is not exercised. >> good afternoon, commissioners. bore it's with the finances administration division. the item before you is to award a contract for financial management for financial advisory service. the annual contract amount is $140,000. the contract terms to extend an additional 2 years, the total $700,000. the port has a strategic objective to plan and implement a stable financial future to ensure the best tools are used for professional municipal advisors. these specialized skills include experience with municipal bond and financing

district and financing issuance, bond sizing and structuring and bond pricing. our municipal financial advisor also helps staff in formulating financing and strategy and plans and capital planning and development agreements. at the conclusion of my presentation on the contract award process, the ports deputy director of finances and administration will provide additional detail on work and upcoming assignments for this contract. the contract monitoring division set an lbe contract going of 20%. the ports current 2-year operating budget includes $140,000 per year for municipal financial advisory services. any program funding i don't know fiscal year 15-16 is subject to future appropriations and as i said before it's not to exceed

$140,000. the contract for 2 years, extending to $420,000 extended to 5 years to $700,000. to provide services through informal solicitation process for an established pool of qualified firms. on december 2nd, we received four proposals all of them at the rfp's minimum qualifications and established a strong panel with over 4 years of experience with the san francisco and department of finance for the proposals. the panel overwhelmly scored pfm as the strong firm. highlighted pf

m qualified staff including budget director under mayor feinstein and identified work samples as being strong and came in with 30% lbe subcontracting goal and used minority owned firm to meet the subcontracting goal. on january 22nd, we issued a notice of intent to award the contract. the alleged contractor with the local office here in san francisco. they have substantial seaport experience and worked with the ports of los angeles, tacoma and portland. as i mentioned committed to a 30% lbe utilization goal. they currently serve as the control of financial advisor, work with san francisco airport, mta and

puc and work with the port since 2009. >> thank you, eileen, deputy director. we are retaining financial advisor primarily we've used heavily for bond sales. while we don't anticipate selling revenue bonds in the near term we want to always have them in our hands in case we change our mind. the port does have bonding capacity at the moment and has since i have arrived but it has at capital policy at this time. we would need to find lucrative near term cash return projects to issue revenue bonds in the near term. pfm will be helping us with cfd i sd structure for the city and the

giant lot c 37 projects as they will come and also we are leaning on our financial advisor moore in the realm of financial modeling and pfm's last contract put in future perfect to the budget cash look at the world and balance sheet look at the world to look at near term changes in how that changes bond capacity and what that means to capital policy and what means at various scenarios and you saw in our 5-year financial model, 3 years based on high and low able to utilize to quickly move as projects emerge. so that's generally what our financial advisor will be working on and abhor it's and i are here to answer any questions. thank you.

>> that's an amount of contract? what time will be spending on this? >> about $50,000 will go towards the modeling side. i don't think we'll spend the award of the contract on the revenue bonds. if it appears $40,000 institute -- is not a lot of money. we have not exceeded that level. we do a lot of our own financial analysis in-house and give us the model and we utilize ourselves and ask questions related to changes. while it's a small contract, it's the sizing we need. >> that answers that. and the lbe, the 30%? are they carrying the employees in-house? >> it's separate from backstrom has been the lbe prior contract.

backstrom helped with the rating agencies and with credit and with credit presentations to the rating agencies. they also helped us with our reporting requirements for our revenue bonds making sure that all the disclosures are available on a system called emma which are required to have and disclose and reported timely. >> thank you. >> is there any public comment? >> there is no public. >> that's why i forgot to ask. seeing none, public comment is close. >> commissioner? >> i had a question. so, the criteria is 100 points, i guess you add up 100 points from each evaluator because i was wondering how we got to the total? >> the total points.

>> maybe you want to make that clear it's additive of each evaluator. i thought there was a typo in the beginning. the other question i had and i guess this is a general comment. sometimes we come up with these rfp's that we award and we do end up selecting someone that we've already used. we may qualitatively describe that previous relationship with the professional firm, but we didn't necessarily talk about the utilization factor that we did use and i guess commissioner murphy asked the question whether we would use up the full contractor not. what i would like to see used in the conservation core contractors also, what were the statistics from the previous utilization that you can share with us relative to the particular contract that we can share

going forward, in other words, look past what that is and look for the awards for the contract looking at the theme players on both sides of the equation. i would appreciate if that would be included in the future. in this case, commissioner murphy sort of asked but i guess my question is in last contract how much were we using towards? >> the lbe subcontracting goal in the last contract was 20% and my understanding that they met that goal. they came in and exceeded that goal. too last contract was it similar in terms of dollars? >> i had the last three 3 years and it arranged from $30,000 a year to $136,000 last year. so, we did not get to the full contract amount.

however, the amount that went to lbe contractors went to 20%. >> that's good to know in the track record to what methods we used in the past. it sounds like in the answers that we may not even use up to 140 on an annual basis. >> correct. >> commissioner adams? >> following up off of commissioner whoo-hoo's questions. we didn't do any extraordinary bonding during the last contract. >> we did. >> i'm sorry, we utilized them during that period? >> we did. there was a bond team to supplement that and we had a separate contract for that larger bond team and we were very happy with the pricing and with our engagement with the rating

agencies. it was very good deal. yes. they were a part of it. >> and we were very fortunate that the underwriter we used did a lot of work as well which was encapsulated in the underwriter fee and the bond deal went over multiple years. it was spread out. >> that was going to be my next question, can the work they do is it capped at an annual 140 so if we have them on a project say over 2 years, can they do 280 versus or do they have to build the 140? >> i'm thinking in terms of a budget appropriating. if we don't spend any this year, we can spend twice next year. on a budget side it on an annual fund balance that closes every year. we don't have it on a prospect

project account. if we have a large scale, we may stay on the amount of the contract term. >> in terms of the work they did last time was similar that it fell within the approved contract amount as opposed to the annual limit? >> yes. >> okay. >> i do want to point out that while we currently today don't anticipate issuing any bonds at least in the next 2 years, we know that we have development projects that are going to be looking to do something with the ifd and it's possible that we maybe needing to look at the financial visors for the way they use their proposals in an economic consulting role we may need to use a financial advisor in that role. that is on the horizon for us. so that's part of if you will our crystal

ball for this contract. >> thank you. i'm now waiting for commissioner murphy to come back because he wanted to be back for the vote. >> i can ask a question, why does this firm out score others by such a huge margin. it's not even this close. ? >> you are right. i think it comes down to the experience they have with other agencies and other ports. one of the key scoring criteria was relevant experience and they have a very strong team they brought in and the written material was stellar. i think it's a combination of experience and an excellent staff. >> yeah, why would the other firms look at this the next time another contract comes up, i would work very hard to shore up my gaps. >> as bora said we utilized the controllers prequalified list. i believe that city departments,

not to say the director of public finances administers that pool and i agree, but i do think there is, the firms on the pool are getting other city work. pfm does have a very large foot print as mentioned they are the financial advisors for other financial enterprise agencies. >> as they always get it. do we throw everybody a bone or is it whoever scores gets it. i never want to seem like somebody has a lock on something. how does that work? >> the rules of competitive procurement is the highest score is recommended to the commission for the award. we do try to spread the work around and

one way we accomplish that is through subcontracting goals. so, the rules of the game are the highest score is recommended to the commission for contract award. that's the fundamentals of affair and open process and the highest ranked firm wins. this has 30% participation. also an excellent firm, a minority owned firm and lbe firm as well. the work has been spread in that fashion, 30%. >> one opportunity which is interesting because i ran the bond program for a long time. the proposal for all public once you make the award, after today anybody can come and look at them, but no one does. when i was working for a small faa firm and i looked at them and i learned about how i was presenting the proposal and not what i was

offering. when i asked them to look at them, they didn't take me up on it. the city is designed so we don't have discretion, but we do try to offer education. it's surprising how few people take us up on it. >> you just had to make that point repeatedly. >> it's pretty surprising. you know. it's like admiring someone else's painting or photography, you learn from it. >> there is a book out there called "steal like an artist". >> it does teach you how to respond to this city's format. >> so, commissioner, adams? all in favor say, "aye". >> aye. >> we didn't get a motion.

>> is there a motion? >> so moved. >> second. >> all in favor say, "aye". >> aye. >> any opposed? abstentions? motion carries. >> item 13, new business. i have two requests. probably out of the way. i want to know can we have a port commission meeting at the new cruise terminal. if we can have it that day, i'm going out to rent a lincoln town car and pick up commissioner whoo-hoo and drive her down to the terminal. >> we will make that happen. >> secondly, when we do adjourn, i would like to adjourn in memory of the plane crash today and the

victims. there was a lot of young people. >> thank you, commissioner. >> thank you. >> any other new business? >> seeing none, is there a motion to adjourn in memory of the victims of the german airline plane crash today. >> so moved. >> second. >> all in favor say, "aye". >> aye. >> any opposed? meeting is adjourned. thank you, everyone. [ meeting is adjourned ] >> >>

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