distances) >> call to order. roll call. [ roll call. ] >> item 2, approval of the minutes from february 27 and march 19, 2018 meeting. >> so moved. >> second. >> is there any public comment on the minutes? seeing none. >> public comment on executive session -- >> got a vote. >> oh, i'm sorry. yes, vote. >> ayes have been approved. >> item three, public comment on executive session. >> so moved. >> second. >> all in favor?

>> okay. conference with legal counsel and really property negotiator. >> thank you. >> thank you. >> second. >> all in favor? >> i make a motion not to disclose anything in closed session. >> second. >> all in favor? >> pledge of allegiance. [ pledge of allegiance ] >> please be adviced that the ringing of and use of cell phones, pagers and similar sound producing devices are prohibited at this meeting. the chair may order the approval of removal of anyone

in the use of a cell phone, pager or any other sound producing device. members of the public have three minutes to make pertinent comments unless the chair adopted shorter time on any comment. item 4, public comment on items not listed on the agenda. >> is there any public comment on items not littsted on the agenda. >> item 9-a, commission report. >> i am elaine forbes, executive director, and under this report today i am just introducing to people the first is deputy city attorney mark blake, and i've had the pleasure to work with mark over the years. really got to know him well when we issued in 2013. he served as disclosure and bond counsel to the city's

departments, and mr. blake will be taking you through a training today that is actually required. as you know, we have the ability to issue revenue bonds under our city charter, and in conformance with federal security laws. this last year, you updated your municipal r port, that policy. lawrence brown worked to bring that item to the commission, and part of the items in our 2016 debt policy update was to make conforming changes with federal-state laws, including a new requirement for our finance director to arrange training for you and for our staff on disclosure responsibilities, and that training is in fact what deputy city attorney mark blake will take you to today, and he will be back to give the same training to the important port staff involved in bond issuances. i will say we do not have any new plans for issuing debt, but

with our ifd districts, we see there will be training coming out of those projects, so thank you. >> okay, president brandon, members of the board, again, my name is mark blake, deputy city attorney. my area of specialty in the city attorney's office it with respect to municipal finance, so i work with the port, the general fund, the puc, the transportation agency in connection with the issuance of bonds for the city. and so what we are going to do today is basically do kind of a quick overview of the federal

securities laws and how they attach to commissioners when you approve bond issues for the port. so what we're trying to, i guess, convey is just your responsibilities under the bond securities laws, and then yhow you discharge your responsibilities. so -- so what the presentation will cover is what's the applicable law, what are the applicable standards? we'll give you some idea of kind of what the official statement is, and that's the document that's the vehicle pursuant to which we obtain loans from the marketplace or we get bond investors to invest in port activities, and then, we'll give you a brief overview of how you discharge your responsibilities under the federal securities laws. so first, let me give you a kind of context under which

this all -- the legal context under which this all occurs. so the federal securities market is in some ways the wild west. we are not directly regulated by the securities and exchange commission, so unlike our corporate counterparts who are directly regulated, very forms driven, there's a comment period, there are regular reports filed, the municipal securities department is own regulated, and that is due in part because when our -- the federal regulatory regime was setup for corporate securities, municipal securities were deemed as safe in the first instance, and then -- and as a practical matter, there are 45 to 50,000 municipal issuers throughout the country, so you have states, you have cities, counties, townships, school

districts with their laws and prerogatives, and so it would just be impractical for the federal government to regulate all of these issuers. but the s.e.c. does indirectly regulate our marketplace by regulating indirectly our dealers and prescribing the rules by which they can underwrite securities. a couple of those is one they have to get an official statement where they can underwrite bonds, and two, they have to get a commitment from the issuer to provide annual financial and operating data during the life of the bond. it's called continuing disclosure. and then, moereover, the s.e.c views itself, quite frankly, as a vindicator of the interest of bond holders. so the idea is to create an

efficient market, and that is to ensure that investors have all of the information that they need in order to assess their risk in order to make an informed investment decision, so the notion is that the pricing of bonds reflect risk, and the only way to get there is for -- is to require issuers that as borrowers to provide all the information that's necessary in order to make an informed investment decision. okay? so -- so when the s.e.c. brings enforcement action, there are a few areas that have jumped out where we try to, in our training with staff and our work throughout the city, that we try to kind of concentrate on these areas. so one is the silo effect, and i think the silo effect is kind of the biggest area, so in some instances where local governments have gotten into trouble, it's because you have -- you don't have various arms of the city, of the issuer speaking to each other, 'cause

everybody has a little different perspective. construction has a little bit different than finance, finance has a different perspective than accounting. accounting has a little bit different perspective. but if you can get everybody in the same room and talk across everybody's discipline and raise questions, you're going to have better conversation. secondarily, what we've seen in the municipal marketplace is political influence, and this rears its head in two ways: one, quite frankly just corruption. my brother-in-law, i'm going to hook him up with a bond issue when he's really not competent for that bond issue or just getting paid for not doing much work, so that's just kind of corruption. and then secondarily, and this is the area that is -- that i'm really familiar with. it's political influence in terms of suppressing disclosure

because it would impede access to the market. so you have very powerful political figures who don't want negative information disclosed for fear that it would impede their ability to accomplish a financing end, a financing project. and that is -- i've worked on two really landmark s.e.c. cases. when i was a young attorney, i worked on orange county short-term financings, and that was the largest municipal bankruptcy then in the country. and one of the -- whenever you works on one of those financings was you couldn't ask questions that the treasurer or tax collector was so powerful that anybody that threatened to upset the apple cart wouldn't get business. so the rule in working on those transactions was don't ask questions, do your job, let's get this done. and then, secondarily, when i worked -- actually, i went down

to work for the city of san diego, and when it had its difficulties associated with an s.e.c. action, and the two principal drivers of securities and bond issuances really ran the departments with kind of an iron thumb, an iron -- is it an iron thumb or iron fist? >> iron fist. >> but in any event, it suppresses information, it prevents people from asking questions, and it leads to bad disclosure. and then, a third area that we see the s.e.c. noting is the lack of controls and procedures. and so over time, i think that most issuers have -- have developed controls and procedures that in fact it's a matter of state law that you have to have a debt policy with controls and procedures. and what this -- what controls and procedures do is they layout a deliberative process for developing disclosure, they

figure out who's accountable for what, and it's just a more disciplined way of bringing issues to market. and then finally, the other issue is that in many instances, individuals involved in the disclosure process just weren't trained, just didn't understand what their obligations were, and so in the san diego case where i worked, some of the individuals just commented in terms of preparing disclosure documents, well, i just changed the dates. nobody just reads this stuff any way, so that is really not reaching the bar for disclosure practices. so-so -- so this port has three areas of liability -- or the federal securities laws touch the port in three instances. one, when we access the market for primary bond issuances, so when we are speaking to the

market in that sense, the securities laws attach, and so all of our statements and our representations made in our disclosure documents will be measured against the requirements of the securities laws. our continuing disclosure filings, our annual filings, the securities laws will attach to those, so if we have mistakes and omissions in those documents, the securities will attach. and then filings expected to reach the marketplace, securities will attach these. but in orange county, they said this is really the old guidance we have for members of boards and commissions. so for your purposes that the securities laws will attach to your activities when you're approving a primary offering. and then, a communication that you might make with respect to the port's financial conditions

or, you know, challenges facing the port if information's not readily available, the market may look to statements that you say or when we're accessing the market, if you're, you know, trying to a booster in some sense and something goes wrong, people will look back at those statements to judge whether or not they met the securities law standards. so i'll give you an example here. we're going to the market issue bonds, and you just happen to be, you know, in approximate a public setting, say, invest in the port assets. they're 100% safe. you can't lose, and then two years later, the port is having difficulties. that statement will be measured against securities laws. again, so the security law standards, it's -- it's fairly straightforward that it's unlawful to make an untrue statement of material factor omission of material

information for securities. it's material information, it's fact based for the or omission of material information for securities. it's material information, it's fact based for the most part. and since we're -- the s.e.c. would have to prove that we were negligent or in a 10(b) 5 action would have to prove that we were reckless or intended to defraud the market. but typically, the s.e.c. sanctions issuers by bringing actions, and the resolution is there's an admission as to negligence or there's a finding of negligence, and then, there's a cease and desist order with some remediation. and the antifraud provisions are really intended to address the informational asymmetry, the asymmetry between information and investors, so basically, the port has information that investors need

to know, and the securities laws are being used as, if you will, as an encouragement to get the port to disclose everything that an investor needs to know. so what's material, the substantial likelihood that under all the circumstances, the misleading or -- would have assumed significance in the deliberations of an investor, so it would change the mix of information. so if you knew, for example, that a -- rather the port having $500 million of revenue, the port only had $250 million of revenue, that would change your decision as to whether or not to invest, or you might invest, but you might say well, to invest, i need a little more interest on my money because i'm assuming more risk. so typically, these are facts and circumstances where issuers get in trouble, cost overruns

on projects, magnitude of lawsuits, regulatory actions that aren't disclosed, you know, things of that nature. to the extent that there are -- where we typically would come up with forward looking statements, the port makes projections of something, there's leigh way given as long as we note something making our material objections. so the s.e.c. actions, again, have hit government issuer city, you know, in their capacity as the government issuers. individual board members, since you do have securities law exposure, but to tate, no individual member of a body has been sanctioned by the s.e.c., and i think the reason for that is at some point, the s.e.c. realizes that fault lies

elsewhere. so while the s.e.c. views members of boards and commissions as gatekeepers, they have really not -- at least as of this date, gone after board members or members of a legislative body for securities law violations. so -- so here is our -- the one guidance we do have from the security exchange commission concerns the orange county report 1996 that arose from the orange county bankruptcy that occurred in 1994. at that point, it was the largest municipal bankruptcy in the country, and it basically involved an investment pattern by the treasurer-tax collector that went against the county. so for a while, they were -- they were doing great. they were borrowing money, and it was short-term money, and they were investing it long,

and they were investing it and leveraging it. so at the time of the bankruptcy, they had about $7 billion in their investment pool, and they had about $22 billion leveraged in these instruments called investment loaders. so as -- they just went counter cyclical. so when the feds started to raise interest rates in 1994, it created an exposure of about $1.5 billion in their portfolio. their constituents got nervous, and they wanted their money, and it caused the bankruptcy. and the failure was at that time, orange county failed to disclosure the risks inherent in the investment, and the fact that the county was dependant on the returns from their investment pool, and they failed to disclose it even though they had knowledge it. so one of the statements in the

21(a) report that was issued at the time was despite the supervisor's knowledge of increasing use of money from the county pools to balance the discretionary budget -- at one point that was up to 35% -- was dependant on getting returns from this pool, that they failed to disclose it in the official statements; that they approved official statements without taking steps to make sure this information was disclosed even though they were aware of it. so they never received or asked to receive a copy of any preliminary official statement or official statement during this period, nor did they question the county's officials about the state of the pool, etcetera. now, so one of the things that is an outgrowth of the orange county situation is when we approve bond issues now, we no longer approve them out of the

consent calendar, and that comes directly out of the orange county situation, so all bond issues you approve, it will not be on the consent calendar, and by the chance it gets on the consent calendar, you should ask that it be removed. and then, i do think there is a expectation that when a bond issue is brought before you, that there is at least some back and forth consideration of that bond issue, the nature of the bond issue, how much are we issuing, are there any inherent risks associated with it, and this is a part of the kind of q&a that i think that the s.e.c. sees as healthy, a healthy approval process, and one of the ways that you discharge your responsibilities under the federal securities law. so the orange county bright lines are if you know that disclosure -- that your official statement has misleading disclosures in it or

emissions, you can't authorize it. you can't authorize staff to issue it to the marketplace. that's one of the bright line rules. nor can you recklessly disregard a process or disregard facts to indicate there's a risk of disclosure. what i take that to mean, at some level, if you know there are big issues, you have to do some investigation on your behalf to make sure they're one, being discussed or discussed accurately. so here in orange county on, you have an investment strategy, people were aware of it, but they didn't take steps to make sure it was appropriately disclosed disclo. so basically that they acted recklessly, they had knowledge, but they didn't bring it to bear in the official statement, and they took steps to hiding

official information. and the taking of steps could have included becoming familiar with the investment. ask staff, where is that being discussed? the port, maybe we have concerns about climate change, maybe we have concerns about bird maintenance, and so if there's a bond issue being approved, among other things, about if there's a bond issue being approved, ask staff, where is that covered in this document? let me read it or summarize, where is it covered, and more or less just discharge -- but being responsible, more or less asking questions. so you can either become familiar with it by reading it or you can just ask questions about big issues that you're aware in your capacity as board members. all right. so let's turn to port's official statement. so basically, it's a prospectus, i don't know how many of you have equities or

bonds, but it describes for the investor, basically a description of the port, the project that you're working on, risk factors associated with it, their source of security, how are they going to get repaid, any litigation facing the port, the port's general financial information, and then, the port's commitment to provide them with financial and operating data over the life of the bond issues. typically, we issue tax exempt bonds so they'll get disclosure on that, as well, and then call provisions, and that is that they will invest with the port. and to the extent that they're a long investor 20 years out, when can we call them out and then redeem the bond, so they'll get basically some basic contract information. and i think themes here are -- one is the port's official statement, so it's not -- it's not city attorney's official statement, it's not disclosure

counsel, it's not bond counsel, it's not underwriter, it's the port's. it's what your financial story, so developed a ceqa options technical memorandum for review by the port that will help drive our approach to compliance with ceqa. so the alternatives development assessment and program selection is the multihazard risk assessment will be part in help driving our formulation and analysis of alternatives to address both seismic and flood, and again, we can't emphasize the importance of engaging our stakeholders in the process of developing criteria that will be used in the formulation of our alternatives and eventually the selection of those alternatives. and the components of the alternatives analysis, again, is on your left, in addressing the needs, risks, and aspirations that we learned from the multihazard risk

assessment and how we can integrate those in terms of criteria and alternatives analysis and ultimately recommendation of initial improvements. some of the outcomes of this will be an aadaptation tool box. that adaptation tool box could include seismic retrofits, ground improvements for the seismic, but also in flooding we'll be looking at soft solutions, more like earth and berms and living shorelines. and then on the hard solution side for flooding, we'll be looking at and that argue i abl get lower cost of capital in the capital market now. i do think that they're -- by having a reputation of being a -- of having really good disclosure really does payoff in the long run. so -- and so when we train staff, i think some of the themes -- and this is just, again, background for you, to a certain degree, that we

encourage staff to be, to take care, to be deliberate. don't get rushed. if you s're not ready, say youe not ready. if information is good last year, it doesn't mean it's going to be good this year. take a critical eye, and make sure that everybody that should be involved in the process is. and one of the things that i have learned in my career is people who are empowered in the organization ask people to raise questions, so there are many instances where we're sitting in a room sha, workinga document, and i read something, and it doesn't make sense to me, and i know -- and not that i'm not that smart or anything, but look, if i don't understand it, i know that there are other people -- so just raising the question, does this make sense? this doesn't make sense to me.

even raising that produces the disclosure because the drafters have to explain it. and invariably sometimes it doesn't say what they thought it said. and then, tell the whole story and make sure that everyone's trained and knowledgeable, so that'll be part of the training that we give to staff when we do the staff training. so these are official statement observations. observations number one is the investors and s. e.c. have 20/20 behind sight, so -- hindsight, so if there's a test of your disclosure, oh, yeah. and then, rule to question number two, to disclose or not, we invariably disclose it. to me, there's no harm in disclosing unless your information is not complete, unless your information is so in flux that you really don't have anything to say, it's just

not ripe to say anything about. but really, there is no harm in disclosing. so the s.e.c. can make criminal penalties, and criminal referrals to the department of justice, and i think that's what we're seeing, because the s.e.c. does care about this. so again, we, the port has adopted controls and procedures, and -- and currently, it's now california law that issuers have to have debt policies which contains controls and procedures. again, good disclosure policies identify who's responsible for what, ensures that people that are involved are accountable, and then requires disclosure training. and so again, why we do commissioners securities law training, we minimize the risk of misleading disclosure. again, remember, so we -- if

the s.e.c. brings an action against the port, they have to prove that we were negligent, so by training staff as well as commissioners, and by devoting all the resources that we're going to be devoting in terms of bond counsel, disclosure counsel, having experienced people at the wheel, it will minimize our risk of disclosure -- of misleading disclosure, and if something does slip through, we can at least say look, we did everything possible, and it nonetheless slipped through and mitigate the risk of any sanction. the other thing that's notable here that i -- that sometimes i make this point is that having misleading disclosure and having investigations about your disclosure is extraordinarily expensive. so both in the case of orange county and both in the case of the city of san diego, their ratings were suspended, and so they really could not access the capital market, the public

capital markets for a period, and they had to borrow privately, which was really expensive. so in addition to the increased borrowing costs, the city of san diego spent in excess of $40 million in investigation fees and work in bailing them out, so it's really expensive to fail in this process. so again, how to discharge your legal responsibilities. so there's the message that nobody wants, although we did this in san diego, if i were on a board or commissioner, is i would ask for a private offering before i approved a bond issue. i would ask staff to come in and brief me on the bond issue, so i had an opportunity to ask whatever questions that i needed to ask, that you might not necessarily want to ask in a public setting. so that's one way. but the other way, to the extent that you're a commissioner, and you have areas of sensitivity, look

through the document or ask staff to point you to the document to where that matter is discussed. and then third, and to the extent that you're concerned about things, that you should convey that information to staff in the disclosure process before you act to approve a document. and then, the question that invariably comes up is why can't i just rely on staff? you folks are here full-time? and the answer is you can, as long as that reliance is reasonable and in good faith. so good faith reliance is well, who are we hiring, what's the experience of the personnel involved in our disclosure process, etcetera? but basically, if, you know, our q&a, and what we've done -- i think the puc does this, for

any bond issues, we pose kind of a canned 20 or so questions, and they center around basically kind of informing you as to what that bond issue's about, so what's the purpose of the bond issue, what's the source of repayment. are there any peculiar risks to this bond issue? are the -- where are the key factors disclosed in terms of rescuing your financial position, so we kind of answer those questions in a q&a, and you can necessarily give directions to staff if that's what you would like prepared when we do a bond issue here. these are, again, other -- other questions: do you have any peculiar -- particular knowledge? have you brought those risks to the attention of staff? and -- yeah, and in your perusal of the official statement, have you seen any red flags, that oh, i don't

remember that being talked about. i don't remember that number. that number seems low. we were talking about litigation, and we -- authored our exposure as x, and we put it in the book, and you said gosh, when you briefed me on that, that number was a magnitude ten times higher. that's a red flag that you might bring to the attention of the staff. this is a question, but it has to be reasonable. yeah, and i think the rest of these are pretty straightforward, so i don't need to go through this. again, we have controls, disclosure controls, and i will say that port staff is -- you know, is highly trained and competent in this area, so i don't think that there are any concerns there. i do think the city has devoted lots of resources for this, so for every bond issue, we have dedicated disclosure counsel,

which not all municipalities have, and the reason for that is so we have a dedicated law firm that can advise us on securities law and securities law questions, and also prepare the document and bring us market disclosure, so for simile situated ports, what are they disclosing, and can bring that to the expertise of a port's disclosure document. and you have me, i have about a billion years of municipal law experience, you know, and we have the port team. so i think you're in good hands. if you have any questions, happy to answer them. >> thank you very much. thank you. is there any public comment on this item? commissioner? commissioner woo ho? >> yes. i want to really commend us to have this conversation 'cause it leads into some other areas that i think having lived in the corporate world, and where we live with s.e.c. and

disclosures, this is obviously a very important topic. so i guess my theme is a little bit -- i absolutely think your presentation has been perfect, and it's well-timed. i think my theme is really to prepare us to not have to face looking at a bond issue and an official statement and get all this data all of a sudden and try to figure out 'cause with you go how big those documents are. because i think -- and it's been something that i've been suggesting, but this is the perfect trigger for me to suggest that there really is before and beyond disclosure, that i think we as a commission should have an understanding the port's financial condition on a regular, ongoing basis, a. and to support your point about enhancing repairation, because reputation is usually enhanced by diligence, transparency, ongoing diligence, and since we're on a stand-alone basis, if people were able to see that

we do have this, not as a one time all of a sudden we're going to hudle and try to cram in all this information and read this 300 page document, which would be very difficult for us to understand all this information at once. i think it's important that we get bits and pieces here. it's something that you've given me a chance to be on my soap box today to talk about this, all the different parts. it's not that we don't hear, we do hear, it's bifurcated, it's scattered, it's not you know -- unified. i think when it gets to us, that we have as the commission and the port, enough background to be able to do the things that you ask us to do. but without that, i think it's very difficult to all of a sudden cram that in. so we know what we do here, we get a very detailed budget on the briefing and the capital planning, but i'm not sure we

get regular updates where we stand on the financial condition of the port. we get an annual statement, a memo from john, i think in terms of just how we're doing with revenues and expenses, but we don't -- it's not all put together. so i will go on my soap box and say this is the time, and it's the perfect reason why we need to do this, to have regular updates, and whether we do that privately or whether we do that in open session, i'll leave that to the staff and executive director's side. but i think it's really important if we want to do this properly, and it's important not just because of disclosure, but disclosure is one of the products that we have to end up with and do it properly, is that we should understand and not be put in a situation, and we will not ever be in a situation like orange county where people were not asking the right questions, we should understand inside outside, and we should nmake that remark at

comtail parties, buy the bonds in san francisco, because we should have some working knowledges being able to understand the financial condition. generally, i think we do, but i'm not sure we have the complete picture. i'm not sure we have the fact accoun account -- facts and fingers to know that. we don't have the financial condition, and i'm not sure except occasionally, elaine might tell us you know about what your bond capacity is, but i think we need to do that on a regular basis to be prepared to do this well, and i think -- i think we want to strife to be good at what we do or excellent at what we do, and not just we're barely checking the box off. so i guess that's my statement to say this is very important. this is great that you did this. i really appreciate it, because i think it really triggers me to go back and encourage that we do this for the commission and for anybody else on the

staff level so that we can feel very proud of what you do. and as you know, san francisco does have the highest credit rating right now of all municipalities. and in order to preserve that for the port, it's not a one time or two time, you don't parachute in, it is an ongoing standpoint, so we have to all be diligent about it. so thank you for bringing that to us today. >> so can i comment on one of your -- >> yes. >> so in a municipal market, one of the concerns has been the staleness of informations, so one of the problems has been, we issue bonds. you issue your bon issue, you would never provide continuing disclosure to the marketplace, so ten years later, you had no idea, the financial condition. so 1994, thereabouts, there's this requirement for continuing disclosure, but that's just annual, so the s.e.c. has been encouraging municipal issuers

to start reporting quarterly, just like their corporate counterparts do, so your statement is a good one. the city produces, the controller produces i think a six-month report and a nine-month report, so it may be that staff can produce something like that for you. but it is attention in the marketplace where information is not readily available and investors can't kind of, if you will touch base from time to time to see how their issuers doing. >> in this case, we're only worrying about bond issues. in the corporate world, there's so many events that trigger disclosure. it's complicated. people are constantly worrying about -- if this is something -- and if you're on a public board, it's constantly, too. it's not strictly financial; it has other implications that you must disclose, so it's very important.

>> commissioner katz? >> you wanted to call us into the next disclosure statement? [ inaudible ] >> i just had a couple of questions, and commissioner woo ho alluded to, and i'm also more familiar with the private sector side of disclosure requirements. going back to just -- so i'm getting a little bit into the weeds just in terms of a material disclosure. given it's a public body, and we have public meetings, i guess i'd have a concern, you know, how we make sure that statements aren't made during the course of one of our meetings in response to questions that would fall under -- >> yeah, and generally where this comes up and -- is where there is not information that's available to the investing marketplace, so let's just say that there's a newspaper article about the port's financial condition. and so -- and we're in between continuing disclosure reports, financial statements, and there

is a vacuum for information, but the desire, for one reason or another, is to give the marketplace comfort. so in your capacity as, you know, a commissioner, if you make a statement at that time, that statement will be tested against the antifraud provisions. and if, you know, people are trading your bonds in the marketplace, and they rely on that, then liability could attach. so in the regular course, it probably doesn't come up. they understand that legislative bodies have their activities and speech, but i think it's when you have crisis situations and a vacuum of information, that that's when statements by commissioners really could create exposure for them. so it's really in that kind of limited circumstance. >> and then, just in terms of any statements that staff might make. i remember you said you're going to do the same presentation, but i remember we

have very different standards. if approximate any kind of statements go out, we've shut done -- >> typically, staff is not being quoted in the press, typically. now where staff can get in trouble, and this is rare. in the corporate side, the opportunities for insider trading are significant. on the public side, the only time that that really comes up is when we're doing a refunding, so we're refinancing bond issues and stuff. we somehow were to tell one of our friends, hey, we're going to refund some bonds. you might want to look because those bonds that are traded at the port's credit rating would automatically become aaa once we refunded them, and the delta between a single a or double and triple a rated bond, that's the only way you could get in trouble. what comes up for staff more is

selective disclosure, so an investor calls up, wants some information. and let's say that information is it's an excellent insight, okay, and so the question is, do you provide that information to the investor, or have they raised a question that really lends itself to the voluntarily marketplace, so that's really where the training for staff is is responding to investor inquiries and whether -- certainly, we don't produce stuff for investors, but whether is the question is of such moment that we should provide information to the -- you know, kind of the investing marketplace. >> and i'm going to put forward the risk factors, do we make any kind of representations and warranties? >> what we say is what we list -- i mean, the big risk is -- i mean, one is unique to,

you know, the issuer, so the port is more or less a landlord, but then, the port has certain risk factors that it faces that are unique to other risk factors in the city, so the entire city faces seismic risk factors. the entire city is grappling with the effects of climate change, but the port might have peculiarities like its real estate, so it's risk factors like it's seismic, it's climate factors. that's a big one. it's seismic. i don't know how much is deferred maintenance for the port, but we say, this is not an exhaustive list, but these are some things that you might want to consider. we take no responsibility, but we might want to advise you of a future risk. so typically, there's maybe

eight changes in law -- i mean, there's kind of standard ones that we provide. >> i think all the rest of my questions have been covered, but thank you. >> thank you. commissioner adams? [ inaudible ] >> -- i look forward to you coming back and educating us some more and stuff, so i really appreciate you making it he ve very simple. you're very articulate. >> thank you, mark. your presentation was very good, and i think staff made some great comments. i think you have to update us on your continual conditions, whether it be biannually or annually. i think we need the budget so we can see how it all works together, so hopefully, we will

get that. thank you, mark. >> thank you. >> thank you, mark. the second part of my presentation is to introduce byron rhett. he's our chief operating officer. byron is going to represent the delegation that president brandon led to washington d.c. march 22 through 23 which included myself and brad benson. president brandon and staff had a series of really important meetings. i think it was a successful endeavor that we took on with the chamber of commerce, and byron will give us more detail. >> thank you, president brandon, commissioners. yes, i want to express our appreciation for the opportunity to participate again in this san francisco chamber visit -- annual visit to washington to meet the california delegation. we were also -- do want to

mention we were also joined, one meeting in particular, by commissioner adams, who was there on port business and other business. so we -- this has been the -- i think the third and the most recent number of trips to washington d.c. where we've participated with san francisco chamber, and we really had a chance to take advantage of contacts and the efforts that they put forward, led by tali 5a hart, the president, and in particular, jim lazarus, the senior vice president. you'll see here, the meetings are visited by all of the delegation participating in the meetings with the various congress people, but in particular, the visit was

highlighted by after afternon meeting with senator dianne feinstein. there was a morning meeting with leader nancy pelosi, as well as you can see some of the other names that the chamber was able to arrange in terms of meetings. the other opportunity that we have is to setup meetings specific to the port regarding issues that we're trying to address. the primary focus of this visit to washington was meeting with key representatives of various departments, as well as our legislators regarding our seawall earthquake safety project. so we had the opportunity for

some direct port staff meetings, and you'll see there, we met with congress woman napolitano's staff, as well as senator carpers, senators harris, and senator feinstein. and we also had meetings with some staff directly. we met with department of labor, the national park service, and those -- i highlight those because while the primary focus of our meetings was really related to the seawall, we did have an opportunity to follow up on some additional issues, such as the wade survey that you directed the department of labor to have completed to our negotiations with the national park service and the alcatraz

development. and we've also been -- had conversations with the national park service as it relates to historic tax credits for projects like pier 70. so we were able to have these very specific meetings to move forward the port's agenda. one of the most significant meetings that we had was again, related to our seawall project, and that is with the army corps of engineers. we were able to meet with the highest civilian -- highest ranking civilian staff person, director of civil war, james dalton, his staff, as well as representative from the secretary of the army. and we were pushing forward with couple of approaches or an

approach that we outlined to you in the past that we were looking to get approval of a general investigation new start for our seawall project. we had an opportunity both to talk with our delegation representative as well as talk directly to the army corps staff. they gave us really good insights into how we might be able to move forward with this investigation, but they also gave us a backup approach that we might pursue, the section 203 study, as well, which would allow us if we're not able to get federal funds, federal approval, to move forward with a more conventional approach to getting army corps participation, that we could move the project forward by initially spending our own funds. so it was a very successful meeting with the army corps, and overall, a very successful

visit to washington d.c. with the chamber and, of course, with the port team, led by president brandon. questions? >> elaine? >> no, i think you provided an excellent presentation. thank you, byron. [ inaudible ] >> i was back there on business for the i.o.w., and i was back there last monday, and was kind of fortunate that president brandon and byron wasn't going to make it but it was a watershed week for me. i had been back there lobbying on behalf of our union, but also i was able to get some port business in.

i met with the deputy secretary of transportation under elaine chow, secretary rosen, talked about our issues, but i also talked about our seawall and how we needed money. he pointed out that it was $1.5 billion in tge rr grants, and we need to go get that money. had a good meeting with speaker pelosi. i talked about the harbor maintenance tax, met with my friend u.s. senator brian schatz from hawaii, and then i gave a card to elaine today. there's people very interested in what we're trying to do on the sea level. i got a chance to catch up with the gang, i think it was on wednesday night for a few, and then, i think the highlight of the week for me was that i was able to stay for the march and

to be in d.c. with a half million people, and i was to thank george clooney, oprah winfrey, steven spielberg, who all put up a half a million. i believe as a commissioner, i have a safety code, and that safety code allows me to go home to my family. i think there should be something that children should be able to go home at night. i don't think parents should be burying their kids, i think kids should be burying their parents. it was a very uplifting for me to end the week in washington. i want to thank the owner of the patriots. he was the one that used his jet to fly the children out from florida to washington,

d.c. i think we got a lot of good work done, and we have to stay in washington d-.c. we have to be active, whether it's sacramento, or washington, d.c. you've got to be with the movers and shakers. unfortunately, politics is sometimes the warranty of evil, but i've got to be there to get things done. the way i do it when i go into an office, i throw it out as a bipartisan issue. you want everybody working together, and we have to be able to compete and build our ports up, and so i think we should go after that money. the money's out there, so thank you. >> i would just like to add that we were there during a very interesting time. luckily we landed, due to the snow storm, but being there

while the deliberation and passing of the omnibus bill made it difficult to see some of the people we were planning to see, but overall, i think it was an extremely successful trip. you would think with all the people we did see, that we were there for the week, but we were only there two days, so we packed a lot in. we had an extremely good meeting with all of the various staff members. last year when we met, we met with the congress men and women and senators, and this time, we focused on the staff who actually really do the work. so we had great meetings with the staff, and we had an extremely good meeting with the army corps of engineers because when we went last year, everyone we talked to directed us to the army corps of engineers, and i think we have a good relationship here within the region, but getting to d.c. and actually talking to the

people who are actually in charge of the funding, of the decision making was absolutely wonderful, and i think they had, what, four, five people there to meet with us, and they were all very high level individuals, people who were actually the decision makers. they gave us great advice. they were very straightforward, very honest with us, and so they wanted to make sure that when we came back in two years, that they didn't lead us the wrong way. i said no, we'll be back next year. and so i really want to thank daly and brad for preparing us for all of these discussions well in advance. and daly couldn't make it, fortunately. we really missed you, but we got through it, and they were extremely good meetings. i do know with the army corps, they kind of mentioned the same

thing i mentioned during our discussion of the informational presentation on our seawall efforts. and that is it's a little confusing that we are just looking at three miles, we're not describing the 7.5 miles and how we're breaking out that -- the analysis and the study and what we're trying to do. they said -- 'cause we focused on 3.5 miles. they said well, i thought you had 7.5 miles. i said no, because of the seismic and da, da, da. also, because of the budget, they wanted to see how all of the money was going to be spent overall of the waterfront, not just here, so it it implores us to do a little bit of job explaining, but we had great materials. it was just amazing to see when we went last year to when we went this year. it was really wonderful t