losed. now for the commissioners. >> i have a question. so who is responsible for all of these over runs occurring? i know we're supposed to pay for it because it's $600,000. who is responsible to make sure that they don't happen? >> much of these costs over runs were from unforeseen conditions but according to the memorandum agreement with the transportation authority occi is responsible for the costs. >> >> do we make the decisions? who is responsible for the design change and the submissions? who is responsible looking at the budget and saying there is $180,000 budget deficit? is that us or the transportation authority? >> it is the transportation

authority. they're delivering a turn key of this project and entered into the design can construction phase and that's how we're delivering this -- >> i still see we need to restore the reserves of two $36,000 for again another set of unforeseen costs to go up. >> >> yes. construction is currently about 35% complete so there is still a ways to go before it's finalized and typically you would budget -- >> so there is $600,000 -- say we decide on that. then there is another two $36,000 that reserved part of that -- almost $600,000 and what did they use the researches for additional unforeseen circumstances will we have to fill in that gap again? >> that's our obligation under the moa. >> yeah but it sounds like we're just a blank checkbook and that's not good enough, and i

don't think that's precedent for us to say yeah let's go ahead and have these cost over runs go on and on. >> commissioner. i fully understand your concern. just to add a little information and clarity. some of the cost over returns were due to as we enter into the projects we work with the ta to come up with a budget and sometimes you just don't know. for instance the $180,000 relating to the bid an estimate was provided in the original moa what we thought the construction contract would come in at. it was surprising that all bids came in higher so there were surprises but i would say that the costs were reviewed and they're appropriate and unforeseen that caltrans would like four submissions instead of

two and we were involved with the ta with it. it's typical practice that you maintain some project reserves during the project should you encounter unforeseen conditions you can deal with it at the moment. the moa currently provides for discussion with us between ta and oci under change orders so we're involved in the whole process. it's unfortunate we have a number of these unsore seen things but i want you to know we were involved with this as the discussions came up. we hope we don't require anything more for the depletion of the reserves but it's a good practice to maintain that. anything not dispeshs side retained. as refin mentioned we're still in negotiations with caltrans around the stock pile soil and that is an additional thing we may have to come back for additional funding but we don't know that today

but separate from that we hope this is sufficient to finish the project and again sometimes you don't know in an excavation project like this so i wanted to clarify that for you. >> sure. caltrans doesn't have a good history or track record of doing things on time and on budget and we see that through the last bay bridge we tried to build; right? so i don't think this is the last of it. >> that's why cal trans is not doing the reconfiguration work and we hired the ta to do that work and this issue with the soils is sort of the last issue with caltrans. the items before that were the cost over runs like the submissions -- the initial phase of getting the job ready to go but the ta is doing the work on behalf of them and not cal transs. >> they're going to go ahead and do it and how confident are we are with sticking to what is

approved today? >> i will refer to liz from the ta if she has comments about the construction and the things that we may encounter. maybe liz if you could add additional detail and where we are in construction today. >> good afternoon. i am the senior engineer for capital projects with the transportation authority. i am the project for the project during the construction phase and we're as sure as we can be given we're not finished digging so kevin talked about man-made buried projects and we found in the ground which we didn't anticipate some left over piers from when there was a bridge structure there and caltrans had cut off portions of the piers and covered a portion of it on the ramp and now we had on remove those so when digging in

the ground you don't know what you're going to find. we looked at drawings and as much information as we can but we didn't know. we can't anticipate the contaminated materials and nothing in the design or study phase that we would encounter these. we are hoping that the reserves ary plenished to get united states through because the. >> >> transportation authority isn't in a position that we can continue to work and extend costs beyond what is allowed in our memorandum agreement so if we run out of money we will stop the project and we're trying to make sure that doesn't happen because that's in nobody's best interest. i have no cause of spending your money without good cause and it's coming back to you -- >>not us. the people. >> we're a public agency just like you so we're doing this for the people. we are doing it as

a congestion management agency and i am sad this is having cost over runs and we are to some degree yanked around by caltrans with designs and the extra submittals but our hand was forced and they changed design standards and required information they didn't tell us about before and then you get a new set of review ares and new demand and there is nothing you can do except do it as quickly and efficiently as we can and that's the goal of finishing this project as quickly and as efficiently as we can and i am hopeful we don't find more things in the ground and this will more than cover our needs. the lead material aside and giving you back money at the end or not expending all of the money that is allotted. >> thank you. >> commissioner mondejar. okay. is there a motion? >> i was just going to ask a question of our director. so

hearing that tiffany you hear my concern of over runs and costs because this is the people's money. it's not our money. it belongs to the folks and i think you share that as you stated. maybe some of our partners that we have chosen to partner with, you know, need to understand that as well. i would love your thoughts on it. >> yeah. i too share your concern about th are working very collaboratively with our partners at the san francisco transportation authority and their executive director tilly chang. this is an issue of such importance that both the director and i as well as maria [inaudible] kaplan of the tjpa because it's in all of our collective process and selling the property for the

transit center and for the benefit of the state and i agree it's important that our other public partner caltrans really understand that. i think you indicated they have a long track record and history that we want to make sure that they can do better and we can work better together so to that end all three directors and the respective technical staffs are working towards to make sure we're all operating with the same information and informed and have the same set of understandings and the same goals to make sure that we're move forward expeditiously so i can assure you it's risen to the highest levels and we want to make sure people are responsible. these are property tax dollars just as the ta is dealing with that and we want to spend them responsibly. >> final question and then i will shut up so how long has this project been going on?

>> hi. kevin masu ta? . from the design inseptionz? >> yeah. i am going back to the local hire policy of 25% , right. >> yes. >> and how long have we been doing this? >> [inaudible] construction start? >> september 2014. >> 14. okay. all right. so you work hard to make sure they go with those numbers? >> yes. >> thank you. >> commissioner mondejar. >> [inaudible] >> okay. any motion? >> so moved. >> second. >> did you want to move it? >> oh you were asking? >> i will move. >> all right. >> is there a second? >> i will second. >> second. please call the roll. >> commission members please announce your vote when i call

your name. commissioner mondejar. >> yes. >> commissioner singh. >> yes. >> commissioner bustos. >> reluctantly yes. >> madam chair rosales is recused. i have three aye's and one recusal. >> okay. okay let -- [inaudible] >> okay. thank you commissioner. please call the next item madam secretary. >> thank you. the next order of business is 5d workshop on the recognized obligation payment schedule for week rops

15-16a. discussion. madam director. >> thank you madam secretary. commissioners this is for discussion only. it's the second workshop. the first workshop we covered the major approved projects and the how longing obligations. now we're covering everything else which is just as robust, debt service, asset management including any loans as well as administration so that's really going to be the focus plus any changes since you last heard so with that i would like to ask leo levinson who is the deputy director for finance and administration to walk you through the presentation. >> thank you very much chair and chair rosales and commissioners. as the director mentioned this is our second workshop and i will be going through the summary of the property tax first and then the administrative costs agency wide costs and debt service, a sed management and then the changes

since the first workshop. here's the totals on the rops. you can now see the whole rops together. there's been a slight adjustment since the attachments were sent to you so it's $498 million instead of power -- $499 million and there was one postponed on the rops and not until january and reduced the total. it includes $42 million in bond proceeds and other funds and i will talk about what some of the major items are and 49.$5 million in property tax requested on this rops. so looking just to the property tax the largest amount is the debt service 24.9 million in this rops. in the past all of it was in the january period but

because we refunded our debt in those bonds -- a portion of the debt we set it up it's from the june distribution to start the balance our property tax request a little better during this time and includes that amount for the bonds and full year of debt service on the new bonds. another large property tax request is one of the housing projects in the transbay and 11.7 million. 6.3 million is the pledge from mission bay and we always draw all of the tax available from mission bay for infrastructure or housing. our administrative costs and project staff suggest 1.9 million. 1.8 million for the second repayment of the low mod loans borrow friday that housing fund back in redevelopment days to make a payment to the state and allow the city to receive the money

into the housing funds. there is another pledged property tax to the tjpa. this is an estimate and the actual disbursement is what is available in june and the next amount and from the formerly state owned parcels. whatever increment we receive and housing get a net share of that. there is amount for calpers for retiree health and unfunded liability and the pension. i will talk about that in a moment but they come to 1.1 million and finally some other small items that were there, the $700,000 related to transbay, some of the asset management costs and grant match that is carried forward on the shipyard. so the largest thing on this rops -- why it's a large total amount comes from the other funds and that includes almost $300 million that passed through our agency

so it's not things that we're spending here. we're hoping to conclude the sales -- this was mentioned lasted week that these are sales that -- one of them already occurred but we need the authority on the rops. we didn't include it on this one and block nine and the other ones we hope that completed in the next rops period and provide that to the authority to complete the transit center. there are impact fees used for affordable housing for blocks one, seven and eight in transbay and finally an extraordinary item related to the sale of jessie square garage that we hope will close in this period in the summer and results in the developer paying off the bonds to construct this and paying back the city for the property tax for the debt service and that's why there is an extra

36 million to allow for that. let's turn to the staffing and administrative items one and seven. item 1 on the rops is where we put all of the staffing and cost and benefits cost scption the support staff that is contributed from the city are also in that line. previously we had two lines for this and it proved to be simpler we changed the criteria in one and four and combine one line and that's what we did on this rops. on item 7 which previously showed the total pension liability we have a dollar amount for the first time and this 537,000. i wanted to mention calpers is going to bill us as a dollar value to bring the pension up to fully funded opposed to a percentage of payroll so in the past we had a pension percentage that risen from eight, nine, 10, 12, 14% which really was two pieces.

there was the normal cost and what it cost to fund the pension for staff and closer to nine, 10% and the extra was to bring the pension up to full funding. well, really calpers has decided and makes a lot of sense actually to split the two apart so in terms of percent of payroll it will go down to 9% but they're going to charge a dollar amount and to bring it up to full funding requires the contribution regardless of how much staff we have and estimated that for 537,000. it's going to go up -- they're phasing it in and go up over the next couple of years and then stabilize and go down hopefully. they give a discount if you pay up front and 20,000 a year and taking that option of the lump sum payment so if you combine the two

together it's 5.8 million. we have an estimated annual amount of 11.5 million for administrative costs. and i'm going to go into some more information more detail as we go. these staffing costs -- this budget does allow for the 6% cola which was approved in the labor agreements that you just approved. that was just implemented and there was a three and a quarter percent of cola for staff and this accommodates that. it accommodates the pension contribution costs, the filling of vacancies and one additional staff position attorney proposed in this. you will have an opportunity by the way on thead min cost when is we bring the budget before and you the actual spending authority. this is our authority from the state to spend and starting here and there will be a detailed discussion

when we bring the budget before you in april i believe, the first commission meeting in april. so about -- it says here about 47% of this administrative budget is coming from property tax in items one and seven and the other 53% is from -- we're still using some of the taxable housing bonds for the staff costs related to housing that isn't reimbursed from other sources so while we still have that available we're using that and there are other funds as well that help support over half of the costs developer reimbursements and charge staff time to developers and we are doing that and lease revenues to support our staffing so i did show this table in the memo that was supplied to you this show you how the cost for the prior year and not just the six

months of the rops but what we're projecting at this time and we may refine the numbers when we bring the actual budget to you later but this shows a small decline in the bond proceeds. that decline in the other amount of $400,000 is related to our budgeting of how much transbay developer fees we have to support. we had funds coming in that we budgeted fully last year. this year we're spreading money over the time period we're working on those projects so we're assuming somewhat less than that in the other funds compensated for an increase property tax request and you see the addition of the 537 separated for the pension contribution for the unfunded liability for line seven. when you look at the total together it's about 600,000 increase from the prior here, and we're allowing a small amount of

increase for retiree health which is the other agency wide costs i am showing here. we spend a million dollars a year to the commitment for the retirees that we give the support for the health insurance. this is another look at the admin costs. down by the more detailed break out of really the administrative support costs. you can see the salaries increasing by 7.7% partly due to coalace the pension contributions and as i mentioned one additional position and the filling of vacancies. retiree medical insurance. we're allowing for a slight increase in that. other things are fairly constant. we are allowing for a slight increase in rent. we don't have that charge before you from the city. we've had savings in

insurance costs and we're allowing for a small increase in our it costs. that maybe related to refreshing our server and possibly using -- we're still negotiating with the city over we will virtualize our servers with the city or do the work ourselves and we are trying to build in sufficient to maintain the it infrastructure. turning to debt service there's 37 million total of which 25 million is a property tax which i mentioned before. it includes the full years debt service on the new refunding bonds and there's also the non property tax items as we still have the hotel tax bond that is money passed through from the city and we also have south beach harbor bond that we are getting funds from revenues.

we are also include r including in here allowance for this if we can sell bonds on mission bay and we built that into the rops authority and we are building a team for that and bonds and new issuances there. you will see that soon coming before you. yes, as i mentioned the other is -- oh yes, a major part of the 13 million is to [inaudible] tax exempt debt to build jessie's square garage and other funds paying off that debt. for asset management i'm going to turn over to christine our real estate manager. >> good afternoon commissioners. i am the development service manager. i'm going to highlight the major rops item related to asset

management and yes yerba buena and we are working with these areas. we anticipate that these agreements will be terminated in the near future. continuing payments are included on the rops just in case there are delays in the transfer. next shore view park. ocii has obligations of the park until we can transfer it to the city. accordingly rops 15 and 16a includes funds for property management and 1.5 million for capital improvements and deferred maintenance. next the western edition. as you know ocii has continued obligations as a property owner of portions of the fillmore heritage center. accordingly this rops include

$200000 for payments to the operator of the fillmore heritage center garage. $300,000 for operating deficits and capital reserves for the garage. i would like to point out this amount is higher than what's been shown in the past on previous rops given the closure of the largest commercial tenant in the center. there is $90,000 for common maintenance charges for the parcel. again this was increased as a result of the closure of the commercial tenant. next is disposition costs. the rops include 125,000 for costs associated with the ongoing management and ultimately the disposition of ocii's assets assuming that [inaudible] approves the long range property management plan on or before this rops include and include all of the other costs associated with the

disposition process. next is yerba biewn on gardens and as you know we have obligations as a property owner of the jessie square garage and the mexican museum site. both of these properties will be transferred to the developer of the 706 mission mexican museum project under an agreement approved by the commission and the oversight board and (inaudible) in 2013. until that happens which is hopefully this summer ocii must pay costs associated with the jessie square garage. accordingly the rops shows 23.7 million for the garage which represents reimbursements to the operator for expenses, parking taxes to the city and pay off of accumulated debt service on the bonds and includes 1.8 million for over space and fees from the mexican

museum project. now on to yerba buena gardens. as you know we have obligations as a property owner until transfer to the city. the rops includes the following items. $2 million for property management including costs and management firm and legal services and payments to community benefits district. 2.1 million for culture operations and programming which includes the use of restricted lease revenues to pay ongoing payments for the center of the arts and the childrens' creativity museum and yerba buena events and includes 3.2 million for capital improvements and with they will turn it back over to leo. >> okay. you have been approving the grant agreements for excess bond proceeds but not sure if it will dispersed prior to july 1 so given the state's requirement that we put on the rops what we're dispersing we

carried forward these bond proceed items. 384 to 388. some other changes are a few minor increases in hunters point shipyard. they're hoping to spend the full amount on hand for the legacy foundation. some other updated estimates and finally as i mentioned the $900,000 for the [inaudible] ramp and the first stage of the project is not starting until 2016 so we have taken off that payment authority from this particular rops. so the next steps we're going to prepare the other background worksheet for the rops for the oversight board, the cash balances and prior adjustment work sheets. we can report back to you after that is prepared. the oversight is on the 23rd and with that we

will submit to the department of finance and the pns is due by april 10 and in the last rops we had no issues to confer on but if we did we have five days to do that and meet and confer and the final determination. we will be back here with the budget our actual spending authority to spend our money which you will have a chance to approve in april and that will go forward to the board of supervisors on june 1 as a separate action from the rest of the city budget since we're separate but with the same timing as the june 1 departments so we will have further chance to discuss it then. >> great. thank you. do we have any speaker cards? >> i have one speaker card mr. washington. >> i didn't know that was you in back of me. listen case in point may i show you all this here? can you show