, i understand what you're

saying about the change dos has requested in terms of how you think about reserves and encumbered funds. but when i look at the spreadsheet that we all have to now look at every six months, there's still only one column for reserves. so, how is that not confusing -- >> i can't say that it's not confusing. i think it means that he we will have a number of, you know, tracking spreadsheets to help us keep track, but the idea is that what shows up in terms of spending activity, when we look at 1415 a, if we're showing it on there really it's because it's either a new item, it wasn't on rops 13 14 b, or it was on rops 13 14 b, but it's expenditure activity that's going to take place after, say, october 1st if we use that as our cutoff point ~. we typically submit ours a week

earlier so mid september would be when we report. we'd have up to then to incur it. that's why when we look at the rops and we look at those reserves, we're saying this is for activity that's going to go october through then february of the next -- it's sort of the rops 1415 a accrual period. that's how they want to see the activity on the rops detail tab, but on the cash balances and on the prior period adjustment, if you -- they want to see that as if it's fully expended because the idea of the rops is when they want to true up, they want to shake loose any tax increment that wasn't contracted for and then, you know, sort of throw that back, you apply it against your next -- the credit against your next request, right. and, so, they're basically saying you can go -- even though you might still be paying out invoices against that contract, you can count it as fully expended because it's not available to be trued up and redistributed.

so, we are going to have a difference between the cash balances and prior period adjustment [speaker not understood] 100% expended but then still continue to show the activity really with their term, they think of it as we're just requesting authority to access our reserves [speaker not understood]. >> no, i think -- and i apologize. because i think my question -- the answer to it doesn't really matter to us, right? i think my question is how are they going to be able to tell that, right? i'm looking at two periods, i don't know how they're going to be able to true up anything with the way that they're defining reserves because it has a couple different definitions now. but i think -- no disrespect, i think that maybe thinking about it, that question i asked is not -- i don't know that the answer is for us to be concerned about. so, i okay. >> i would further say that each ropsio