finished. so what i did is i did an ec extensive review with my team of the work finished and the work that's left and for each station i examined what are the key elements of work that still need to be done and how much time will it take for these elements to be completed? based on that, i have prepared a few slides which kind of show in summary the work that's left to be done and the amount of time it would take and the longest one is the chinatown station. as you can see, i have listed some of the seven key elements that need to be completed. and with these things getting done, this station can be finished by june. and that is the commitment of the contractor and we, of course, have had discussions with the contractor and he has committed to finishing the job

by this date, as well. the next station, these stations are further advanced than chinatown and ums should be finished by april and those are the key tasks for that station that are left to be done. the ydm station also will be finished by april. we expect these things to be done. and then, the key activities that will take the longest and static integration with train control and all of those elements. and so once the contractor is finished with his job, then we get into the start-up trade testing, vehicle testing and get thgetting the cpu certification and safety certification. these are all activities that we are programming to take somewhere between 12 to 14

months. and we believe that this is a good schedule. i have looked at the time and i have experienced that myself on other projects and i would say that yes, there are projects that take even longer. we have a project in our area that is taking, maybe, two years, but i do not expect that to happen on our project and i feel that we have a good schedule and by summer of 2021, we should be able to run trains. so that's my presentation. a fina final slide is a completf june of 2020, revenue service, summer of 2021. thank you and if you have any questions, i would be happy to answer. >> just to be clear with everyone, when we settled this today voting on this, even though there are outstanding further claims, those claims cannot delay the project any further because of this

modification, correct. >> that is correct. >> and then related to that, you just presented a slide about testing. i know a lot of people a a question if we're getting a system in june of next year, one question is, can you open stations sooner and then, two is, you know, is there any way that testing window could be smaller? >> i'll answer the first one. so on the issue of opening stations sooner, i have heard suggestions that, perhaps, you could open the central subway and have it not stop at chinatown first and that's not something we think makes sense from a rider point of view. we've been talking about this subway as a connection to chinatown fochinatown for over d i think it would be confusing opening it one station first. but secondarily, i think talking

about testing systems, this is a system and though the construction work is due to be work in chinatown, i would be very wary of trying to open it piecemeal. out. >> i can add that i have had discussions with the contractor, with our own staff and we are also working closely with the operation staff and you've had discussions with julie and based on the experience they have had with some of the other projects that they have worked on, it seems like it would not be to our benefit to try to do it sooner because it's a safety issue. we also have to get cpu certification. these things take time and they have to be convinced and the other thing is, they're not committed to a schedule.

their focus is on safety and if it's not safe, they will not give us one day of slack. so that's why we have to make sure that we have the time that it takes to get this done. and the other thing i would say on the stations is that the stations are not that far apart. there's only a three-month gap between the two stations and chinatown. so we're not really gaining a lot about even thinking about opening a certain station before the other one. they should all be coming online about the same time. so it's good to open all of them. >> so i'll turn it to the rest of the directors? >> i do have several questions on this one. and maybe starting with the biggest one. we have a two-year delay here and that's very substantial. what caused it? >> well, i can give it a shot of what i have looked at.

number one, these are complicated projects and a lot of these projects get delayed. two years is not an abnormal delay for these projects, first of all. i know projects delayed even longer than that. and of this magnitude and complexity. the other thing is this was very complex and different and we had to be careful about doing the project safely. one of the critical safety areas was tumbling under market street, under the bart tunnel and muni tunnels. i don't know how much was factored in or not, but that's one thing. the second thing that was a very

complex operation was chinatown is in a very difficult and very congested urban environment, so the decision was made we're not going to cut this station, which is typically done. you open up the street and that's how you do construction. so this is the most difficult construction method which was mining from below. one of the things that happened was that there were unexpected conditions. the soil was much tougher to excavate than even the planning and the soil reports showed. so that took a lot longer. so that was one more thing. then the other thing is this was a design bid built project, not design build. what that means is if you make changes, you have to resign the changes and then the resign has to be given to the contractor and then that has to be constructed.

so that takes extra time. so while the advantage of design bid build is that you actually get the project the way you want it, but at the same time, you are giving up on delays if you make change. so those are some of the trade-offs and reasons it happened this way. >> yeah, i'm having a hard time squaring that. it's a complicated project. mining is not a new technology. it's done all over the world. my understanding was, there was a design change in the plaza at the chinatown station that had some kind of -- let me ask the question. how much of that two-area delay did that design change have do and did that design change have any cascading effect in other elements of the project? >> give us a slaye slide on the

chinatown station because it shows it graphically. the path depends on activities. one is concrete work and goes through the electrical and atcs and the line at the bottom which actually shows the delivery for the chinatown elevator. there's dus different factors at play here. number one, it's very difficult to get labor, so i know the contractor struggled to keep electricians on the property working. i know that was an issue with the chase center and other

buildings being built in the city. we knew there was a large amount of lead time with the elevator. it takes a year to get components on hand and that's a different function of the large amount of high rise on the west coast. the design change itself, just for transparency, it was the decision to make sure that the community's desire to have not just a station head house but a programmable plaza above the station -- that was a decision we did make after the project had begun. but it's hard to pull out and say the elevator was 40% and the supply chain was 30%. all of the things together are what pushed the completion date of chinatown to june 2020. >> did the resign have the

effect of putting the elevator on the critical path. >> it did. >> it did? >> it did. so that's a culprit, it seems to be and as you say, it's 40%, 70%. that at least is something that makes sense to me as the cause of such a significant delay. second question is, what is the estimated cost to complete the project today? >> we are working on it. we have some ideas. we don't have a solid number because we while we do have the climbs from thclaims from the ce have back-up, but we're looking at the escrow documents that the contractor has so we know the cost items.

so once we examine all of that, we will have a solid idea on what the numbers are. so if we have an estimate now, it's an estimate, it's a ballpark. >> that's what my question was, what's the estimated cost of completion? >> let me just lay it out for everybody. there's the 32 million that we're asking for your approval on today. and then there's the two other buckets of cost that was referred to. the additional cost claims that tutor and most importantly, the sub contractors might come in with and then there are other costs outside of the tutor contract costs, the agency's borne costs won', so those are e other two large buckets here. in addition to the 32, we've seen initial numbers from tutor and i don't think they're credible or worth discussing in public. we think that -- >> do you have a credible number in the alternative, though?

i mean, just so the public and the audience understands, and just so i understand, the action before us today is to resolve delay claims up to a certain date. it's not to resolve all claims that tutor and his contractor might have, correct. >> that's correct. >> as you said tom, that's bucket one. bucket two is wer when you takeo more years to build a project, you have to take mtas to do it, including you. so we should have an e estimatef that cost. >> the first one was the estimate of non-tutor costs which are mta plus our programme manager consultants and those are, again, order of magnitude, $20 million. >> to completion? >> to completion. >> ok. >> the second part -- >> and if you could put the slide up, the one i was keeping

track of the numbers, slide number six. >> so that remaining contingency is insufficient even to cover the staff cost, correct. >> that's correct. >> which is why -- and then whatever we negotiate with tutor and the subs is gobbing just how deep in the hole will we go? do you have a number on the order of magnitude of $50 million. >> 5-0? >> 5-0. >> is that inclusive? >> it is not. >> so we had tha add that to thd we've got 70 and we have 15 to apply to the 70. >> so now we have 55?

>> right. order of magnitude. >> that's the math. the estimate you have on delay, it's good to see that it has a contingency of three months? do you know the estimate behind that contingency? >> it's actually on us because if the contractor delays, he's l irklibel for liquidates damag. so that three months is built in as a contingency.

>> are the lds trigge triggerede end of the three months. >> june 29th. >> your contingency is after that? >> so if we get passed that delay point, there will be an argument about whose fault it was, this all likelihood. >> yes. >> two more questions, chair. you mense mentioned the other py in the region but i don't think it hurts to say it bart and bart has opened and extension to the warm spring's station in alameda county and santa clara is trying to open one and bart built the warm springs extension and santa clara built the santa clara

extension but both had trouble with testing. you indicated you didn't think we would have that kind of trouble and i just would like to know the source of your confidence. >> let me jump in on this, but i don't want to hold nadime fully accountable. so our approach is to make sure we're ready with an internal task force of folks who have deep understanding of all of the disciplines needed for testing, and all of the rail operations that are entitled. so we're forming that team now and clearing people's workloads and pre-meeting internally and trying to get folks absces and s to the tunnel. one of the things is we negotiated access to the parts of the station as part of the modification. so we're basically doing everything we can to prepare for that team to be ready to hit the

testing hard on day one. that's what we can control right now. >> let me ask one, i think, obvious question. have you talked to bart or vta about their experience and maybe learned a couple of lessons about let's not do it that way. >> this is the right time to start those conversations. >> ok, great. >> last question, and this is on your laundry list of potential suspects to get the money from. how large is the fund balance that you're referencing in the third bullet? >> we'll learn more that we'll be talking about in the fall. >> what is the courier budget. >> i'll acts our cfo to tell us the size of our fund balance. >> he's going to say it's zero, you watch. [ laughter ] >> no, i'm not, actually. i'm the cfo for the sfmta. the boar has a research policy

that we've maintained which is 10% of ou our operating budget d we committed to maintaining 1.2 billion, the operating budget, so we've had 120 million as a minimum target. actually, in the last couple of years, because we get a percentage of the city's general revenues and comes in higher than expected at the end of the last few fiscal years, that has grown. so i think we were reporting before it around 160 million and it may be a little higher than that. but we actually are still -- we have not yet closed the books on fiscal year '18-'19 and it's in that magnitude. and we're making sure we're doing a lot of things with the new financial system to nail down the components because part is defining -- i'm talking about

available fund balance. we have a lot more fund balance committed to different reimbursements that we've committed to. >> you would be ok with that decision? >> it is taking funds from realoreallocating operators. i feel like i'll provide you with options that will be a decision on which of the options to take. i'm not sure which recommendation i'll be taking. because any fund balance in excess of out reserve policy, there's a reserve and everything requires trade-offs. so i see that as a board

decision in the end. >> can i ask before you leave the podium, could you give us a quick refresher on the fund balance and how long we've had that policy because i don't think we've tapped into that in a number of years and most members were not on this board when we did that? >> well, i wasn't with the mta when the policy was established so this is what i've learned from joining in last year. we're planning to come before the board soon, probably in november, with a full discussion, not only the year-end close, but our reserve policy because we may be recommending an increase in that reserve policy. >> we can wait for that. i wanted to take a moment to remind everybody that this was a hard come-by decision to have that rainy day fund and how important it is. >> i should say, the fund balance was used during the last serious recession in order to maintain operations and came

close to zero at that time. and so, then, with good work from previous boards, my predecessor and lots of staff, that policy was established and we have managed to build back-up reserves. those reserves are for the use of when there's an urgent need and this is a need that the board wants to use it on, that's one of the possibilities. >> director bunkerman brinkman,t late yocongratulate you. there's always an emergency out there, but it is important to know where we are and if we're in excess, then we've at least got to talk about, not that we have to do it. i'll conclude with just the following comments. i do believe the recommendation before us today is a responsible course of action. no one likes overruns. no one likes delays. but what they like even less are

overruns when you don't tell them they're there and delays when you don't disclose them. i view the action today as the act of coming clean on what the finish line for this project is going to look like and how much it will cost and what the delays are going to be. so as this discussion disclosed within we have several stem steo take but we finally, for the project, after some hemming and hawing this area, we have a date and a cost estimate that passes the smell test and that's the first step towards restoring credibility for the project. so i would be willing to sort the iteming when it cup when ito making motions. >> dr. brinkman. >> thank you for the presentation. i know it took a lot of work for you to dig into this and give us

answers to these questions. i appreciate it. and on the same light as director hemming er's quest for transparency, we should remind the public when these bid processes come up, we are required to accept the lowest bid, aren't we. >> yes. >> even if there is experience wit contractor and things to consider, we don't have the opportunity to consider those. so i just wanted to remind the public of that and thank you for your hard work on this and i agree with director hemminger that this is something we need to move forward on. (please stand by).

the delay, but making design decisions like that, i don't think that that number was, that

that was expected when the decision was made. so i think the other dimension we should remember here, this project has been extremely impactful on the transat community and one of the things they have been doing, when not negotiating this and getting a handle on the costs of it and construction, to get the construction off the streets of chinatown and there is an important dimension here, too, that is, and perhaps this connects to director brinkman's low bid as well, less impactful on communities is really important because it will -- it will -- it will take a lot of risk at the project and that's something that's a little hard to predict at the time we make, whether it's a design decision or decision about whose bids we accept, that's an important dimension. it's one to remember. >> and we should at some point

in the future do a really thorough post-mortem on this project and understand the continuo continuous improvements, what mistakes could we not make next time, but a couple lessons learned you want to share with us right now in terms of tough, tough, hard-fought lessons learned in terms of cost overruns and delays. >> i think the thing i would say in terms of good project management, you always have to have your focus on cost and schedule, cost and schedule, cost and schedule. and what happens, a lot of times, well-intentioned program managers have a lot of other pressures and a lot of other needs, and i have faced that myself. i have faced situations where you are in the middle of construction and there is a pressure to add a station. so can you imagine if somebody

said add another station to this, this line was not long enough for that. but, those kind of things even happen. but the thing i would say is at the end of the project there is a requirement from the f.d.a. there is a lessons learned exercise and we will have to go through that, and we can look at what happened in this project and have some key lessons learned that we can share with the board. >> thank you. and thanks for your transparency and it's down the charts of the individual stations as well as the system timeline, really, really helpful. thanks for all your work on this. >> thanks very much. >> great. any other final questions among directors before we turn it over to the public to provide input? all right. rowen, followed by cat, and herbert, the only people to turn in speaker cards on this topic.

>> good afternoon, directors. roman katao. comments were hilarious, it's what should have happened, won't get into it now. northeast should have had a station. but i would like to first commend you all for bringing this amount of oversight and scrutiny that is long overdue to this project. one way that you know that this was overdue is that the unrevised completion date was in the past. the project is not complete and it was supposed to have been completed, very good sign that these things were not being revised in a timely and direct manner. i would also like to thank director brinkman for saying what i was thinking, very serious problems with state requirements around contractor

selection and i hope that this city will help push for legislation to address some of those problems because that ultimately is how these things are going to be fixed in the long-term. thank you. >> thank you. next speaker, please. >> cat carter. and then last herbert wiener. >> hello again, directors, cat carter, acting executive director for san francisco transit riders. we are let down by the delays and the cost overrun, our office is across the street from the station, and i want to go inside. san francisco cannot continue to be this bad in major projects. we are so far building all the infrastructure we need so desperately and the public is losing faith that san francisco can ever build a subway. it is really great to see that with changes at the leadership at the top that we are getting more honesty and transparency,

and i commend you for that, but baffling to me how it got this bad. we ask for a full assessment, a public dialogue how contracting public management, oversight happened. know what happened and why and how we can make sure it never happens again. sfmta has a lot of work to do to build back up public confidence so we can support future projects and the funding for them. thank you very much. >> thank you, next speaker, please. herbert wiener, jason, tony, and then chris. >> herbert wiener, weiner, instead of wiener. oh, see, you got it wrong. >> that's sfgovtv. >> any way, i appreciate it, commissioner heminger's attempts to get some clarification. now, this whole business about

accepting the lowest bid contractor, that is a trap because i believe there are all sorts of contingency with the lowest contractor. you know, there's going to be cost overruns, all sorts of expenses involved, and if i'm correct, 122 contract modifications, that's a lot. and the greatest peril is to the m.t.a. budget, because if you are going to have to pay extra amounts, are you -- is it going to detract from transportation? what is going to be the cost of thshgs you know, this is really disastrous, one boondoggle. now, people may state that you shouldn't name it after rose pack and the rest of it, i'm comfortable with it because it's the essence of rose pack, with contract overruns and shenanigans. so, i -- i really think that

this has really been a real disaster and boondoggle and the best thing you can say about this project is it never should have happened. thank you. >> next speaker, please. >> jason shomar, tony lao and chris mann. >> not sure if i'm supposed to speak on item 11 or 12, but here today representing chinatown trip, a volunteer organization focussed on improving transportation in chinatown and doing so since 1976. i'm here today to speak about the two-year delay for the central subway project and how this body needs to implement strategies to mitigate that impact. the past few years of construction has been brutal for the people of chinatown, and particularly those who depend on chinatown for in-language services and culturally relevant products. to compensate for the additional two years, the residents, merchants and visitors have to

endure. one of the strategies we want to see implemented is the creation of a shuttle bus program connecting neighborhoods with high asian populations such as the richmond, sunset, bay view and visitation valley to chinatown, especially on the weekends and not just during the morning and evening rush hours. let's make it easier for people to get to their medical appointments to visit their grandparents and to go back home with groceries, thank you. >> thank you. next speakers, please. tony lao, chris mann and rosa chan. >> hi, good afternoon, tony lao, board member from the china chamber of commerce and run a small business. i understand the safety concern we have, regarding to being the substation, and focus how the subway has been affecting chinatown's businesses and residential.

so, definitely for sure both residential and small businesses will slowly move out from chinatown because of this long construction duration, the noise level and air quality level around, and especially with the traffic. and then also this construction has been keeping a lot of residential and tourist visit from, to chinatown, and what i mean by local resident is meaning people living in san francisco, for example, myself, just because of the traffic and also the noise level. by doing that, so, the chinatown businesses definitely has decrease in revenue and definitely they have job, the employment opportunity for the local chinatown residents as well. so that's the reason why there will be more, i guess,

residential and all businesses to move from chinatown and there will be more vacancy in chinatown, i mean -- property value, everything will definitely go down. so, i definitely would like to see no more delay on this project and move on from it. thank you. >> chris mann and rosa chen, the last people who have turned in speaker cards. >> hi, good afternoon, directors. my name is chris mann, i'm a senior planner with chinatown community development center. echoing some other comments already. it is encouraging to see a definitive deadline for project completion, but this still does represent a much longer delay than anticipated, so we just hope that the agency can look at more mitigation options and resources to help the chinese community to see the project through and thrive while we wait for project completion.

thank you for your time. >> thank you. >> rosa chen. >> hello, director, rosa chen, i just wanted to talk about on top of what everyone else has said about, you know, how we choose our contractor with the lowest bid and how we need to fix that, on top of that, i think it's very important that we also talk about when we start a project we should really think about how it's going to affect the communities and how we have to add these mitigation funds into the project already so that it's already there instead of us scrambling to look for money constantly to figure out how can we help the merchants survive in the community, how do we help, not only chinatown but the effect of the union square businesses, affected every neighborhood along the line. and that, it's very important for us to really realize that, you know, chinatown is being very affected, with another

two-year delay, going to be more vacancies, more businesses are having to pay higher rent and it's getting harder and harder for them, so we need to come out and think of concrete ways to really make sure that it helps these businesses, maybe through advertisement, not just on sfmta but like local newspaper, on television, so that we can get more people to come back into the community and i think that's very important and will help many communities as well that's being affected by central subway. so, thank you. >> thank you. jake shumano, the last person to turn in a speaker card. >> good afternoon, directors. we own and operate the shell station at the corner of bryant and 4th street. i would like to say just through speaking to business owners down there as well, that there have been a lot of impacts to small business in that location aside from the chinatown community that's been so impacted by that

subway construction up there. ours is on grade, spoken to the owners of hotel utah, coin-op, as well as the grand club. all of them have expressed concerns about the duration of construction there as well. and then just speaking, oh, one more thing. the tunnel pops up under the freeway there, there is a rerouting of traffic, in order for cars headed southbound on 4th street to access the station they need to be in the left-hand lane. being out there at the station and operating it as asset manager, i've seen people in the right-hand lanes making a left hand turn to bryant street in front of our station. i think there needs to be better way finding signs out there. when the trains start running i think there will be more impacts and creates a huge amount of collision hazard. aside from that, as a citizen, to just be in the audience and hear that a portion of the subway could open three months earlier and serve a huge amount of people commuting to and from caltrans, etc., to the chase

center, but we are not going to do it because the chinatown station may not be opening is grossly inadequate, especially with the carry costs for the project and i would encourage we open as soon as possible. thank you. >> any other additional speakers who would like to speak for public comments? seeing none, closed. directors. >> thank you, thank you so much, thank you to the public for coming down and sharing all the comments. that has really interested me. if we can't open the subway earlier but all the surface construction is going to be done, and i know we have an operator shortage, and it's difficult, i wonder if we could run a bus service along the line to kind of get people used to the idea they'll have a one seat ride, not all the way through chinatown, that's horribly crowded but to scoop up the caltrain riders who would be

taking the bus, and the mass would not work out but the point of the previous speaker of getting people ready to go back into chinatown and especially on transit, it might be worth considering, how do we get people ready for the one seat ride from caltrain to chinatown. and i don't know the answer to this question, but the idea of how do we make sure that we keep businesses healthy and whole during these long construction projects. do value capture models take that into consideration when we are looking about what, at what this underground is going to bring to its route, do we have a way to almost shift that, ok, it's going to help them in the future, how do we, how do we capture some of that and apply it during the construction phase, and i don't know enough about the value capture models to know if it's even something that's included in there. but definitely worth looking

into. because the point was made instead of scrambling to figure out how we help the businesses when they are already impacted, it would be great on the front to help them. >> thank you, director brinkman, talking on the next item. >> happy to make a motion to approve that and thank everybody for their work on it. >> great, a second? anything else? if not, in favor of the contract modifications, motion passes. item 12, presentation construction regarding the san francisco construction mitigation program, proposed options for implementing the city-wide direct business support component of the program and use of the $5 million small business impact mitigation fund. >> appropriate item after what you just heard. update on the construction

mitigation program, knowing what's going on with the construction in the city and the development, the city is working to support small businesses through the long infrastructure projects. it's not a secret, unprecedented amount of both private and public development going on here in san francisco and as director brinkman brought up, a value and ultimate value to the infrastructure improvements that all departments are making throughout san francisco and we are trying to make this street safer, trying to improve transit for our riders across the system but there is an impact throughout the city. so, here is an example of just a couple of the major bond programs that have happened, so a major street bond in the city, transportation and road improvement bond, major sewer and water work throughout the city and most recently, the bond for work along the embarcadero and the waterfront. again, a significant public investment and lots of overlapping construction going on throughout the city. that doesn't even include all

the private development that's going on concurrently. so in 2017, the mayor directed the departments to come together to develop a construction mitigation plan and deal with the issues that small businesses have during the course of these projects. with the intent that during construction we do our best to mitigate the impacts that you just heard about to small businesses on major corridors. no one is going to deny there is impact to these projects, when they occur, reduced sidewalk access, disruption to parking and fewer customers in front of their businesses. we run sales tax models with the controller office, shows during a period of time loss of sales tax along these corridors, but as you know and many different transportation studies have shown on the back end there is recovery, but a period of time in which that occurs. so, we are going to try to do our best to mitigate that particular situation. the hard part about designing

this program is that project funds typically are not eligible for a lot of the things we would talk about. what we did, a best management practice study of major f.t.a. projects in los angeles and in minnesota. also looked at different academic studies with regard to major street projects and the program we implement across almost all the departments across the city and county of san francisco. so the public utilities commission, we here at the m.t.a. and the department of public works. on all projects when we are working on a commercial corridor, there will always be a point of contact for businesses. what we learned was to have during a major construction project businesses trying to contact the resident engineer or the project manager, when they are trying to manage the complexities of the project was difficult. and response times were slow. so, we will always have a specific contact for a business during the course of construction of a project. at that medium impact period where we see something that's

more than 12 months of disruption, when we can consider some of the things you talked about that just came up. marketing campaigns, we will now deploy ambassadors so people will be on the streets during that period so a business owner instead of trying to talk to a contractor or a foreman on the site actually has somebody day-to-day they can talk to where they see up and down the corridor to discuss issues and a specific business liaison at that point. our partners at the department, or the office of economic and workforce development will go out and educate businesses with regard to the programs and the support the city can provide during this period and then largely the subject of today when we do have major projects such as van ness and the central subway, we will talk about other things, contractor incentives to include in contracts so we have written specifications for that, creating community advisory committees with which we have done for the van ness project

and the last thing, directed business support which i will talk about in a few seconds. so since the implementation of the program, we have an m.o.u. so we are committed to move this forward and looked at different tools and methods with regard to advertising and different things that do or do not work. there is now a standard written specification the department of public works worked with us on. one of the biggest complaints prior to implementing the program was contractors keeping construction sites clean. that was the biggest, biggest concern, and so we made sure in our construction contracts that there is a specific condition that they do that, and that inspectors and resident engineers regularly check and make sure there is compliance, ambassadors will inform project managers or resident engineers if we are not complying. we have hired a full-time person who will manage the program in the m.t.a. day-to-day, working

specifically with project managers on developing specific plans prior to construction, so we are ready to go on day one as soon as construction starts. and we are also working with oewd, the point of today's discussion on finalizing some of the technical aspects of the program. so, here is some specific examples of projects, central subway project you just discussed, twin peaks tunnel, probably the first project where we fully implemented the suite of different things that we would do in this particular project and the van ness improvement project, so the buy local campaign, corridor marketing, we absolutely work on, businesses also often contact our public information officers or talk to ambassadors about cleanliness, making parking available, another major issue. so when a contractor reserves a parking space, sometimes they don't need those all day, so if we can make those available sooner during construction we will work to be able to do that,

and again, up front planning with merchants, definitely did that on twin peaks in advance, talking to them about what the anticipated impacts would be, and coming up with specific mitttation measures to work for that corridor. i want to stress not everything works in every particular corridor, different businesses or merchant groups need support so we work with them to come up with the specific package with he would use based on the standard template i just showed you. so, here are the things that we absolutely learned after implementing a couple of these projects. so, actually start earlier, even earlier than we had thought about starting before. typically we were talking about 90% design, or kind of post contract award, the contractor is on board and part is working through with the specific contractor for whom we have awarded bid to, working with them on the mitigation measures. cleanliness, where will you do work, where staging will occur,

so knowing that. we have decided to try to move that even earlier, during the 65% design period where we think we have a little bit more surety about where impacts will be. and our public information officers and our outreach staff will start the discussions with merchant groups around that period of time, so we don't want the dark where we go into construction, no one has heard from us and you get a 30-day notice and the disruption is created. we want to start the touch point with merchants in advance, so actually working to do that. now, education of businesses, we also found working with the office of economic and workforce development. a lot of businesses don't know about all the different programs the city offers. they are absolutely available during construction and even before construction. so a piece of feedback we have received from the board of supervisors as the transportation authority is start talking to them when you know the project will happen and we will follow through and start doing that.

so kind of lastly, the one outstanding point that we still have is as part of the discussion when there was an appropriation, which you approved and went to the board of supervisors earlier this year, a $5 million set aside for a construction mitigation fund. but we have directed business support, i showed you at the highest level project. we have done that one time and that was for the central subway project. when we first started this program. but it was sort of unnamed as to how we would use it, who would use it, what the criteria would be. so we spent a period of time working, doing two public hearings at the transportation authority with all the members of the board of supervisors, talking to our small business working group. went to the local merchants association and talked about this coming up, how is this going to work and make it most useful. the two criteria that we have

come up with, one, apply to only the largest projects, directed business support, so it should be at the level that we have discussed, those ones that are going to be 24 months that we know there is major disruption and that largely these funds be used for sfmta-led projects, the larger infrastructure projects here in san francisco. so, the feedback we have received after two full hearings with the board of supervisors, originally the proposal was use the funds in the way i have discussed the program. so, marketing opportunities, use it for marketing. so not impacting a project but just to the point where you are doing more construction mitigation than you are developing or delivering transportation improvements. so in some cases smaller level projects where the m.t.a. interest is paint or improvements on the street but a lot of other impacting

components of the project. and so we don't want to end up to a point we can't deliver transportation improvements because we are fully paying for mitigation measures. recommendation was use $5 million to augment the good things and the tools we know are working, because we don't want to impact project delivery. also use the funds for things that are typically not eligible for project funds, so again, one of the complexities in designing this program is for the purposes of the m.t.a., over our projects are federally funded, funded through local sales taxes or through either general obligation or revenue bonds. so the use for direct cash payment or supportive rent is typically not eligible, almost never eligible for that type of fund. in the case of the department of public works, they use a lot of general obligation bonds and use a lot of state funds that also have the restrictions. p.u.c. also has the difficulty with regard to rate payer funds and bonds they generate.

so, we have built and we have created a set aside in all project budgets for these things that are eligible, where we can do marketing, where we can do support, we can have a business liaison, we can have ambassadors. direct business support, though, is something we cannot do. so, this $5 million absolutely can be used for that purpose. so, that was the direction we got, and that's what the board told us. so don't use it for the existing elements with project funds, use it strictly for direct business support. feedback from the board of supervisors. the other thing you may or may not have read in the press, we had recommended because of the sustainability of this funding there be both directed grants and a revolving loan fund. it would be 0% interest, but we had considered in recommending that approach was one that this needs to be financially sustainable, meaning that as people pay back the funds, you

know, pay it forward, essentially supporting future projects that come in the city, and second, there are the situations i discussed where it is not an m.t.a.-led project, where we are a scope of work or element but still a city infrastructure project impact so again, on behalf of the city we would also want to provide support in those particular situations. so, that was one of the recommendations that we move forward and we had a proportion. then at that last transportation authority commission meeting, the board members also brought up that they would like to see, for central subway, anybody can go on the public website today, type in construction mitigation central subway, it will take you to the office of economic and work force development site and there are specific criteria. we are recommending that be maintained, it is what we have done in the past. the board members did ask that we consider amounts higher than the $10,000 in that particular

situation so we took that into account. that leads us, so that's the criteria which again is public. that leads us to today, the final element where we want to formalize the specific program with the office of economic and workforce development, through a memorandum of understanding between the departments, is continuing or having the option of a revolving loan fund, proportion when we went to the transportation authority was $3 million, $2 million being responsive, we are looking at more $4 million and $1 million, again, to at least establish it, have it in place and hopefully have something sustainable or the other option, use the entire 5 million strictly for grants and payments. so, those are the final two options. i've been before the transportation authority twice so prior to making a final decision on this we wanted to get feedback from the m.t.a. board. so, happy to take any questions and hear your thoughts.

>> ok. can you just -- because seems the crux of the issue, tease out again what types of things the funds, grant funds would be used for as opposed to loan funds? >> sure. so, for the central subway project, the specific grant funds were used for rent, for the period, for utilities, or for capital improvements. the staff from oewd can help me if i'm missing anything, we asked them to go through the process where we did a business evaluation to determine eligibility and need overall. that is the general criteria, allow the grant funds used for. >> the loan. actually, i could use some help on the loan. >> good afternoon. office of economic workforce development. for -- jorge rivas. for the central subway, the

loans were available but not part of the mitigation program. loans can be used for any operations, any of the costs generally by a business, and sometimes rent as well, labor, improvements, marketing, buying new equipment for the shop, whatever it may be. >> i'm sorry, before you leave the podium, jorge, for the loan program it's administered by the city and the county. how would loan eligibility be decided upon? seems like that's something that's not in our scope of work currently, so -- we would need somebody with some loan expertise. >> of course. so, currently we are building off based on the, building off on the loan fund, by main street launch, our partner here in the city and oakland, and we work closely with them setting up terms and how to best support

the small business, and currently looking at a model that says it's no risk, no, 0 interest loan, which works closely with the business owner so they don't have to necessarily show paperwork up front, but over time and measure the impact of the construction project on the small business. >> are the loans being offered, successful in terms of -- >> currently in our current model, 98% repayment percentage, so, very high. it's pretty successful. >> okay. thank you. >> other directors? i will say that this was a big issue, especially in the restaurant association for a lot of small businesses, the disruption is enormous, no one wants to eat at a restaurant where work is going on out in front of it, it's too noisy and too loud, and it's not always

clear the businesses are open. a restaurant had an outdoor space and planning a wedding on a saturday and found out we would have construction on the saturday and having to work with the oewe to make sure they can gain the revenue. so being more strategic how we do that, i think the outreach and feedback is getting to people sooner in the very beginning because people can make other choices. i think we have to realize we should notify the landlords, because the landlords before they sign leases with people, it would be unfortunate to sign a lease on a space and find out a few months later that you are going to have the major mitigation, major construction project that's going to impact you. something that's related, an off-shoot of this, one of the areas around the loan support, a lot of businesses do seismic retrofit, and i don't know if there's any way that some of that work can overlap with,