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 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