of the open space transportation projects as well as what is in the what else is in the plan i had a couple of questions starting actually with the rincon hill i know this is the first program to start looking at impact fees structure and i'd like to talk about this is a neighborhood that in some ways it feels like we're building in the ground up not a lot of infrastructure and we're putting a lot of primarily residential building in that neighborhood and, of course, to the north of that a mixed use commercial residential what the transit plan now we're in place and development is happening and tremendous need of construction in the area yet a gap exists between the impact fees and the non impact sources for the

capital improvement the economy has exploded and high-end development is occurring in the area we're finding the medium home prices for the condos are way above one million dollars for units i'm curious we're not charging for recreation and open space for example, we have a need for open space in the area and it is significantly rincon hill and market octavia are lower for example the thought processed behind. >> in the original about the impact fees with the plan we worked out the value of the land at the time and the city was occurring through the development we want do to set the impact fees at this point that the housing and office space we're falling for will

move forward and we'll be able to have a funding of a reasonable amount of infrastructure rincon hill is different when we adopted the plan we had a release to fund one hundred percent of the impact revenue it's not a clear understanding of the eliminating the infrastructure and the value that was considered the type of construction when you alluded to support the generous fees i'm sure you're aware of there are two specific areas the rincon hill fee it what we're talking about today and the selma stabilization fee we're impairing to the eastern neighborhoods or market octavia so we did an assessment and feasibility analysis to match all those things together

so i understand that and i know that we have maximum nexus we don't have necessarily hitting all the fees we want to make sure that the development is feasible but given what we're seeing with sales of the unit in that area we're reconsidering did fee segment we're hearing i know you've heard this we hear so many from the neighborhood their thrift for infrastructure open space transit and, of course our costs of construction is going up as well as with the boon and development we're competing with private developers with the same finite universe of the construction companies now we have a better sense of what developers are able to bring in per unit are we do you think that is appropriate to reconsider the nexus for a number of reasons the childcare fees are at zero i know this is

the first program and you have the stabilization fund with the feasibility will it be appoint to relooking look at the fees given the dollars coming in we have the decisions within the community process so this citywide look at the nexus this is the next item or how we spend the money that is a thing the department took on but we do as much as we can you mentioned something about rising costs and couple years ago we had a index so the revenues when it's collected it we're doing the best to capture the interests across the city to build the infrastructure the impact fees are not responsive to the ups and downs of the real estate marketed so i i think i

understand. >> we certainly heard from folks we want to relook at that and taking a look at we have a sense of what residential units are selling for but certain residential units are not going to command the same level of money but we're seeing high wholesales many the rincon hill area and the residents want to see the developers put more of that back into the infrastructures for the residents moving into the neighborhood i had another question about i was noticing this is just in the bio annual report through the controller's office i wonder can you address that question it is on page 3 about the development impact fee summary with market

octavia eastern neighborhoods and the c-3 district do you know if there's been an increase in projects between fiscal year 2012 and 13 and 2013-2014 for example, market octavia 13 in one year and next the impact fees tripled that year why is that is the developers building smaller projects in fiscal year 2012, 2013. >> good afternoon drew from the controller's office to some stent we can look at the specification as needed but i've attributed that to the value of the projects in those years as well as the subsequenting of the deferral fee a program to have a better impact collection.

>> so it's not the size of the project only the increase in value that is truly amazing and i just point that out for the members of the public for example, in market octavia 13 unit were built in fiscal year 2012 and brought in $207 million and in 13 one less and brought in $7.8 million attributed to the value of those projects going up over the one fiscal year primarily. >> i would say primarily but to get it do specification we'll have to look at it better i'll be happy to do that. >> and back to the planning department what's the do we look at the index because it is far below the rising costs of construction.

>> there's a process explained in the admin code how we establish that index this is established every year with the blend of construction and the unit interest rate so to perhaps we'll be holding the money in a municipal account and the cost of construction and the capital planning committee is responsible for derrick that interest rate annually that's how it is done. >> i think your office is certainly interested and in working an updating the foes we appreciate the nexus analysis i want to appreciate the balboa between both what we could charge and the nexus allows us to charge that the feasibility of construction we certainly don't want to dampen that feasibility side but i think we would like to see the balance as we say the value of what's

created and the vendors are raking in profits per unit as newer resident move in there's a frustration of the infrastructure didn't match what is speeded of the neighborhood like childcare and open space i know that is not you know from the planning department it is not that's a policy question but something our office is interested in pursuing. >> okay. great. >> is that it okay. good i've got a couple of questions while i'm most interested in the potrero hill and supervisor jane kim is interested in other parts of eastern neighborhood areas that touch here district what is the current gap for the infrastructure project because commissioner lee touched base on that a little bit can you tell

us what that figure is. >> the last 5 before you is market octavia and eastern neighborhoods together i'm not sure we have the number for eastern neighborhood sporadic e specific so for the steno year period but thought $108 million is for the shared neighbors it is $44 million. >> thank you very much so sorry so the funding gap for the eastern neighborhoods is $44 million over the 10 year period. >> oh, sorry i see what you're saying so the fill in gap is $44 million but when we include the pool of projects the funding gap for the eastern neighborhoods of the $188 million it is $144 million for the eastern neighborhoods it does that make sense so

basically, the is slide we're looking at it identifies the $144 million in the impact revenue and 2 hundred and 36 in other funds and $188 million gap of that $140 million in the eastern neighborhood and about the remaining 44 is in market octavia so that what we need over a 10 year period to complete what the departments and agencies feel is achieve able to support the growth is $140 million in the eastern neighborhoods. >> let's see we have a funding gap of $188.44 of that one hundred and 88 gap $44 million belongs to market octavia. >> that's correct. >> and the remainder is in eastern neighborhoods. >> that's correct. >> okay

why yes, in eastern neighborhoods okay. >> okay. thank you that's a lot of money. >> so the other thing i want to talk about what are some of the options the city has done to evaluate the funding gap what are some of the ideas generated. >> the effort it the effort i'm presenting before you looking at the city agencies and understanding the way this is my telling of it but the way mta operates they know about the state dollars that are coming up and they program that as a high-level so the conversation we're having with them to help to direct that problematic for the projects not affiliated towards this gap this is looking at the funding we know about

maybe and starting to direct it where we're seeing the growth i think the sort of novelty working with the sf knowing a lot of our agencies work on a state to - we're growing a lot of housing in the eastern neighborhoods we need to do the infrastructure planning with that in mind so over the past couple of years this beautiful but abbreviated chart is the beginning of that conversation with the agencies starting to look at their long understood sources and direct where the growth is happening. >> can you outline where the various eastern neighborhoods are in the capital plan and specifically interested in the priority level. >> within the plan p there are two ways first any project we

think is nearly funded we put that in the agencies bit so rec and park is responsible for moving forward with mta is responsible for the 16th forward so those are this funding strangles we tile u call those emerging needs the area plan calls for it. >> we think we have impact fee for it but know the city is committed to accomplishing it in the next 5 years so it stays in the capital plan and shows up as an emerging needs it is on the books to be accomplished but not tethered to a specific agencies yet. >> all right. so the mayor's office has a plan

for making decisions on what projects move forward for the competitive grant funding our office is awe cul-de-sack dialed into with the neighbors tangling through discussions their experience in the neighborhood as their needs they articulated are going to be met so i was wondering any other representation from the mayor's office besides the budget office or any other supervisorial offices that are watching this project >> we have the mayor's office of the budget at the committee but we do informational presentations we meet with a lot of supervisors as the issues come up and the cac meets monthly and matt is here from

the staff i believe that - they hold community meetings regularly to conservator bring this confidence outside of cac but regularly like once or twice annually to sort of reach that spot. >> okay. i have no future questions and my colleagues neither they having do but commenting. >> one other questions about the funding gap you've referred to in your last itself i wonder if if the funding gap is it accomplishing new projects in the eastern neighborhood. >> your question how do we define the need this is the area plans call for reaching a service level we're at with the new population so we try to figure in the next 10 years what

infrastructure to serve the population in summary yes sort of using the nexus analysis as a way to filter that and to work with the agency experts to balance that out with the projects. >> the nexus analysis includes the growth in the neighborhood. >> that's correct. >> great, thank you. >> all right. thank you let's move into. any public comment on item 1 seeing none, public comment is closed okay. colleagues given this is an annual item i'd like to make a motion we file this hearing >> thank you very much the motion is filed seconded by supervisor kim i guess roll call vote. >> on the item number one.

>> you want a roll call vote vote. >> yes. please. supervisor kim supervisor wiener and supervisor cohen. >> thank you. >> 3 ids. >> thank you very much okay this item has been dealt with the motion to file madam clerk call item 2. >> yes. item 2 an owners amending the planning code supporting the existing fees. >> the planning department is the sponsor of this welcome back. >> supervisors kirsten here to talk about impact fees this afternoon i'll present legislation by our planning commission on december 12th the citywide nexus analysis legislation and i think we've already had a really great conversation on a lot of the topics i'll reframe we completed

the nexus study a requirement that you update the nexus study every 5 years each of the area plans has it's own nexus study in an effort to make the program easier to generate a citywide analysis that covers the city it sets standards rather than a list of good to establishing the relationship between new residential and non-residential development and new infrastructure i want to make clear that nexus study doesn't look at transit it is is studied in a separate issue and not affordable housing we're talking about transportation matt haney streetscape and bicycles and open space and childcare facilities within the framework of this. >> so the legislation before you today as i said was adopted by the planning commission only

december 11th and it does basically one main thing it updates the references in the different fees so the new analysis so validing the fees but we also took this 80 chance to clean up how it operates a few administrative cleans up and only one change to the expenditures removing libraries we have conceded did branch library improvement program in agreement with the library we've felt it mating made more sense to direct the one percent into excuse me. to streetscape improvements rather than the libraries rehabilitation we dependent did not change the fee rates or the

geometry i want to make it clear the eastern neighborhood fees are still in the eastern neighborhood and fees still in octavia we've presented this to the market octavia cacs and had full support from them as well and staff are available for questions on this too. >> thank you very much thank you for that presentation colleagues, any questions on item number 2 no? okay. i just want to ask a couple of questions on page 12 of our report the nexus study the city will fund one hundred percent through the fee unquote how; is that correct there are continuous gaps continues to be gaps in funding patrolling for

open space in the eastern neighborhoods create by an increased population >> i'm trying to catch up to our question. >> sure on page 12. >> in the report. >> uh-huh. >> so the nexus study report. >> so what i think it might be referencing i'll talk through that help you he me but the way we establish the nexus amount if you can imagine how much the policy question we all answer it devil what will cap the total amount on what we think if rec and park sort of copes a standard of one square feet of park per person we'll set the nexus we use the understood references for rec and park to service the population as a way to mitigate this conversation

about what amount is appropriate there's a legal reason we choose that beacon hill we can't ask the vendors to provide two square feet of park per person when the city can only deliver one we have to make sure that whatever standard we're holding the developers to we can deliver. >> basically, it is true if we adopt the allowable fee that is in table 5 and 6. >> that's correct. >> okay. all right. so is any of the incentives we provide to the vendors what if any incentives do we provide to the developers if if any choose to build childcare facilities on site? yeah. >> yeah. so building childcare on site there's a lot of special needs for childcare in access to

yards and fire and earthquake safeties so the fire department has been working with agencies on understanding whats phases are we kind of have a check list to the developers to start that conversation but with whether that property is appropriate so in the potrero site the developer was able to seek an in kind agreement so rather than paying their impact fees they were able to provide the space rent free. >> that's areas we can do on a regular basis so we've set projects happening some the residential in eastern neighborhoods that are going to have 3 hundred unit and childcare facility will be a great need correct me if i am wrong butthe requirement

in terms of space that's a statewide issue. >> that's correct. >> on a statewide level. >> that's correct. >> so to make changes we'll have to appeal to our legislation is there an effort to do that. >> this is a little bit outside of my wheel house i know the guiding principles if you have 5 or 10 small children they can safely get between the play area and the exits i don't know that the listening conversation is in that direction it is more from our work around identifying early on the sites that can work there's flexibility i think in using private yards like a space so for resident at night and in the daytime a playground for children we have more controls for the operators and the others can participate in that

conversation. >> that's the latest i've heard. >> i certainly want this to have an amenity that will fill a great need we have a lot of families moving into the neighborhood and childcare is on the i sat on the first commission and that - asked that to a neighborhood that we don't say have enough of and another benefit it activates the retail space that's fine but it is nice. >> so also wanted to ask about the report it acknowledges the continued exchanges in the city that funding adequate childcare just bans the preliminary conversations with the childcare advocates we have a $500,000

need for capital improvements for the two existing childcare facilities many of which are outside of the planned areas as well as at least $2.5 million need for the infants and toddlers so given it is not as prerg as subsidies for childcare slots the improvements to the existing facility what improvements is to the existing facilities have there been any conversations about expanding the facilities or creating a new mechanism for the developers so they can help offset the city needs in any other way i know that's a long question. >> maybe it's this beautiful room but basically a limitation to the idea you put forward if i heard correctly can we use

impact fee money for the diversities this goes backlog to the legal rishlthd we on asking the developers to have money for the ready demand but it is limited in creating a new capacity additional capacity and month to month that new demand in the cases of childcare the facilities serve 25 children you can expand the capacity of that program to 50 or one hundred children but couldn't use it to do maintenance on the roof and maintain that level of service we've been working with the agencies with a limitation on the operators so this is something we hope to do or say in the market octavia plan we're putting ousted an rfp for

childcare community so many million dollars have you have to serve a number of children with more and that leaves it up to the provider to solve that problem. >> a final question around the impact fees i heard you say in the presentation it's a clunky to tell not quick do change to the dynamics of the market from my constituents is desire to increase impact fees and i'm curious to know if the board can make changes to the fees? so the development impact fees in the building code so their amenable so there the legislation they're part of the planning code the legal limit, of course, is the nexus analysis

and the sort of behind that this is sort of the hereto of why the department choose to keep the legislation focused on the updating practice writing these programs we are that trying to keep intact the community plan this involves the community and stakeholders so the negotiation about what that fee rate covers as we were talking about the transit in some planning areas that was a decision to a long community planning process >> and a yes. >> those are the kind of considerations around the changes and we've talked about that the fraeblt analysis and kind of understanding you know what the long term and short-term goals and the trade offs the city wants to make. >> the rate of return for developers is increasing and our current