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 the port spent time

addressing or researching? >> we partnered a lot with bae over the years and you can see the growth in the slide representing that. when the navy moved away from the bay, ship repair took a nose dive as you can imagine, particularly at the big sites. the sf boat works and then competing smaller boat facilities in alameda. they have a constant because of the smaller vessel traffic in the bay, but the big ship industry has been impacted. we've bandage working a lot been working a lot with bae so they could compete for the bigger ships that are coming out of the cruise industry and the cargo industry. as you may recall as part of our america's cup project, we invested in shore side power at pier 70, which has also enabled bae to be a stronger

contender for bidding and they've won quite a few contracts that way. their volume is going up. there's still plenty of capacity to run the ship repair yard more and create more jobs and that's where we focus the port's attention. >> is there a direct link between the ship repair hang and city build? >> yeah. >> we're building that pineline? pipeline? the age of the workers was pretty high. the age was around 50, 51, and seems like it'd be a good job to do some turnover. >> yeah, they're partnering with city build directly, not with the port, but directly and something we look at a lot. it is so many different crafts. to your point, it's really good and desirable work and i think it gets bid on a lot at the

hiring hall. >> supervisor mar. >> yeah, i know you have a number of slides, but i wanted to is you about the cruise ship industry. i know mr. benson's before with us before with the shore side power implementation management district, but it sounds like with the america's cup delays that shore side power, it's being completed to hopefully increase the number of cruise ship visits and our share of the industry. i'm just wondering if you could talk a little bit about the projections of the increase in the cruise ship visits to the city. >> yes, thank you. i thought i had a slide on that. maybe not. oh here we go. so as you can see, if you go back to slide -- i think it's nine there -- sorry, eight. we've been seeing tremendous growth in the cruise business over the last five years. that's a number of different reasons. the cruise industry is highly

elastic. they bill themselves as movable hotels and go where the demand is. a couple things have happened that have a you throwed our business to grow. first and foremost the bigger ships can be handled on the ocean because of the ship repair and we've seen ships being moved from mexico up the coast in san francisco. that's a great change in the business. we remain a very desirable location. there are some federal laws that impinge upon our ability to be served as well as the passengers would like, but we also are growing the business in terms of building a new cruise sip terminal ship terminal. the terminal we have right now was built in 1918. it served bumming d bulk so the nerm terminal will help with

that. we're seeing a good growth. we're going to have a record year. the cruise industry counts itself by calendar so 2013 was a banner year for us. 2014 is booked even more. i think it's 87 cruise calls already booked for 2015. >> who were the main regional competitors with us? long beach and san diego or what are the main competitors? i'm guessing if we're increasing we're pulling them away from our competitors. >> historically san francisco served the alaska market in the summer months and the mexican market in the winter months. you'll see in october and may a lot of ships here as they're repositioning from north to south, so seattle, vancouver, victoria remain the biggest competitors mexico is just

because of all the problems they've had has not been very desirable so the cruise ship companies have had to create new i itineraries. we've been benefitted those. we've been seeing something called coast wide cruises where cruises are going los angeles, santa barbara, san francisco, back down to ensana da, and then back up into los angeles and those are seven day cruises and they're very popular. we're hoping as mexico starts to come back that we can hold on to the -- wu but we did cannibalize because san diego has been hit the hardest. in terms of parks, this is what's makes our port really

unique. we have 86 acres of open space right now with 28 acres planned. to give you an idea of how much that is, that means one out of every 5.5 acres of port property is open space or parkland. that is a stunning amount of parkland and it's part of the transition of the port. in the next two years we'll be moving [inaudible] and bay front park as well as the blue-greenway network. and the blue-greenway network is really moving along on the water water front side seems to be the main driver and it seems to give the san francisco me peninsula to have something as cool as new york.

the goal is, as you walk along the port's property, every seven minutes of walking you come to a place where you can pause actively depending on the type of park . in august we will be opening up a new 2.5 acre park at pier 27. this is long a waited and we're very excited about that. the other thing we've been able to do is to promote our environmental at [inaudible] head park was a vision that got off the ground probably ten years ago and it keeps growing. we were able to augment the park with a dog run and more street scape. we've just hired a new operator for the living classroom known as the ecocenter and it's a great collaboration, not just of operators, but also users. more excitement on that front to come. so key priorities for the port

-- we are home to about 500 leases, more or less, a multitude of small businesses are at the park, many of them are sole proprietorships, a very important place for them to be able to stay in san francisco, as well as to light and heavy industrial. with the eastern neighborhood plan, more and more of that area is dependent on the port plan. we also obviously have very old infrastructure. i've heard a couple times in mr. kelly's presentation about how old you see infrastructure is, ours is equally old. many of these -- most everything was built in the late 1800s to the 1900s. it was pretty much all done by the time world war ii was date done. sea level is obviously something we're participating in as a regional program and

then it's always a challenge to stay fie nanl nancially stable. we've had the challenge doing that ever since so it's our goal always to make sure that we never need to rely on the general fund. i just want to pause very briefly and talk to you about the seawall. this was designed by a state engineer in the 1860s. it gain being built in the 1880s and has been there ever since. you can see on this, if you look, the white on the outer edge represents all the areas of the city that have been filled. the very top under the word seawall is of course the marina area and fort mesa and when you come around the bend you can spot aquatic park down to the creek. of note is the cove downtown was filled by the time the

port was established and that's when this map was created, but as you probably know, the cove waters go all the way to mont gomery and california street, so there's a lot of property dependent on the seawall. mission bay was rather sizable going all the way to the 280 extension. we have in our money to begin a robust study of the sea wall. our seawall particularly in the downtown area protects a number of very important assets of other city departments as well as bart and other agencies around the bay so this is a high priority for the port going forward. our capital plan remains probably as big as any departments. what you'd expect for an entity that is 150 years old. we continue to be as creative as we possibly can to find ways to fund improve ments in state

of good repair just to keep the port operating and self sufficient. our capital plan for the amount of money we need to stay in our current state of operation is about 1.6 billion and we've identified just under 1 billion in potential funds. about half of that comes from the port itself and half of that comes from external partners which i'll talk about in a moment. in the last five years we've been lucky to survive is recession fairly well. if you look at the blue line you'll see it was flat coming out of 2007 to 2010 and then we started to have some incremental growth so most of the growth numbers you see here really occurred in the last three years. we worked very hard to curtail spending in 2011 and 2012, so much of our revenues are dependent on percentage rents. it's hard to predict where those will go so we rise and fall quickly with the state of the economy, unlike a tax

backed entity where taxes lag. and we've been trying to invest as much about it as we can into capital. we've been able to invest $187 million into capital the last five years, 65 million of that was from the explore tore yum. itorium. very quickly in ferms of mandates of the board, we are working hard to support the lde and local hire mandates. we've been very well on local hire as well as on lbe. we aufr three types of

contracts generally and all of them are performing well above the allowances set by the contract monitoring division so we're prout of that. in terms of our capital plan funding comes, as i mentioned earlier, from port contributions and assets so that's a combination of operations and debt. and the external as we can. and other types of sources, but we still have a fairly sizable gap in being able to fund our ten year capital needs. of this funding source is spread out over ten years. it's not money necessarily available for today and has a high probability of being available to us, but things change fairly rapidly. we work hard all the time to make sure we're financially

stable. our budget proposal meets these policies and again, we are just very mindful of the trade off between or operating expensens and our capital investment and we're doing our best to program those effectively. all of our forecasts show us having to make did fficult decisions in the sense that operating expenses continue to grow faster than operating resources for capital so we're watching that very closely but we've been successful to date. >> do you mind going back a couple pages? >> not at all. >> just briefly the lbe stuff, in every case you've been able to go over your goals? >> yes. so we do three types of contracts; construction, professional services and then three as needed pools. one is for engineering, one for environment and one for real

estate economic. not every contract has exceeded its goals. to be candid we have a hard time with drudging, but we've been exceeding our goals. >> well, great, that's good to see that -- >> we're proud of that. we're not a very big department. this is not a lot of dollars going out the door, but we're working hard to make sure they're fulfilling your policies. i think that concludes my report. >> okay, thank you. any questions right now? thank you for being with us. >> thank you for having us. >> okay. we will open this up to public comment. does anybody wish to comment on item number 2? please step forward.

[singing]

>> thank you walter. >> i' been working on port projects for many years now. i just want to point out that in the discussion of the capital plan and the kind of deficits the port is looking at, the two big potential public private par ner ships we're trying to get done, pier 707 and seawall lot, a lot of the benefits, long term benefits for the port won't really even enter that capital plan yet because they're outside the ten year window. they are really critical for looking at the long range success of the port and their

abilities to sur vive. i think the port has done a pretty amazing job of getting things done in terms of parks, open space, rehabbing some his toric piers and they really need your support. thank you. >> thank you. any other member of the public wish to comment on item number 2? seeing none, public comment is closed. have a motion to continue this item to the call of the chair. >> can i just -- i wanted to thank monique and brad benson and the staff for helping me see the dilapidated piers from land and from sea and understanding important long term projects like pier 70 and mission rock and others as well, and i really appreciate the community input that you try to take into consideration as you're managing quite a bit of very valuable property, but

i'm appreciative of being able to see it firsthand and for keeping my office informed of the developments that go on with the complex projects you have. thank you for the presentation as well. >> okay. thanks as well. colleagues, can we continue this item to the cal of the chair? we have a motion? we can take without objection. thank you very much. madam clerk can you call item number 3. >> [inaudible] 460,000 in department operating to support the department's projecting increases in [inaudible]. >> thank you. i'm the chief financial officer for the department of emergency management. before you today is [inaudible] to allow for us to offset overtime deficits projected in the current year.

the department has already set aside salary savings as well as safings from workers services to a account for this deficit. we worked with the harvey rose office the last week to address questions and we're happy to answer questions you may have. any questions you may have now? >> can you go to your rourt please on item 3? >> yes mr. chairman, and members of the committee. on page 3 of our report as shown in table 2, the total projected 13, 14 over time deficit is $420,993 and on the top of page 4, we point out that because the department has a projected 13, 14 year end surplus in mandatory fringe benefits of approximately 1 million, we've requested a mandatory fringe benefit cost is not needed so our

recommendations on the bottom of page for are that you recommend the proposed ordinance to reduce the requested amount to 429,993 and return the funds to the general fund bald lance and you approve the proposed ordinance as amended. a: thank you. i understand dm's in agreement? >> yes, absolutely. >> thank you. i understand dm's in agreement? >> yes, absolutely. >> anybody wish to make public comment? seeing none, it is closed. and then the underlying as amended, motion by supervisor breed, we can take that also without objection. >> i would like to request that the department submit the amended ordinance before 9:00 am tomorrow morning. >> we can do that, thank you. >> can you call item number 4?

rjts it's a resolution consenting to the transfer to [inaudible] mission bay south area to the regions of the university of california as a tax exempt entity for the future development up to 5,000 [inaudible] and making [inaudible] findings under the california environmental quality act. >> okay. thank you very much -- is it tiffany, whoever's presenting, come on up. thanks for being here and talking on this item. >> good afternoon, i'm a development specialist with ocii. i'll tart the presentation giving you ton text tabt site. as you can see on the slide

it's outlined in red located in mix bay south on third street from ucsf current campus. it's about 4 acres and owned by affiliated sales force.com. as you know the item before you for consideration is the city's consent to the transfer of lot 33 and 34 in the south to the uc regions, a tax exempt entity as required by section 14.7 of the mission bay south owner participation agreement. the next slide gives you a quick overview of the framework that governs development in mission bay south. the south governed by the south redevelopment plan, the south owner participation agreement with fossil, the mast er developer. ocii's [inaudible].

obligated to reimburse fossil for infrastructure using tax increments. ocii is also required to use 0 percent 20 percent of tax increments generated in the south. this next slide touches on dissolution law. oci can only continue to implement enforceable obligations, in this case affordable housing and infrastructure under the south opa and south redevelopment plan. as you know ucsf is now under contract to purchase lots 33 and 34 from sales force. as a state agency uc is exempt from paying local property taxes, however, uc is still subject to third-party contractual obligations such as

the south opa. section 14.7 of the south opa problem hints the prohibits the transfer of property to a tax exempt entity without the consent of ocii and the city to transfer without such an agreement in place. the primary intent of this section 14.7 was to ensure that the ability to fund construction of the infrastructure and affordable housing required under the south opa was not negatively impacted by the purchase or leasing of property by tax exempt. blocks 33 and 34 are currently subject to a pilot agreement which requires a tax exempt entity to make these payments in lou of property taxes and make any required cfd payments.

ieu of property taxes and make any required cfd payments. given its tax exempt status as a to make one time lump sum payments instead of annual payments over time as required by the pilot agreement. these payments are detailed in a memorandum of understanding unrelated agreements which were approved yesterday by the as follows. first an affordable housing payment which is a one time lump sum payment from uc toocii of 10.2 $10.2 million for pouzing in housing in mission bay south. this time to fossil, a payment of $21.9 million for public infrastructure in the south. in addition uc has agreed to pay the essential taxes

authorized under cfd which maintains the parks and open space and which helps public infrastructure costs. uc estimates these payments at approximately $10 million. ocii hired alh and regional economics to conduct an analysis that would have been generated by blocks 33 and 34. this [inaudible] calculation of $39.8 million is more than the 32.1 uc is proposing to pay, however there are other legal and policy considerations to take into account. as previously mentioned, redevelopment dissolution law would be the south opa, only to amendments are found to be in the best interest of the taxing

entities. approval of this transaction will provide meetly available funds for the production of housing and infrastructure in the south. this reduces the need for tax increment funds and act accelerates frees up property taxes more quickly. in addition there were a number of other benefits and considerations such as the potential consolidation of uc's other sites and uc's con tributions to the city's economy. i'd like to turn the presentation to laurie, to further detail these considerations. before i do that i'd like to note that there's a technical correction that needs to be made to the resolution. right now it erroneously refers to sf block 33 and 34. they're actually development block numbers used in the south

plan documents so we'll make that change. >> could you repeat that? >> wherever it says assessors blocks it will say 33 and 34. they're not actually assessors blocks. a: okay, thanks very much. >> good afternoon. i wanted to speak briefly to the benefits that the university is going to be general generating as a result of mission bay and this site. we are acquiring this property blocks 33 and 34 in order to consolidate existing operations at least and remote sites here in san francisco. we expect that we will be vacating in the next two years over a little less than 200,000 square feet of leased space