ing. the talk for a second about outlines of business. on the cruise side, cruise only revenue is strong. we anticipated revenues in the next full fiscal year of cruise only about 5.6 million dollars. our cruise ship volumes is growing steadily. over the past 5 years we moved from 116 thousand guest to 446 calls to 250 thousand guest on 73 calls. this year we'll have 276 thousand visitors on 76 calls a record. next year in 2016, we expect a record again with next to 300 thousand passengers. the port increased the market effort included by designing and placing 2 new cruise ads on the board here in the pacts. we are actively

meeting with cruise line decision makers in miami la andciateal. [inaudible] developed strong relationships with many major players in the industry. ory bookings in 2016 are strong. we have 80 confirmed reservations to date including cristm cruise delux night world cruise beginning and ending in san francisco. challenges remain as cruise lines have raised concern about the high [inaudible] as compared to other west coast ports. it a competitive business. operationally after 9 month of operation 2 major issues emerged. first we had issues with customs and immigration. when you get off the ship and go through custom at pier twaevl it is like a airport. in the ort days you do customs on the

ship. initially the lines were long and delayed the disembark which delayed the embark which caused traffic so the port and pcst staff met with u.s. custom and boarder protection to discuss the issue and find other way tooz speed up the process. the good news is that u.s. customs is very helpful in streamlining the procedures for disembarking guests. it is well received by the guest and save enormous amount of time and our [inaudible] increased mpt customs cannot help is wrong tharks have been a ally and stake holder. secondly the biggest issue is the trafic on the embarcadero. the first several calls were a learning experience and there was back up on the embark dairy. we have since

then worked with the san francisco public work squz the san francisco metropolitan transportation authority to streamline vehicle ingress and egress. we hired sfpd officers for traffic control at the entrance to keep down traffic and insure pedestrian and bike safety at terminal entrance and exist. a issue that caused a lot of the back up is people come up the embarcadero north bound and pull over on to the bike lane to look at passengers off instead of going into the terminal. this blocked the lane which blocks the embark dareee. since then we filled in 4 old drive ways to discourage that. we installed nono parking and pier twaevl pick up and drop up signsism we installed vehicle [inaudible] in the drive way and installed other new signs to prevent

the seek vas from stopping on the embark dairy. we are also in the process of reconfiguring the entrance and exist to the gta that allows smoothder transit and we work with mta to wurk on the electric meter signs you see by the ball park. they will let people know what is gogoing on and what the delay is for and offer different traffic routes. we are also wrurking with the cruise line to improve advance information on theinable och timing of buses for a ship call. often 30 buses arrive at the same moument and now they stagger thus taking the peak and pressure off. the veckd line of business spelshz events. urbly special event results are very good despite little marketing and lead time. pricing in our

terminal demand are strauj. special events usually take about a year to book in advance and sometimes more. our policy is not to-we have first cruise ship calls or the first priority and the calendar opens for special events 14 months in advanss. pcst, the event side had 26 events at pier 27 in the first 9 months without the typical advance booking period. the number of events booked in the first 9 months and type of events and price point gives reason for optimism that our revenue will meet original projections in the next fiscal year. the type of event held there is whos who fortune 500 companiesism some of the highlights linked in, [inaudible] had their holiday party in twen 14. the giants who i mentioned. since 2015 we had apple computer, sun

power, dev network, core technology-i don't know who these people are, but they are big shots. sales force booked for a second time and if you drive by pier 27 the ford motor company has takethen entire facility the entire week squm showing their new technology of the automobile. the chairman thofe ford motor company is addressing the [inaudible] gta is being used for exhibit of self driveling cars and so on and so forlth. other users? clude the san francisco opera guild. [inaudible] we had san francisco design week. the event stuff is strong and growing. one of the unusual pieces of business we obtained that we didn't expect is that this fall

we'll have sales force-will be shart chartering a vessel celebty infinity for 6 days for pier 27 to serve as a hotel. there are no hotel rooms open in san francisco for this event and it draws hundred och thousand people. we need to with hotel counsel to make sure we don't step on tows. it is a easy 250 thousand in the pocket we didn't anticipate going forward. the building-anybody wants to rent it is 35 thousand a day, your checks will be fine. pcst are here, john [inaudible] general manager and kevin manager terminal manager. they hired additional staff. we are very crfd that line of business continue to be strong. other events [inaudible] public event.

we heard about the simpany playing in the park in july. that is a wonderful event for san francisco and to a80 this facility to the rest of the resident of san francisco. the plaza, the gta and tip of the pier are all available for special types of actinchties. the [inaudible] permit in these areas [inaudible] port developer program to enliven the space, draw [inaudible] and provide activities free of charge and open to the public. the simpany is the perfeskt example. we envision developing a robust of events in this location. these actaiskty can show a movie alt night on the lawn or somebody sent a e-mail about having a silent disd'errico. i had to look at up on google and it a disd'errico where you weir head phone squz everyone dances but there is no nysso people on telegraph hill

would love that. speaking of telegraph hill, public access-one of the really unique attributes of this terminal-this is probably the most accessible to the public of any i have seen. large areas blocked by the weir house are open to the public. we have had difficulty initially making sure all the public access is open when it should be as we said it will be. there rp bumps in the road but got past that. there are high voltage cranes for the short side power and [inaudible] which will be accessible to anyone walking down the apron. we will anticipate opening that up during the day light hours by august once we have barriers in place to keep people from jumping around and using it as a jungle gym. we upidated the website last

week with new maps that rin the package that show what is available and open at the terminal. our planning team is working to install signage sat the facility so people can walk out there and see what-there is nrfxz as to what they are looking at and the importance of it. parking is another line of business out there. parking has been-the revenue is lower than anticipated with the parking. pcst and the parking contractor empark are in charge of the parking. there have been factors that explain the revenue short fall with the parking. one, we rchbed regulatory approval from bcdc to parking [inaudible] i think jan or february of this year so it was later than the terminal opened. and the pier 35 valet parking which we think will be a winner there was technical things we sh h to

do inside the shed with co 2 monitors and fire safety that we rin the prosof installing and think that will be open in august as well. additionally, i think it is a matter of training visitors that this is a new parking opportunity. pcst and embark are going to work to add signage employ flagman and [inaudible] nearby attractions such as alcatraz cruises or exploreatorium. financially the facility-cruise shipping to our city is a huge economic impact. every ship estimated i heard bigger numbers. about a million dollar of economic blft to the city and county of san francisco. it is a job creator. the number of people working down there that the taxi cab and ship yard and hotel workers they

are all involved and it a benefit to the city so we think we generate 76 million economic benefit tr the region and tax benefit is 225 thousand dollars excluding our direct rev nup. we think if we get into the weeds the numbers are in your pact that business is strong and we after 9 months we are confident the receive new will continue to be strong. one of the biggest issues we talked about is dredging and that is a big expense and shows our fendmental numbers and impacts them. dredging is 50 percent higher than anticipated and the reasons are we had a idea that that could happen and told the commission back in 2013 that the regulatory environment was getting so significantly stricter that there is a possibility of the ratios

allowance of the dredge spoil upland which is very expensive versus out to sea in the bay is changing. the army corp of engineers and bcdc and [inaudible] decreased the amount of disposal and increased the amount we are mandated to put up in restoring wet lends or upland or ocean disposal. the costs have gone up significantly. it is timely i think the dredging contracts [inaudible] what is 5 year contract, we had the item last time. it will be coming back thocommission for a new dredging contract for ninety-six 5 years. we have work would our dredging conceltant and talked to various contractors for strategies to mitt great these high dredging costs. we think we can do outreach for more bidders. there are 2 as john davey said, there are a small amount of

dredgers in the bay that do this type of work. there are other dredgers in the area that are in the region that could be brought into play. we are going to do a extensive outreach to them and think we can make it attractive to them and think more competition will help reduce unit costs. there is a finite window when you can do dredging. there are exceptions in the off sigez. all the dredging needs of the bay, all the ports are at the-you have to work within that parameter. there is some lee wlai for off season dredging that we would may qualify for and by getting off season we think the unit cost could be lower because there is les business and people may be more hungry to negotiate with us. and then 2 other ideas are to explore possible wet land restoration or dredge sites

on our own property because that is the real expense. it isn't the get thg mud it is where you put the mud and how you deal with it going forward. back the fuper wrun of our ideas is in the old days the port used to have our own dredger and used to-our maintenance guys had a dredge and they did the dprejing ourselves. work wg john carter and the crew and consultants we'll look at all the alternative so when we good xh back to you with the dredging contract by the end of year we hope to have creative ideas to bring the yoount cost down going forwards. so, i have given a cursory look at the terminal. we are optimistic. it is a bump terminal. dwoweeks ago i gotd a call from a senior executive from carnville corporation from washington dc who said i will be in san francisco skn i want to see the terminal. he said it is

the best terminal in north america and this guy has seen them all. he was very very imprez. we have a rot of work to do. the dredging numbers are worry some but think the business line revenue will increase and meet our expectations. the whole team is here to answer your questions, thank you for your time >> thank you. first i'll call for public comment and have chris christensen. sorry. public comment? seeing none public comment is closed. colleagues commissioner woo hoo >> thank you so much. i appreciate i know a lot of work went into giving this report but think the is very important as we celebrate the success of a new terminal and think we all agree it is beautiful and

pleny people comment on seeing all the cruise ships coming in so i want to celebrate along with the staff with our terminal operators that we have done a good job. obviously there are areas we are still trying to work through and i do have a couple of questions. the order that you presented which is the cruise ship business. you mentioned that the customs made changes, can you explain what they did to make the process work faster because i also want today comments on my recent experience going through san francisco airport so i know they are making improvalment all around >> i know enough to be dangerous and what they have done-there was a specific change that had to do qu foreign passengers coming off cruise ships, right mike? do you remember? >> [inaudible]

>> you have to wave your pass port now. that was a huge impediment they waved >> that is disembarking? because you [inaudible] they are disembarking and they should be safe. kevins comments are not recorded so can you repeat that full sentence? >> they streamlines-instead of avenue passenger having to go and get their eyes or finger scanned they streamlined it by visually looking at the pass port and waving >> because that has been checked already. you haven't gone anywhere else. i just want to make a comment on that one because having gone through san francisco airport the other day, global entry which i mentioned hopefully they think about global entry and the other one, even if you are not global entry and they have self service

kiosks for u.s. citizens and permanent residence and that speeds up the immigration line quite a bit. >> i had the opposite on std. it chs very very slow. let's be careful what we wish for >> i think it is also people getting used to it. i think cruise ship people tend to take many people and know the in and out. once you get the hang of it-at the front of the line but it was much faster than waiting in loo. they have self service kiosks which is the concept and would they consider putting self service kiosk in the terminal. maybe they could be movable when you don't need them and move them out >> i'm glad you brought them up because the united states

[inaudible] however the canadian customs has just installed kiosks up in canada in van coorfb and will do it on the east coast as well. in a trade periodical i read last week describing this they expect the u.s. customs will follow suit. the question is who pays for them. at the airport is there a contribution to buy the app ratting but it is issue that is coming, we just don't have it yet >> you can talk to the airport how that is working. it is like self service at the airport. it took a while to get use today that. the other thing i want to finetd out and i don't know whether we have pop up retail food service in the cruise ship terminal and whether that is a opportunity to consider not only just because of possibility in terms of revenue but also as convenience to passengers. i have been on cruises

myself many times and sometimes somebody wants something on the ground and there is nothing there. >> we haven't done to to date but there thereis discussion regarding a hot dog stand or cool drink stand or something that you see on the streets here in san francisco >> i suggest that we also focus on san francisco made and if somebody was willing to do a pop up cart that it would be a entrepreneur person would be interested in coming in. we can focus on highlighting san francisco in terms of increasing revenue opportunities for our small businesses as well as us. then i think that you moved into special events and i guess are we spill still using heartman stud wroes as a major contractor or did we- >> yes >> okay. so we are

still-the only challenge we have is what i read in the report is when somebody wants multidays and we don't have the schedule to offer. >> we need 24 hours before a ship arivers and really 15 hours after a ship departs to cleanse the terminal so that is a impediment to book. when you have time if you have 14 months ahud of time the cruise bookings are pretty solid once we get them. they are creative >> we had 26 special events and they seem to be very high profile great events, going forward with the fact we have 14 months to schedule events, is there some projection of whether the 26 is the level that we expect or go up? also going back to tmg of their forcast of what they think they can do. how high is high? >> i think the forcast at 5

dwowas the medium on a annual basis. we haven't hit- >> with the experience we have do we think that is the right number? >> john olen feld if the commission would allow-if you would like to come come up. johnny o as he is known is mr. events. >> good afternoon. yes, so my name is john [inaudible] and work with met roservices and part of the ptst at the cruise terminal and so far events are very strong and i think at this point we have a little over a million dollars i believe so far in event revenue for this year. that is confirmed and probably another 4 to 500 thousand in event bookings we are anticipating through the enepd of the eri. i say it isn't so much about how many event, it is about how

big they are. for example the ford motor company is a 5 day event and that is a very high revenue event for us. having one of those is equivalent having 5 single day events >> so if we did in dollars in stead of dollar of event what would you expect over the next 12 to 24 months? >> so i would looking at what we have done so far and what we are work with at the moment that is not confirmed but looking goot i anticipate 1 is a hamp million dollar revenue range which is above our initial pr jokez >> at this point do you think marketing in terms of those that need to [inaudible] >> we are very successful with minimal marketing. it is very small industry. the people that need to know know about it. one event will come and there may be 10 or 15 people at the event that talk to other people and come down. it is a

small community and think people are in the anyhow no >> [inaudible] booking with superbowl >> yes, and we are working with the superbowl committee with that >> i want to go back totraffic because i raise td at a commission meeting in terms of-i'm glad to hear the improvements that are being made and hopefully there is more direction being given because the day i was there there was no direction. i hope that we are continuing to figure how to work the traffic flow and get people alterinate ways to go down embarcadero so we don't run into that because that is a negative experience before you get on the ship >> it is and we have seen and we have done some review and timing of the [inaudible] and seen improvement. we have prince sss cruises, every ship their guest fill out a

satisfy action survey and we see the ratings from the embark improvering as we improved traffic flow. the cruise lines are very scientific when it comes to that and have seen continual improvement. we have a way to go, don't get we wrong, one delivery truck that stalls can make a impact but we have seen clear improvement but have a ways to go to make sure it is streamlined as we can make it >> i wonder if people can be direct #d to come straight on instead of coming down embark dairy. if they understood that because most they think they have to go on the embarcadero. >> i think a idea of having the signs up like on the

southern embark dairy when there is conjection that can offer alternative routing on those signs but thereat is a good idea >> glad to hear about the dredging and-my assumption the way you described it is dropping the mud thip ocean which there are more restrictions is probably the least expensive alternative versus upland and wet land >> [inaudible] is the least expensive. upland restoration is more expensive and the amount you can dispose of in bay is being reduced >> are they fully understanding what the impact it has on us? is there other scientific reasons why in bay is dangerous? >> i asked our dredging conceltant that question this morning and her response was that economic

seems to be a-not a big priority when it comes to this regulation >> okay, but there is something about preserving the bay? >> yes, there is science involved with preserving the bay. >> okay, so i'm glad to here had a erwe are considering in house dredging because it is interesting to compare the inhouse model to see if we can do it our sevl since it is major maintenance issue we have to face. it isn't one time every few years it is a constant issue so it does make sense to consider whether we bring it in house >> yep >> sorry. those are all my questions. >> thank you peter, that is a graitpresentation and think the facility is funomtle. it is a beautiful beautiful site and i still can't fwleev that we actually did it. it appears that even though we are

still-our income is still negative we have more projected income than we thought, right? am i reading that right? >> our income is partly is the issue with this upidate it is a 9 month period and we usually look at this in annual and fiscal year. our revenue can cv rots are strong and think thaare growing pains such as events and parking. the cruise revenue is strong, that is our main priority. the real issue is on the expense side >> right. you also mentioned there were issues with the passenger fee and some people in the industry think they are too high here? >> we are not a cheap port, i'll be honest with you. we provide a good service and world class experience and the cruise lines pay for that. if you recall we

increased our passenger fee per head from 12 dollars a passenger to 18 dollars a passenger to help pay for the terminal and the cruise lines, they dopet like it but understood. they see the facility and they get it. but wree competitive market. san diego charges 6 or 7 dollars for a passenger on and off the ships. the [inaudible] cost are high. we are is good labor and they do a good job, but the cost are high >> your question of revenue going forward, i think you make a very good point, which i want to come back to. if you look on the table of page 5 of the staff report, if you look at the revenue debt suchbs, historically the port managed the cruise business to cover expenses