generators that we needed, exciters for our power generation, go solar, street slights and all our facilities because the fact is we would have to borrow money at 6 percent. >> can i pause you right there? you mentioned you had to do. these are the reserves the board of supervisors had set up and you should be coming back to the board of supervisors to ask for that and i'm actually kind of surprised to be hearing about it here when there's plenty of time to talk about it earlier, including our last meeting where barbara hill from your power department came and presented to us. what's your response? >> this is -- in talking with the mayor's office, this is the proposed -- >> the board clean power sf. >> well, it is the mayor's budget that he's presenting to you that you'll have time to

comment on. >> okay. we'll have plenty of time to talk about it, but i'm not likely to approve a budget for public utility commission that has swiped our reserve for a clean power, community choice aggregation program. we can talk about -- i know that the entire reserve of 19.5 million might not go towards the clean power program or cca, but there are other parts of it, but it might be good to come with us with a different scenarios for how that money can be appropriated and not talken, but to actually come here to committee and say we're going to reprogram cca dollars when there have been eight votes on the board of supervisors, maybe more, who have set up this reserve for

clean power, it's actually kind of offensive. >> first of all, i definitely apologize, but we're working with the mayor's office. we ran over 100 different scenarios of how we can bring our power enterprise into balance, so this is something in the last day or so we talked about and i would like to -- you know, i'm hear to here to give you what's in his budget that he plans to submit tomorrow. >> just based on the responses that we received in our questions about the mayor's support or lack of support for clean power sf, i don't really have a lot of faith in the answers i'm going to get. i e don't believe there was any real deep thinking or analysis. it was all just political arguments that we received and you can tell me a lot of things and it'll be an argument that i'm going -- again, unless you can give me something really

detailed about why you cannot keep a reserve for a priority that the board of supervisors had sat and worked on for over 12 years. >> we can definitely work with you and talk to you more about it. i understand what the board feels about that money that we put in reserve when considering it, one one of the considerations i'll put out that, when you have money in reserve, it is collecting interest at half a percent and we're borrowing money for 6 percent and so we should have a conversation. maybe there's a way when it goes that we make the money available, but sitting there collecting no interest when we are borrowing money at 6 percent, that was one of the bases behind it, but willing to work with you to talk about ways that if something happens, how do we execute and get that

money. >> i know you said you talked about it for the first time i a couple days ago. i've been contemplating that this was going to happen for months now. i'm sure you've been con tell mating e contemplating about this for months now as well and there hasn't been that discussion. please come back with different scenarios about how much you'd like to take and what you'd do with the funds, how they'll be spread around. >> will do. so the only thick i thing i want to point out is that we actually presented fully funding or leading the cca in place. we had dlsh $5 million in street lights, $2 million in go so solar and we had a cliff. and we're looking to work with the mayor's office to increase

the general fund and so that happened in that discussion, but i hear what you are saying and we will work with you to come back with a more detailed plan. >> mr. kelly, i know you're usually really good and your staff are really good at giving us heads up on lots of issues as they come forward, but i feel totally blind sided by this one. i know as supervisor breed, avalos and i were sitting in the meeting last week, there were so many opportunities to raise what was coming down the road on this and i sure would like to look at and con consider would lead to more of a clean energy future for our communities, but this is upsetting to me as well. i'm looking forward to hearing the alternatives. >> dually noted.

beyond the two year budget, there still is a problem that we're facing with the power enterprise and so we will be working with all of you, not only on the cca as it relates to the power or go solar or energy efficiency, but there is a great need of hooking looking at bringing more customers as supervisor wean iener talked about, get more full paying customers and also we need the ability to be able to debt finance some of our projects and also we need to do more in looking at asset management so we can look and be smart about deferring and cutting canal ting capital

projects. one of the key factors is we are currently in negotiations with a new agreement with pge. we have an interconnection agreement that expires in 2015 and if we are able to continue a deal, we would minimize the impact to the power enterprise and also we are in the process of reevaluating mountain tunnel, so we are trying all the things we can do so that we will have a power enterprise that is financially in balance. that's one of our biggest challenges that we have before us. >> mr. kelly, can i ask another question about -- i think it's a slide that went back to the cuts and deferrals and it says that -- i think it's 30 million cuts to go solar, but i'm reading a recent posting from

the mayor's office that he announced full funding for go solar sf in celebrating the installation of the new solar array at davie symphony hall, but i'm wondering if you can talk more about go solar and how the full funding is going to happen. >> one of the things in the mayor's budget is that he, by looking at the increase of the general fund money, also looking at the cca and so we had to invest in our capital projects, we had to look at street lights, we had to look at solar, which he wanted at fully funded and so we use all those resources to actually fund go solar and also, the street lights and capital -- essential capital programs, but based on the conversations that we had today, i think we

will work more closely with you to sew see what that hooks looks like. i want to thank you for your time today. i do apologize for the sudden shock of cca, but we've been work wg the mayor's office again and we had many scenarios we were running and so i felt i had to come today and let you know what the final plan was. >> okay. supervisor breed. >> so the -- so you don't necessarily have any alternative proposals, other than to reprogram the cca reserves? >> well, the board has passed a resolution to look at joining

marin and so -- and in order to do that we would have to fund a feasibility study, which we will need money to actually do that with some con tib tingency just in case we decide to join marin. >> we approve your budget though so if you're saying we leave money it's, like, we would leave the money. >> well, semantics, you know, so yes, you are an approval body, this is the mayor's budget, it is our department that has the money so everyone has involvement in it. and so what i was sharing with you was highlight of what the mayor's going to present in his budget tomorrow. >> so the mayor's going to present reprogramming some of the reserves that we, as a

board have put on reserve. >> that is correct as i understand it. >> so two things have happened since you received the cca appropriation. the first thing is that we will be confronted with having to issue the first power revenue bonds since we built the system. also the world changing so far as richmond, our neighbors across the bay were able to get a deal with marin clean energy because of the experience they had. that was a no money down, no reserve requirement except for a feasibility and customer assessment. so the energy markets have gotten more comfortable with ccas and so i know you're considering before this body and the budget analyst is reviewing fiscal impact right now of a direction by your body to have us do that

consideration of feasibility work with a partnering with marin. if that were the case, we would do our best efforts to try to get as good of terms if the cca partnership with marin were similar to that of richmond. that didn't require the money down and so -- >> and i do appreciate that, but i just don't think that a conversation about the cca reserves should be happening within the context of the overall budget. i think that should be a separate conversation. if there's a desire to reprogram cca funds that should be brought to us separately and not within the context of the budget. i wouldn't be supportive of this budget that reallocated cca money and i want to make sure you understand that and i would prefer that conversation be completely separate. until we have something on the table to support cca and some clarity around what we're going to need to spend, i'm just not on the same page as what p ec

and the mayor thinks on this particular issue and i want to make sure you know that. thank you. >> any further questions? supervisor avalos. >> just wondering if there were any other options available from taking funds from cc a a reserve? >> the other option is a larger rate increase for the general fund. or more cuts, potentially lay offs in the event they kind of big if picture for a moment, in water and sewer we have rates and charges that cover costs. for our third enterprise power, we don't have that same issue. in fact, our key customers, and luckily we've been able to do

this historically -- our key customers, the general hospital, street lights that benefit everybody, those costs are not being fully paid and so that's what's happening and so going back to supervisor wiener, is this a sustainable operation? yes, you bet it is, if we have rates that cover costs and in fact, it's an amazing system that has really served san francisco well, but with this one enterprise of our three, we have to make those choices because rates currently don't cover costs. >> and what is that -- how does that impact our budget elsewhere? >> it's pretty significant so for every penny, that's revenue generated for about 0.3 hours per kilowatt hour. that's assumed one penny of additional one penny next year, but that's not even enough to

cover costs we incur now. to the degree, you know, and additional penny were offered as an alternative, that would be an worth an additional $3.4 million to the pec. that means the budgets you see at the general hospital and the mta and other general fund departments, including street light costs, would go up on your general fund, part of the budget. >> what pobltd is there possibility is there to renegotiate the 55 /45 split between power and water for the tunnel? >> one of the things we are actually -- we've done some research and we are seeing the -- sort of the -- what was

behind that split. you're talking about that in our water and power, we have facilities that are joined -- they convey water, but also generate power, and 55 percent of that asset is funded by our power enterprise and 45 is of water. and mountain tunnel, which is $519 million in need of infrastructure repairs and 55 percent is power, and so the question is that we need to -- >> if we program can we renegotiate the different splits, because clearly the volume that comes out of the tunnel is greater volume even by dollar is for water, not for power. so it seems like power's covering greater part of -- >> that's something we're going to talk to our customers, but as we bring it up, they mention that we want to talk about all the facilities then because

they feel that maybe some of the facilities should be all power and not water, so they want to bring it all on the table at that time, so we've had conversations and we're doing some research about, you know, all the facilities and what that impact will be. >> so as a question i have is related to how we can cover the costs, the feasibility sfud di study for marin energy because we have cca funds in las koe, i believe. it doesn't necessarily have to come from the reserve. it's not even a lot of money either. >> yeah, it's not. >> okay, thanks. >> anybody else, any other questions right now, comments? okay, thak thank you for being here. at this time we'll open this item up to public comment. if anyone wishes to comment on

item number one. walter, thank you for being here. >> good to be here. [singing]

[singing} >> you call item two please? >> item number two. here to receive and update on the report of san francisco's budget, 2014 and 15 and 2015, 16. >> thank you. we have from the port, thank you for being with us. if you could indulge me for just a second, i will find -- hopefully find -- good

afternoon. monique from the port of san francisco. thank you for the opportunity to talk about the port today. i'm accompanied by the port's staff as well, not the whole gam mutt, but i will rely on them for questions. i really appreciate the opportunity to set the context for the port's budget because i think the port struggles from an identity crisis. we are best known for our land use debates, but we really do a lot more for the community than to talk about just land use. i think it's important to realize that because that's where our budget comes from and that's where our budget goes. and so having said that, i want to point out that we are a

port. we're also a water front. we're much envied for being able to be both. we're not behind fences, as other ports around the world are. one of the things we do for the city that's probably of the most value is our historic sea wall so i'll talk about that in a little bit. just to do a quick refresher, the port's mission is codified in law and we have a couple at attributes that date back to our founding in 1860s. the first is to promote te merry time and the fourth is to be a self supporting enterprise, which we have been since inception, even when we were a state agency. today the port is a diverse tenant mix of uses.

the historical uses are very much still there. we've been able to capital ize not only on the city's tourism industry, but on our great location on san francisco bay and our a jay sen location to the pacific ocean. one of our greatest missions was to based on just 2013 alone i would say that we are fairly reunited with the city. today the water front is teaming with school kids going to explore tore yum, as well as kids coming out to enjoy the sunshine for lunch and visitors out on the bay. opening day on the bay was this past weekend so we have sailboats out again. we're also still a transportation entity and we see how that has gained importance in the last couple years. we're very much trying to

create and receive sustain self sustain our property and not have us isolated behind buffer zones. with respect to the maritime attributes, but we don't do oil, we don't do automobiles and we do very few containers, but we do everything else, including ing support the other five ports in the bay with our harbor fish is a big part of our operations. 90 percent of all fish in san francisco comes through our port. 40 percent of that comes through our local fisherman and what's coming into the port comes in on an 80/20 percent. the ferry network is extremely important to us.

this goes back to the beginning of time with the port. we saw how important it is during the bart strikes and the bay bridge wshg that has been done. nine million passengers are traveling by ferry per year. it's split almost half between the commuter ferries, which are shown on this slide. there are seven lines, six are shown here, and the other half are attractions going out to al ka traz or sailing around the bay, so part of our robust tourism industry. one of the things people don't know is the port has two water tax' i operators. the first has been in business now almost two years and the second water taxi operator just launched his service and he's featured here in the lower picture and you'll be seeing him through the summer months. you'll be able to hop on, hop off, go from the ballpark, all the way up into aquatic park.

>> what are the spots that the water taxi service serves. >> that's a great question, thank you. there are three main spots that are served. first one is pier 1.5, is second is down at pier 40 adjacent to the ballpark and the third is in fisherman's war f. with each of the development projects we look at along the water front, that remains one of the attributes is water transportation. >> where are we at with the al ka traz? >> they're getting ready to

[inaudible] by the end of the calendar year. i think they might be a little off of that schedule. my understanding is that they will show a san francisco port site as their preferred alternative, but they are still studying the fort mason site. >> okay. >> we're watching it carefully, and i will be calling you. >> please do. >> you can see the bump up here in the 12, 13 fiscal year. that had to do directly with the bay bridge. we'll see another bump up in the current fiscal year. the bulk of the ferry passengers who are commuting are going to marin county with a small portion going over to alameda, which is the orange and darker blue at the bottom and then up to vallejo. a new service has started now going to south san francisco so it goes south san francisco and then next year we'll see the

impacts of that service. passenger crews remain a big part of our business, it goes all the way back to the gold rush when the united states built their first ship, it turned into a passenger ship to bring people to san francisco for the gold rush so it was a very long sector for us. we are if perfectly positioned for it within the bay. we are a little by geographically challenged within the pacific ocean and the state of california, but nonetheless, crews calls is growing fairly rapidly just in time for opening up the new cruise terminal which is in september. ship repair is also a very big piz. it goes back to the gold rush. most everything was made from relics of vessels back in the 1800s, including i ing equipment for the gold rush and of course ship repair and building has been a robust trade, also a big employs

people in 22 different trades. they operate at about the same number of ftes as the port and they support all six of the ports and the bay. and then we've been growing pretty rapidly -- >> just a question on -- as baa system, is that own by the port? the actual facilities are port facilities? >> yes, yes, and no. the ba system ship repair is the current operator. they have a lease from the port. the land they are on is port property and the dry docks they use belongs to the port, but the rest of the equipment is theirs. >> and is there any room for increasing this industry in the port? >> in terms of footprints? >> in terms of footprint, in

terms of where you can actually create more facilities for ship repair. ir. >> there's ship repair at pier 7d. they occupy 14 acres. they are in the process of a master plan that will align itself with the rest of our pier 70 master plan. you'll recall we have a development project there. there's not a lot of expansion room that's desired. they have a lot of space they're not fully utilizing, but there's several other smaller boat works along the port, one adjacent to the ramp restaurant. it's the oldest ship repair operator in the bay. we haven't had anybody really wanting to come and build out a new boat yard. in fact, unfortunately with the move of the warriors to mission bay, i've had several people if

i'd like to relocate the boat works, which the answer is no. so interesting question, but i haven't heard of anyone wanting to do that. the most i hear of usually is folks interested in developing new marinas so that's not impossible, but something we'd have to look at really carefully. >> then pier 70 with its dry docks is more or less an a nomaly for the rest of the port? >> with the big dry docks, yes. it's an anomaly for the rest of the state as well. our dry dock is the largest in all of the west coast of the north americas, which allows the bigger vessels to service the pacific ocean. there isn't anything quite like it until you go up to victoria where they have a bit smaller one, or san diego. >> this seems like an asset that can be built on. i don't know. has