and somebody said we need to make sure we get these things out because we're still in an escalating market as much as it's already escalated it's not going to abate anytime soon so we really can't afford to delay getting these things to market because it's not going to get better and like the other directors mentioned i think the bidder survey i think it was excellent that we did this and i really appreciate the staff putting it out publicly sharing it with us in advance so i think the lessons are really important i absolutely concur we should have done this before i think some of the some of the things that we found are things we discussed an even a year ago my concern is that we didn't incorporate those lessons a year ago so i appreciate the commitment that we will do so now i think in

terms of the design risk and the documents and the lack of clarity of the documents and those are the things i feel like we were talking about a year ago so it's un fortunate so i hope we'll all as the entire team will be working towards implementing those and on that point, i think what we also discussed nearly a year ago is that it seemed the goals of an integrated project delivery approach didn't seem to be working in this project as well as they should be and it seems that the results of this survey bear that out at least from a potential bidder's point of view having a cmgc to

do reviews are supposed to identify things just like that so either that review wasn't catching them or the designers weren't accepting the review comments i'm not sure what's not working how we could get to a point where some of these things you are putting on the street is almost un constructible so i hope we're really taking these lessons and applying them we have a lot of work coming out in the next year and we can't afford at this point to be putting out documents that are not clear that are too complex and have unreasonable tolerances i can't emphasize enough this is the time to make sure the cmgg the designer everybody is together working on this to get clean stuff out to protect the schedule and the budget to the extent that we still can. in

terms of i guess then just kind of 2 questions i think director harper was correct the slide showing the contingencies and reserves is important i want to commend the whole team i know that's very a very difficult process what you are at this point in the process to go back so i really appreciate that it looks like there's some more potentially to come but we're taking a big chunk of the construction contingency down when we still have a lot of construction to go and we're not really necessarily counting for the un foreseen looking forward or for whatever exposure we already have my questions specifically what is our current exposure in terms

of anticipated change orders for what we have already under construction and then the second question is after we've made these adjustments going from $225 million down to 128 and it sounds like another 40 of that will go away soon so really be down to what is that 80 or ninety million total contingencies and reserves will we still be meeting the fta risk model recommended levels that this revised budget was based upon? ? >> on the pending change orders i can't show you the exact amount but between five and $8 million. >> all right so relatively little. >> little exposure is not that great but there's still exposure as far as the

contingency with the fta model we've shared our mitigation with the fta early on they told us they understood the market environment and they understand what we're doing but they would like to have a healthy contingency and 128 is probably the lowest they would like to see they did tell us in san francisco and la cost pressures some places are below normal as far as depressed markets so they understand the bidding environment in san francisco but they would like to see -- but we have to live within our means between the estimate and the budget it was one third cost reduction measures of two-thirds other sources given

that we only have $500 million remaining to award we took basically a 10 percent cost reduction looked at everything possible and there's not much left to do that would not adversely impact so. >> i appreciate that and i appreciate that at least we're not facing a possible budget increase that we're staying within the budget that we approved last year and hope that we'll be able to stay with this budget until the ribbon cutting. >> right now we've had some sessions so we're going to focus on the upcoming risks and making sure we mitigate them as best as we can so we can still keep the $50 million in program reserves i'd like to respond to one comment you made

on the challenges of the integrated team this project it's a design project whereas the foundation is being constructed while the rest of the building is being designed. we've issued -- we finished design of the mep's in late january and the main package in late april so we're finishing the design so we did that in order to go to construction as soon as possible that process is efficient in doing so it's inefficient in catching a lot of overlapping errors between packages so it makes it difficult to do that. >> thank you. >> any other comments or questions? seeing none i just want to think the team for the phase 1 construction cost estimate i think -- i don't

want to repeat what fellow board members have said but i'll just concur with a lot of the comments and feedback this is a massive project and i appreciate the immense amount of work i'm looking at reductions and improving our bids in the process and i get to see all of the planning projects in our district which i would say take up a vast majority of the city and it's certainly not slowing down so we have a lot of work ahead of us and you know a lot of that is going to come down to the management the construction management of this project so thank you. >> thank you director your comments and we're pleased we're still within the approved budget. one more thing jobs

created outside of california so for the benefit of the board we created a map that shows as of to date we've created over 3145 jobs offsite close to 3000 jobs michigan florida ark and oregon and washington so contributing to jobs across the united states and you can see the map across the screen and i'm going to pass it out so the directors can have one so that concludes my report thank you. >> at this time we'll up it up to public comment. >> good morning ladies and gentlemen. i'm jim patrick

with patrick and company in san francisco. i argued to this board gosh a year and a half ago that this joint labor agreement was a mistake because it would yield the highest cost results and i think we're seeing the implementation of that policy i was disappointed in the labor agreement which i see i see no dollars where's the money? where are we spending the money? i consider that a real shortfall we have the minimum wage argument it will ripple forward our costs i can guarantee that i believe this board needs to make a policy statement that we don't want this minimum wage thing to roll through our political environment because we're going to be buying a lot of labor and this is not a good time to have that happen. thank you. >> thank you.

>> thank you. i'll be brief the first point last month mr. reiskin asked staff to include the presentations in the packet for the benefit not just of the board but the public so appreciate that i respect ly disagree with my good friend jim patrick you are seeing here a carbon copy of what we went through in europe 30 years ago the channel tunnel and at that point the government said enough is enough we got to get down to the bottom of this figure out what the problem is and a massive report generated called the latham report there's a very good write up on wikipedia and they came up with a completely different way of doing business that's been

working very well the last 20 years the way it works is like designer built but very very special basically up to 35 percent design at that point they go to the bids and they carry on working together as they gradually bring the design up to 100 percent that's where the value engineering is working there's all the risk is shared and it worked very very well and extreme familiar with how that works ask them about the new engineering contract then take it from there. thank you. >> thank you. any other public comment on this item? >> seeing none we'll move on to regular public comment and this is for matters that are not on today's calendar.

>> correct and jim patrick would like to address on this item as well. >> so seeing no members of the public that would like to speak we'll move onto our regular calendar. >> item number 7 authorizing webcor/obayashi as the lowest responsible bidder for the bus ramps package and increasing the construction services by -- >> good morning directors here to talk about trade group package 18.1 bus ramps the basic scope of the bus ramps

essentially replaces what used to be the old bus ramp that went into the old transbay terminal goes off where the west approach starting from the left to the right and enters into the transit center a big difference from the previous loop it was pretty much a unit directal way in and out of the old terminal the major difference is starting on the left where the west approach finished there was a spur that was left so you take the fremont off ramp that's where buses today will knock that barrier off and add an extension to that and the bridge number going over harris on and also through that area at the southern end of the

project is more of a traditional box girder structure and as you get through that loop which is for functional ity that's all box girder as well as you move towards the transit center itself the whole bus ramp is 1800 feet a third of a mile that's only just a couple of a hundred feet longer than the transit center itself so it may feel very long but it's the same as the building so with that the final factor or the component of it is that the one at the far right of this facility it's the cable stay structure which now i show on this slide what's going to be going over howard street the last few hundred feet. you will see that the support

structure in the middle called a pylon is essentially if you can picture you know the train box has a curve to it at the west end as you go towards second street that pylon and foundation are just outside of where that train box is so this particular bridge has to span all the way from that train box all the way over into the where the bus deck is now the important component of that too is that the bus deck and transit center building itself cannot take a load you can not have a box girder structure that can rest on it so there's certain factors that were built into that so how you got to a cable stay kind of project so with that the bus ramp basically a summary budget 40.4 and following up in the

previous conversation this is an exact example of the design contingency of the budget at the time had 38.7 million due to seismic safety you know review committees and impacts on hinges and various design components that were incorporated after the original budget that's why there's an additional 1.7 million in design contingency as as part of the 40.4. >> prequalified bidders we prequalified 7 bidders and ultimately received five with a range of 57.2 million to 82.7 so i'm going to breakdown this table there's a lot there. at the top i show each of the bidders each of the 5 bidders

along the top and along the left column is where i'm going to breakdown the various components built into this bid and the staff expands but also want to reiterate that this was an a plus b contract a being a component that's basically a contractor's base bid and the b component is the number of working days and in the contract when we put out the bid we allow them to have a range so that they can't bid 10 days and they can't bid a thousand days it's roughly within the ballpark of what's been allocated and that's to allow the ingenuity of the contractors to set their schedule if this doesn't work with the rest of the transit projects because they are too inter laced among the contractors so you can see it

aligns on the working days column shimmick did -- the base bids i'll address those as well the base bids i'll start with were 57 million and 175 thousand $57,175,056 and i'll focus just on the numbers for shimmics they had an a item and as part of this process we also had a ve and as part of the bid they were allowed 2 weeks prior to the bid to submit proposals that could be accepted or not accepted at the time of bid and they would be utilized as part of the bid selection process so that was so we had an a plus b kind of contract and value engineering so the contractors would submit 2 weeks prior to the bid and 8

were submitted one was accepted and the various components of the ve proposals were anything from bridge type changes and grade steel changes from 60-grade to 80-grade some of them were changing piles even some were trying to change the foundation for the pylon itself which is a pile that handles the loads of that particular grade or even trying to raise tip on on on on some of the elevations and that was included in the bid selection process what happens with that number there we assigned

previously we've assigned $2,500 a day for bid selection purposes it would be a reasonable amount of a b value that would be to use in bid selection only just the 1 million the 1 million and 252 $1,252,500 is not part of their bid it's part of the bid selection process only if that makes sense but it allows you to analyze the bids in a level playing field depending on the days that they have proposed. and then on top of that the ve that was accepted by shimmick they also assigned 10 days saving so that takes 25 thousand at $2,500 a day off of their bid selection so that gets you to that the bolded line for bid selection purposes only that's the only place you will see these numbers because

when we go forward with the actual award recommendation and actual award itself you will not see those numbers because you will not actually use the b value numbers when you do your award recommendations so when you accounted for the a plus b the days the ve's that were all accepted that's where shimmick was the low bid of 57 million deeming them the apparent low bidder at this point in addition to that i'd call this a below the line bid we had part of the list that has been preapproved that would be attached to that where the contractors were to assign a dollar value in this particular case it's accent lighting on the cable structure there was only one particular on this one we asked the bidders not part

of your bid but for this particular scope would you also have a deduct and this has been one of the other components of that. and in this particular case the bid that we received from shim mick was a credit and with that value we felt it was very appropriate to take that value engineering at that point with that deduct ive alternative so before i leave the slide i'll bring you back to the upper left . that ve proposal scope was

to give you an if you are on the cable stray bridge you got the pylon in the middle you have got the various cables that go into the main pylon. for design it basically attaches the cables on either side attach right into the pylon itself what shimmick proposed was to put a saddle system that would go through we went through the seismic safety analysis of that and the engineer of record went through this and we were able to accept that one so that was the 500 thousand and the deductive alternative the accent lighting for 450 thousand so now this is how we get to the proposed award number. we accepted the

deduct alternative of the accent lighting that's how you get to the award number. as part of our analysis we looked at why the number was above the estimate and initial engineers estimates the cable stray is a unique structure it's a pylon structure requires specialized piles and it's on this particular in shimmick's package they have bencor a barrett pile is a rectangular pile it's not cased it's a

hydro mill kind of process under slur ye as they go down to bed rock of course goes into bed rocktenn feet which is approximately 200 feet down down in our location. as they go down they end up -- so it's a very unique system but it's required due to the loads and requirement for the structure and also if you didn't put a baret foundation in then you would have many many many piles with the cost analysis that the engineer of record did was this was the best foundation put in for this kind of structure so at this point the recommendation that the team behind me -- i've brought the engineer of record with me kevin clinch and i also have

the project manager with me and turner and webcore and myself and the trade package is on a critical path and the scope of work doesn't lend to anymore ve's but there are the group and shimmick has proven this i think we have a unique situation as part of this award recommendations where shimmick is building the train box and doing the above grade concrete so there's a coordination effort right where the cable stay structure and train box itself when it goes over it the cable stray structure does require temporary foundations to keep it in place and they do interface with the train box and it's recommended very well

for shimmick. >> i was just going to ask if there's any comments or questions from board members on this item. >> i think it was a great report and i'd be ready to move approval i just want to commend the staff for including a ve process and having deduct ive process and this is how incrementally we'll get the best value even though this is quite a bit over where we hoped to be i think it's a good outcome and i'd move the item. >> so we have a motion and a second. >> is that the 50 percent that's shared? >> it's being prebid it's total. >> thank you. >> thank you. so thank you for the detailed presentation and also the written report was

incredibly helpful in understanding the process and why the cost is over but the process that was done to mitigate it to bring it down so i really appreciate all the details that went into that. >> any members of the public. >> harper aye that's five ayes and item 7 is approved. >> item number 8 is a presentation of and public hearing for draft year capital budget in an amount and draft fiscal year operating budget in an amount not to exceed. . >> sara giloti just to remind you of our annual fiscal budget

process typically we'd bring a narrative budget outlook to you in april so may we present a draft budget we'll take, comments any questions and the fiscal year budget is just our estimate for the upcoming fiscal year slice of the overall program budget as you heard extensively this morning managing the project to the overall budget so this is an estimate of what is spent in the upcoming year starting july 1st it's approximately 321 million there will be some changes in the final budget that we bring to you. the concept of operations rfq contract rfp contract that's on your agenda later this morning the cash flow information for that contract was not available