>> tuesday, march 23, 2021. president kimberly brandon called the meeting to order at 2:23 p.m. [roll call] >> clerk: madam president, all members of the commission are president. item 2 is the minutes of the february 22, 2021 port commission meeting. >> so moved. >> second. >> we have a motion and a second. can we please have a roll call vote. [roll call]

>> the motion passes unanimously, and the minutes of the march 9, 2021 meeting have been adopted. >> clerk: item number three is public comment on executive session. >> thank you. we will open the phone lines to take public comment on the item from members who are on the phone. >> clerk: thank you, president brandon. at this time, we will open the queue for anyone on the phone who would like to make public comment on executive session. please dial star, three if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until

their line is open. public comment will be limited to three minutes per american. the public comment line is open. please dial star, three to make public comment. >> thank you, jennica. do we have any public comment on the phone? >> president brandon, at this time, we have no listeners in the public wishing to make public comment. >> seeing no callers on the public comment line, comment comment is closed. next item, please. >> item four, motion to go into executive session. >> can we have a roll call,

>> i second that motion. >> thank you. we have a motion and a second. roll call vote. [roll call] >> all right. that brings us to item six, the pledge of allegiance. [pledge of allegiance]

>> item number seven is announcements. please be advised that members of the public have up to three minutes to make public comment. audio prompts will signal to dial in participants when their audio input has been enabled for commenting. please dial in when the item you wish to comment on is announced. please do note, if you're watching this meeting streaming on sfgovtv on the internet, there is a delay between the broadcast and when the item is

announced. dial 415-554-0001, and dial 187 d -- 187-691-0199, then pound, pound. press star, three when your item is called. that brings us to item eight, public comment on items not listed on the agenda. >> thank you. we will now open the pone line for public comment for items not listed on the agenda. >> thank you, president brandon. at this time, we will open the queue for anyone on the phone who would like to make public

comment on items not listed on the agenda. please dial star, three if you wish to make public comment. the system will let you know when your line is open, and others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star, three if you wish to make public comment. >> thank you, jennica. do we have anyone on the phone? >> president brandon, at this time, there are no public callers on the line wishing to make public comment. >> thank you. seeing no items on the public call-in line, public comment is now closed. please call the next item, please. >> that would be item nine, director's report. >> i am elaine forbes, the port director of the port of san

francisco. this last week marked one year of shelter in place and measures that we've had to take to fight the virus. i'm very proud the role the port has taken to fight and will continue to fight the virus. in my report today, i will provide economic recovery and equity updates, and i will update on the embarcadero safe navigation center and the jefferson street project. i will conclude by providing an in memory for ann halstead. at this time, we are looking at moving into the orange tier, which will allow for more activity. i am hopeful that the move to orange tier will bring back more economic activity to the waterfront. as you know, the pandemic has

brought unprecedented financial woes for our tenants and for the port as an enterprise. in a minute, you will hear from the port c.e.o. and the port's finance director who will present steps we must take in order to mitigate the economic impact to the port. staff and members of the public shared appreciation for our transparency and commitment to leaning in and confronting the looming challenges head on. while the future is looking brighter, the gradual reopening of business and activities will increase travel and interactions throughout san francisco. with the risk increasing, we need to remain vigilant to avoid community spread of the virus and an increase in cases and hospitalizations.

we must continue to wear masks, social distance, hand wash, and avoid large gatherings. public health officials will it be to monitor the key public health indicators, particularly case counts and hospitalizations, to ensure that san francisco has the necessary resources available for those who contract covid-19. this will influence what activities within the orange tier that can reopen and on what timeline. let's work together to make the success of our reopening a reality. while san francisco recognizes and is attempting to align with the state's framework, the city will continue on a reopening path based on its local health indicators and the unique challenges and success of its reopening. onto equity. first, i would like to open with acknowledging last week's events in atlanta which were truly, truly chilling. we also faced violence against

the asian community here in san francisco and in the bay area. the port stands in solidarity with our asian brothers and sisters, and we must do all we can to find xenophobia, misogyny, and this racism. our pacific islander community needs our support now more than ever. it is so important that all of us take a stand against the violence and hate. we are one community, and we must come together to standup for our brothers and sisters who are under attack. the unspeakable violence perpetrated in atlanta and right here at home in san francisco and around the bay area is an attack on all of us and on our core values. we must do better, we can do better. the port, the port's race equity team had -- continues to make progress to build a strong

foundation for our department wide equity initiative. we are pleased to share that staff hosted its first meeting with the port commission equity subcommittee. in this meeting, we shared our vision for equity, provided an overview of the short-term race equity action plans this year and proposed our implementation plan. i would like to thank president brandon and commissioner gilman for their service on this subcommittee, continued partnership and leadership. to assist with recording the port's milestones and challenges, staff are working with two rivers corporation, a women-owned small business

enterprise to develop a race equity tracker to generate reports that we will present to the port commission biannually. i'm also happy to report that the port welcomed over 400 participants to the port's annual open house. this provided an opportunity for small businesses to learn about the port's priorities and contract pipeline as well as to meet staff and other business owners. staff worked hard to pull off the virtual event. as always, the contract open house is a model of interdivisional collaboration, bringing together staff from across the port to connect with our l.b.e. partners. i would like to thank president brandon for her warm welcome remarks and her steadfast advocacy and support. two key items.

acknowledging president brandon's report on the embarcadero safe navigation center. this is operated as a covid negative covid unknown site. the capacity is limited now to # 8 guests to ensure compliance with social distancing protocols. referrals are handled through covid command centers, and that includes the public health system and street outreach teams. site operations and partners continue to work collaboratively with neighbors to as concerns. concerns the advisory group is meeting quarterly and getting answers to questions about issues at the site and also city services. in good news, the last count of unsheltered homeless people in the area conducted last month found 60 people in the outreach zone and 15 midges in the safety zone. this is a notable decrease from the 179 individuals in the outreach zone that were found

living unsheltered two years ago prior to the construction of the navigation center. overall police incidents in the safety zones from decreased. 2 jefferson street. this is phase two of jefferson street. the final three blocks of the five blocks of main street through fisherman's wharf will be completed this spring. the only exception so that is the guardrail along the inner lagoon, which has been delayed due to the seawall condition, covid, and cooperating with numerous city agencies. at this time, we estimate that the construction may not occur until late may or early june. in good news, the sfmta plans to run the f-line street car in mid may. i would also like to report

that the s.f.jeremiah o'brien returned to her birthplace this morning. staff had worked extraordinarily hard to remove debris and make repairs to allow for her safe return. the o'brien will remain closed as she's undergoing renovations. this is an important step for us in moving past the calamities of 2020. i would like to conclude my remarks in memory of ann halstead. ann serves on the port commission from 1984 to 1995,

the first woman to sit on the commission. she served as port commission from 1988 to 1990. ann lived her adult life in san francisco and was devoted to bringing people together to improve the city and vibrancy of the region. she was instrumental in helping the city secure funding to transform the embarcadero, and to push for the creation of the blue-greenway along the waterfront. ann was a feminist. she knew certain values went together. when proposition h was passed in 1990, commissioner halstead was the voice of the port commission to create a process that welcomed the engagement of

all to create our first waterfront land use plan. her devotion to the waterfront continued after stepping down from the port commission to lead the port northeast waterfront advisory committee before being appointed to the san francisco bay conservation and development commission, bcdc, which she served as vice chair prior to her passing. in addition to countless boards and commissions, she served on sfers from 1983 to 1997. in the words of former sfers president jim kappel, ann is a gentle giant, an individual so committed to social and environmental justice, a hero to so many, young women

especially. ann was a very gracious person, and the many of us who had the privilege to know her remembered her welcoming yet firm style. the port expresses its deep condolences to ann's husband and her family, and we'd like to close the meeting in her memory. this concludes my director's report. thank you. >> thank you, elaine. [inaudible]. >> anything about the meeting with the [inaudible]? >> i did not, commissioner brandon. that is a good one to cover. would you like me to say a few words? >> please. >> we were able to host the army corps of engineers here at port of san francisco. we had leadership from washington, d.c. present, along with district office leadership with our team to discuss the three by three waiver request that is going to washington,

d.c. a little bit later this year. president brandon joined us. we had an excellent conversation about our study and our partnership to date, and it was followed by a tour of the san francisco waterfront. >> thank you. thank you for your report. we will now open the phone lines to take public comment on the executive director's report for members of the public joining us on the phone, jennifer will be our operator and will provide instructions now for anyone on the phone who would like to provide public comment. >> thank you, president brandon. at this time, we will open the queue for anyone on the phone who would like to make public comment on the executive director's report. please dial star, three if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star, three if you

wish to make public comment. (. >> thank you, jennica. do we have any public commenters on the phone? >> yes, president brandon. we have one caller at the moment. thank you. unmuting the line now. >> hello, president brandon, director forbes, and commissioners, my name is faye tsen. as you know, ann cared very deeply about the waterfront. she was my predecessor on the

treasure island development committee. for those of us who sit on public commissions, you know what a responsibility, i would say privilege, it is to serve the city as stewards of the public realm, and ann was the exemplar of civic duty. she dedicated her life to making better her neighborhood, her city, her region. ann and i sat on the board of many nonprofit organizations, sfers, greenbelt alliance, the chinatown development corporation, just to name a few. we shared similar ideas, and working with her on these mutual passions, i found her to be always wise in her counsel, knowledge about organizational challenges, astute about the political lay of the land, and,

of course, above all, she was gracious and elegant. we've lost a friend, a great citizen committed to public life.

>> so many of you have written and spoken so passionately about ann halstead. so many of you will continue, especially about our seemingly

inexhaustible energy and her commitment to our waterfront. many of you at this meeting knew her very, very well. she was a lovely and remarkable woman. we all will miss her very much. i wanted to say a few words to add them to this meeting to honor ann, and also say that i'm serving as the chair of a committee that is cochaired by ann's husband, to acknowledge ann's life and efforts by staging a citywide dedication hopefully in may on the plaza. with your concurrence, we feel very confident that we can raise funds for this event as well as the dedication of the

inaugural class. we will work closely with the port and dan hodak in particular to design a commemorative plaque, and we forward to coming back to you in april to present more details related to the event and the design and the installation of the commemorative plaque. thank you so much for the opportunity for speaking today, and i really look forward to your support in this effort. thank you. >> thank you. are there any other callers on the line? >> president brandon, there are no other callers on the line wishing to make public comment. >> okay. seeing that there's no other callers on the line wishing to

make public comment, public comment is pleased. commissioner [inaudible]? >> thank you, director forbes, for that lovely report. it's been over a year since we've had to shelter in place, and i am looking forward to the coming months in san francisco. i did want to say a few words about ann. i met ann over a decade ago, and i met her through two iconic people representing the community that i love the most: north beach and chinatown. i met her through reverend

norman fong, sitting at her table. it was my first actual banquet at empress of china. weeks later, i ran into her on telegraph hill at a presentation to support other organizations that ann loved. ann took me around that room. she introduced me to people. ann became a friend, she became a mentor, and she became someone i could always turn to. i only hope as i serve on this commission, that i could live in her legacy for turning the public waterfront into a realm

for all of san francisco. ann was an icon for the city. i want to give my deepest condolences to her husband and to the community at large. i want to say i'm fully supportive of honoring ann with a plaque at the entry to fairy landing here at san francisco. i look forward to helping on that and doing anything i can, and say i'll truly miss here as a fellow san franciscan, as an urbanist, and as a fellow women. >> thank you so much. commissioner burton?

>> yeah. i've known annie for over 40 years. we've spent a lot of time together with wells and my old racquet ball partner.

my sympathy to wells. at the time he was struck with his cancer, and we never thought that he would live to see the day, nor would he, thought that he would outlive annie. i want to do what i can to support and raise money in her memory. she was a piece of cake, just a wonderful person, and i just loved her to death. >> thank you. [inaudible]. >> yeah, sorry. i don't know if you called on me earlier. i was having some audio difficulties going on for a while. i just wanted to say that i did

not know her very well, but when i was port commissioner, i remember her coming up to me in several different events and reminding me of her past association with the board. she struck me as an amazing person, and those were big foot steps to follow in her time at the waterfront. i just wanted to also use this time that i really appreciate director forbes mentioning all of the events happening to my fellow asian american community that have been happening the last couple of months. i think it's unfortunate that not only is it one community, but all communities such as this one because the

coronavirus has raised more tensions, and in many cases, the people who have been targeted are absolutely innocent. and in some cases, if it was designated against chinese, it's really a tragedy to see some of those things that happened in the bay area and across the country, culminating in georgia. i just want to says the port thinks about its equity and social document document -- say that as the port thinking about its equity and social position, i hope we can take a leadership position to speak up and do something in making sure that the community does come together, that we standup, and as we look at it from the

port's standpoint in our equity plans includes everyone in our community equally, and i just wanted to make that point and just say elaine, thank you, for emphasizing that today. it's been a sad week. there have been a lot of leaders who have spoken up across the country, and it's finally getting attention in washington. it's not just a few erratic situations, it's all across the country, and i think we all need to come together and realize that what we're experiencing is not the fault of one community or one country, but we need to come together with liberty and justice for all. thank you.

>> thank you. i want to assure you that our racial equity includes all communities of color, and we do not want racism against anyone, any community, so thank you so much for those words because i really agree with all you are saying. before i move onto vice president adams, i know there is staff that would like to say a few words about ann. [inaudible], did you have your hand raised? >> i did. i'm sorry i missed my little slot, but i first of all, wanted to thank you, president woo ho, for your words.

proposition h back in 1990 was a pretty controversial deal for the port, and through her grace, she showed that she's not just a great urbanist but a great humanist, too, in terms of welcoming the public into a public process that i was honored to be able to be involved in for the waterfront plan, but to show all of us what the real promise of the waterfront was and its relationship to the city and the region. and in all of the different roles that she played over the course of her life, that was her goal, was to bring people together in this special public place and to appreciate and support each other, so i just

want to thank ann for all of her guidance, her quiet, persistent, and gracious, you know, direction and support that she provided for so many, and, too, i will always remember her in my heart, so thank you for letting me speak. >> thank you for those kind words. is there anyone who would like to comment? okay. vice president adams. >> first of all, i didn't know ann halstead at all, but clearly, hearing everyone talking about her, she was an icon and treasure here in san francisco. when somebody passes away, there's a certain value that we

all have, and ann halstead, certainly, may she rest in piece. director forbes, i appreciate your words, and director woo ho. this needs to be called what it is: an attack of hate, attributable to the former president, calling it the wuhan flu and heating the debate. we have a social consciousness, and we have to speak out and call it what it is. it's unacceptable. i appreciate, commissioner woo ho, what you're saying about inclusion. i know that commissioner brandon and you are working on that, and also, we need to speak out about the horrible tragedy of the boulder police

officer who lost his life in boulder, colorado, and the other nine families. something is wrong with our country, and we have to speak out against this kind of violence, this kind of hate. we've got to be able to live our lives where we can go to a store, go to our work go anywhere we choose as americans and not feel that we're going to be shot or intimidated or assassinated, so i'm going to call it out for what it is, and i'm glad this commission is, too. may we remember them, the families, and also remember the police officers, not only in colorado, but every day that put their lives in the lines, and just the ordinary people working in the stores and just the ordinary people that want to go out. what's happening in georgia has been happening in our country the past year.

when politicians are afraid to speak out, speak truth to power, something is wrong, and we've got to call it what it is. some people are saying what happened in georgia wasn't a hate crime. it is a hate crime, and to me, violence against women is unacceptable. i'm glad that we on this port, we standup, and we speak to a better world. thank you. >> thank you, vice president adams. i just don't think i could have said it any better. there's so much going on in the world today, and we have to say that gun violence on anyone, whether it's a police officer, the women in atlanta, the families in boulder, we all

have to come together. it's just a really sad time right now, but director forbes, thank you so much for your report. it was very thorough. you covered a lot. the port has been extremely busy over the last couple of weeks. i want to say a few words about ann. as director forbes said, she was the first woman appointed to the port commission and the first female president of the port commission. when i was appointed to port commission in 1997, ann was one of the first people who reached out to me. ann was a wonderful person. we did a lot of work together on the waterfront land use plan and the adoption of it. we had joint meetings with bcdc. she became my mentor, she became my friend. i think the last time i saw her was at my 20 anniversary

celebration, and she showed up with warm words and open arms, and she will truly, truly be missed. she's just done so much for san francisco and for the waterfront, and i'm happy we are closing the meeting in her honor, and i'd also like to close the meeting in honor of the victims in atlanta and the victims in boulder, colorado, so thank you, everyone. carl, next item, please. >> good afternoon, president brandon, vice president adams, commissioners, and director forbes. i am katie patricione, the port

director of finance and administration. we are here for an informational presentation about two supplemental ordinances. amending the port's operating and capital budgets for fiscal year 21-22. as you know, we have a closed two-year budget, and this proposed legislation would make incremental changes to reflect the revenue decline that the port has experienced as a result of the covid-19 pandemic. this is a moment of great financial challenge and great financial uncertainty for the port. working with the controller's office, staff has developed a financial projection that suggests that it will take at least five years for the organization to rebound from the revenue losses that we have seen in the last year. we will continue to refine this forecast as we receive more

information about revenue, and as we see how the rollout of vaccines affects tourism, hospitality, and office use. these projections are our best guess today, but we know for a fact they will change, and we will update you as we do. the port faces a monumental task. we must restore the organization to financial stability in a way that ensures equity. this work will be difficult and will require creativity and determination. as you are going to hear this afternoon, staff proposes to tackle this challenge in two steps, starting with the budget changes that are in front of you this afternoon, and then, with a ten-month economic recovery initiative that will allow us to develop thoughtful

analytic proposals in the budget for fiscal years 22-23 and 23-24. the budget proposals that we are going to outline this afternoon are the product of a great deal of hard work by all of the port's divisions. i'm so appreciative of the organization's willingness to roll up its collective sleeves in the search for budget savings. i am also incredibly appreciative of the hard work that my two-person finance staff, nate and colela, have put into developing the two supplementals and all of the supporting material. now, i'm going to turn it over to nate to walk you through today's presentation. >> thank you, katie. nate cruz of the finance

division. let's go ahead and advance to the next slide. so before we get into the details of the supplemental that will be before you for a vote at the next meeting, it's worth looking at the port and through the bigger lens of the city overall. the economic impact of covid has been severe. as of march, the region in the metro area was down 80,000 jobs. initially, after the outbreak, it was down much more than that, so we've climbed back quite a bit, but we're still down 80,000 jobs. [please stand by]

volume will be there by the end of 24 but we won't see the spending return until the summer of 2025. when we take this timeline and apply it to the revenue history during covid we come up with the forecast. i have a line graph but more than recovery, to provide context, this graph goes back 15 years to 2005.

covid came around and it looked like we'll end this fiscal year somewhere back around $60 million where we were 15 years ago. you can see the recovery in medicine and those are forecast barrie ants and the pace of recovery slows as we wait for business and convention attend' that's that aspect of tourism to return. over all, that valley, that v-shape. when you compare that to what we might call a normal year, a pre pandemic revenue levels, a pre pandemic revenue level might have been $110 million and the $120 million peak had one-time revenue it. but compared to $110 million,

the revenue lost that would have been received have not been the pandemic is over $100 million. as you look back at the 2010 portion of the graph on the left, it doesn't even show up. it's merely a flattening of the line. that was last recession that we went through so, these are really unprecedented in times for us and we have to consider how to use our pre anxious precs resources. when we think about how to use those scarce resources, those revenue dollars, we're an enterprise agency and we need to operate and we've done so without any general fund support and we need to maintain our mission and our revenue capacity at the same time. we have a duty to the maritime industry and to provide for the life safety of all the waterfront visitors, at the same time, we need town vest in our

facilities so we can charge rent and exist and per duty as a perpetuity.capital investments t sufficient and before covid we have a one billion dollar backlog from a state of good repair perspective and we had been spending roughly 20 to $25 million a year to keep our facilities in good shape and we can't afford that any longer. and the final thing we need to consider is our fund balance. that's the port savings account and our reserve account and we've been relying on that heavily through the pandemic. we can't just spend that down to zero and we've been working on our and we made a number of

adjustments that you approved last summer. to summarize those quickly in the operating side, we reidentified 12.5 million of savings and largely through staffing adjustments. we created what you could probably think of as a soft hiring freeze, we were only filling vacant positions that were critical to revenue or life safety and when we did so we tried to prioritize internal promotions. we also eliminated the creation of a number planned new positions and in addition to the staffing adjustments we had expenditures for our pro

certainly ver ises contracting and equipment, service 0 other city departments and i.t. spending. on the capital side, we reduced by $29 million with the current fiscal year and largely by deferring the ports' investment in the mission bay ferry landing project. unfortunately that wasn't enough all by itself. we need to do quite a bit more so what's before you today is i'll cover this in the operating side as well as the capital side. the slide before you shows the adjustment and overview of the adjustments to the operating budget. on the salaries and benefits side, and it cost $1.8 million

and then we were able to identify additional savings to offset that by moving some port-funded position costs to non port funded positions or non port funded sources rather, if also those are going to be a last resort there's a rent adjustment so that's the result

of a market adjustment and materials and supplies and they are down because tour many of traffic along embarcadero and work orders show a increase just like the cost of living adjustments increases the ports salaries and benefit cost and it also increases those the department that's rewe lion ford mitigate the full increase cost because we also reduced work orders due to decreased traffic and a street maintenance work order as well as a cruise ship security because of the reduced calls we think less security services. the next adjustment is

problematic and $200,000 and to release because of the economic conditions, the likelihood of increased vacancy is real so i want to make sure we have the resources to get rent-paying tenants in those facilities so we've increased that project budget and the last adjustment is a minor one of an increase of $73,000 and that effects the south beach harbor and it's effecting all city employees. next slide, please. the capitol spaces is broken into two components and the first is this deappropriation effort.

we went through, port staff went through prior appropriations to try and identify places where we could recapture those funds we found from the projects in this slide and these are projects that are still certainly important projects and given our financial situations, we have a ler priority and the deputy risked every project that we had that we had funded and identified those that were most important and those which fell below and lastly, the

$11.5 million that the report had advanced to the resilience project when it was clear that litigation would low up their efforts to issue ponds and in this supplemental appropriation, the resilience project is baiag the court back so all told that's that's up with portion. next slide, please. the other adjustment to the upcoming years budget. the last slide was prior budgets or prior appropriations. so the changes are to the

project management office which is a staff of project managers dedicated delivering capital projects. we reduced $640,000 roughly from their budget by -- that reflects vacancy that were already in the office and as well as shifting some of their work to the resilience projects and some non port funded projects. we're also moving a fire protection engineer from the operating budget where it better fits. we're making no changes to the waterfront resilience program appropriations that is to cover expenses which are not eligible for bonds proceeds. we're not making any changes to the homeland grant match. we're adding a million dollars to the port's over all contingency that's to allow and deal with cost overruns on existing projects and that way we have a trallized con stinziano again see when there are calls on it for different projects. we can prioritize which ones can

benefit from the contingency and which ones might have to wait. we're also reinstituting the facility condition assessment project and we've where we see a team of engineers to really give us a granular look at the useful life of the different facilities and how much it would cost to replace it and what it really does is allows us to make a much more data driven decisions when we're making these capital investments. it's been exhausted because of the fire and also our property insurance is is inkeysing so we need to replenish this amount if there are any additional problems and awe new project for a separate contingency for

unforeseen products. it's an uncertain waterfront and things happen so any emergencies, any adc projects that might pop up, this is a separate contingency from the lines above and we have identified the responsible parties so, we're opening these funds can be largely reimbursed but as quickly as the jurisdiction in charge of the harbor and make sure the clean up was not enter by negotiation and that funding was available to move things forward quickly and no changes in the southern waterfront and southern waterfront future indication means unadjusted and the project upgrades allow obviousel to call on pier 80 and those will move

forward. so after the supplemental appropriation, there's still more work to do and this is a second step in what we're calling the economic recovery initiative. now, the results of that won't be seen until the next, the following budget years and fiscal year 22 and 23 and after that but the work to figure out what these improvements will be starts now to rethink and redesign how the port delivers its services and the ultimately come out as a more financially sustainable port and changes might include and these are just hypothetical new revenue sources that will be pursuing stimulus and other forms of federal state relief, grants or debt funding for the funding we cannot afford. we might identify operating savings like resizing the ports space or new locations and tele commuting and identify through streamlining workflows and

holding more positions vacant for longer than soft highering freeze again. we're looking at a inter fund borrowing situation where this is a new concept where we might be able to look to some of our sister agencies across the city to help us soften the blow of the covid-19 revenue short falls through an inter fund borrowing situation and that is still uncertain if that's going to workout at this point. as a last row sort, staff layoffs are also on the table. again, the effort to understand what these changes might look like is starting now. the effects would not be implemented the fiscal 22, 23, 24 budget was presented to you next february roughly. what it would be before you for approval. next slide, please. so, this is a complicated slide and i apologize for that. this slide shows sort of an over vow of port finances for the

next seven years, if we successfully implement this savings strategies that we talked about. the supplemental and the economic recovery initiatives savings that we need to accomplish. what you see walk through a year as an example is useful and the first column, fiscal year 2021, we started the year with a $68.5 million fund balance and showed the revenues coming in for the year and expenses going out for a net operating income or a loss of almost $50 million. we anticipate basically taking $48.4 million out of our fund balance leaving us with $20.2 million. it carries over the to next year with the revenues coming in and expenses going out and the fund changes across the years. the blue rectangle represents the savings initiatives so that's where you see that capital defunding in the first row and the blue area of

$38.3 million is critical and the new operating savings line, and some are on going savings and you see the savings continue in the out years and the future e.r.i. savings, the economic recovery initiatives savings are in that last blue years of the last row of that plumas area and you can see we can make capital appropriations and you can see the out years, capital appropriations of $15 million a year and and we build back our fund balance of $38 million and ultimately, when the recovery is through we still need to build back fund balance closer to $60 million and it's during the crisis floor you could think of but a long-term target

$160 million. next slide, please. so, as next steps, we'll be before you at the next hearing for approval of the supplemental appropriation budget. and it goes to the board of supervisors and that includes those step one savings that we identified and are baked into that supplemental appropriation. and then the deputies will begin the economic recovery initiative work in april and the work that goes into identifying those savings will be done over the next month. many months really. but implementation will come in the following budget cycle and fy22, 23, 24, obviously, we'll be before you with updates as the eri process sort of advances and more information is available. and with that, that's the end of my presentation and i'm happy to take questions.

before we move forward, can you tell us briefly when you guys did the port and the couplet were there any comments or concerns that we should be aware of? >> no, i think at the hearing we had comments that were largely appreciate of a of the hearings being so inclusive and making sure we have an opportunity to receive public comment and elaine, did you have any relation of feedback that would be useful for the commission? >> i do recall that staff asked questions about voluntary work furlough. that is something that voluntarily staff can take but it cannot be mandatory without a city wide effort so we clarified that. other than that, i would conquer

with nate. it was thanks for coming and explaining all the information and being transparent. staff has known we're facing financial challenges for some time just by looking at our portfolio and knew before covid-19 that port had financial challenges and so they were pleased to hear and concerned about the layoff news and were looking forward to that being a last resort and hopeful that we would find other strategies, obviously. >> great, thank you. i'm really happy we were proactive and went to the employees and the communities and told our story. thank you so much. ok, now let's and you open the phone lines and take public and members of the public who are joining us on the phone.

jennifer will be our operator and. >> at the time, we will cope the queue for anyone on the phone who with like to make public comment on items 10a. please dial star 3. the system when your line is open and others will wait on mute until they're line is open. comments will be limit today three minutes and dial star 3 if you wish to make public comment. >> there are no callers on the line wishing to make public comment. >> thank you. >> public comment is closed. commissioner. >> thank you, katie and nate for this report. i know you worked really hard

and looked under all the stones you could look at to come back with this difficult exercise. i think it's very telling to me that 15 years of progress that can be wiped out in just one year and in terms of revenue and it's very dramatic and impactful and i appreciate that slide. i know you have gone through lots of detail to prioritize all these various lines and i'm not going to go into impressions but there were a couple that i did have and a trade off i wanted to understand better. now, i understood and of course it feels prominent that we are going to experience a typical normal rate increase in our rent at pier 1. it's waterfront partners and our landlord so to speak and are we paying it to simon -- well, yes, i guess i said that correctly.

what we have done for our tenants and given our current situation it just seems to us that have we had a discussion to discuss how that rate can be slowed down given our circumstances since we have done so much work for our district tenants rather than just feel like this isn't the contract, and i'm a little surprised, also, to be honest, that we should have known about that 3 million when we prepared the budget to begin with if they were start to look at commercial rents in san francisco, that rate increase is probably going to be an outlier if not already, very soon. because rents are coming down. so, i just feel like that's an

item that i think we need to press back and have a conversation to see what we can do about that rent increase because it's a big number. a lower increase but we should not just accept as is and because we worked very hard with the other end and we're on the receiving end this time ourselves so that's comment your one. the other comment, which is a very tough one because i know it's very near and tear to several commission's hearts and the southern waterfront fund and we haven't touched that because we have delayed projects but i question is the projects that you have prioritized to proceed with that if we did not do them, that the state of repair would get worse and it would cost us more to repair. i think if we have projects that

we want to do that are near and tear to our hearts as the southern bue case should we not considering, eliminate, would we consider whether we do more trade off on that number. if it's just to beautify and not because we're trying to prevent more delaptation and i would suggest we look at this number too and see whether we can come in a little closer. those are the two lines that really, i looked at this, really sort of spoke to me about if you were going to i request that effort. i think those were the two that stood out for me whether we

needed to take another look and analyze and examine with the idea, with the philosophy that i are tick lated we're on the receiving end of the rent increase and on the other, it's whether in a difficult time, if we wait on some of the projects under the southern waterfront beautification fund, could we time them as far as going forward and i firstly think that

we may see the business and convention tourism resume a little faster but i certainly am not a perfect -- i'm not an expert. that would be a hope and i'm hoping ha tourism perhaps will return sooner than later to san francisco but that is something that has to reply out and that would just be an advantage if that took place. i'm going to end here because the phone is ringing here and making noise. >> thank you. so, i will -- i am not an expert on the process that we are engaging in with our landlord for pier 1. so, i might look to rebeca for a little assistance on what the lease speaks to in terms of the process and i can say that the

lease does in deed include a process for determining what the reset market rent will be. it involves a -- i'm having a senior moment. an assessment, yes -- [laughter] thank you, becca. and we're doing that right now and so that should take into account market conditions as of now and then we will compare the port -- we will have an appraisal and then we'll compare them and then if we are unable to get to an agreement then we will go into some kind of an arbitration process. beck a. i think you can probably

speak to this a little more elegantly than i can. >> good afternoon. rebeca from real estate and development. katie had it correct. they provided their offer of the rent which our finance team rightly and constructor actively included in the budget and we've asked that we have anna praiser look at it so we have an appraiser and they are involved in this process as well and they may use anna praiser of their own sort of market information and hopefully will agree on rent and if not we have to go through arbitration. we have go through this with our tenants. as well as waterfront plaza last year they went through a market rate reset with us where we did increase their rent through that market rate reset process and we're looking at all of the potential options on the table in terms of the negotiations. we're very cognizant of that shape that made showed us which

shows we're going to come out and it's going to take us time and the market rate reset for pier 1 occurs every 10 years so we have 10 years that we're thinking about really closely with nate and kady to troy to match all of our negotiation informs what we expect the revenues to be. so much more to report on that as we proceed. right now, we're engage in looking at the marketplace and other vacancies in pier 1 and leases signed around us. we're looking closely to make sure we get the best deal we can for the port. >> so you are not hearing what i try to say. you followed the process correctly 6789 and i appreciate the reset process and in normal times it wouldn't be an issue. we've gone out of our way, because it's not normal times, to figure out how to accommodate our tenants. we're not insolvent at this point but you can see the dramatic impact of what the

pandemic had on us. we said share the pain, share the prosperity in discussions. yes, there's the contract that is legalities and the attorneys can argue with each other in terms of how this process works. i just think that for us, and it seems like the number is a surprise, it came in this version of the budget. it didn't come no the earlier version so it's a surprise so it wasn't anticipated. so, why that happens, that's a whole different discussion, we don't have to go into that. i do think, given what it is and given our circumstances, it's not a question of did we follow the right process, and i am a process person, i think this is just sitting down and saying this is what we're all the circumstances we're doing, how can we figure out a way that works for you and us and not just say, forget everything else that's gone on in the world and last year, and we'll just follow exactly what the contract says.

that's what i'm talking about. so, it does mean that, and i'm giving you cover to say that we support that everyday to negotiate a better teal and i hope they support me in saying that pel. >> very good. >> so, is to you fund i would just say there were a number of years in which we s we should have been into the fund and we failed to do so and in some extent what you are seeing in terms of budget for reunification fund over the a catch up for where we owe the

fund from prior years. i'm not sure if that is helpful orb but it is definitely the case. >> i'm aware of that and so it's a tough and painful conversation to have when you are in the circumstances that we are, all i'm asking is to take a look at it and i understand that i wish we had spent the money when we had the money and now we don't have the money so it's a tough decision to make so i just think that in terms of balancing against the fact that keep we must have reserve and we cannot lose our ability to bond in the future so we have to make sure that we are keeping on what we can in possible and so i -- that's just my own suggestion is to take a look at it and i'm not saying take it out entirely, stretch it out and be creative.

we still want to continue on that path. i know we discussed it but we did not do when we had more money and i wish we had the money and we wouldn't have this painful discussion today but i think it's my fiduciary responsibility as a commission to point that out at this time. it's a little more, what i'm saying, there's a little more discretion to it than -- it's different than what we talked about as far as the rent increase so i leave it on those two items because they jump outside at me most in terms of where i thought i could make a contribution in the discussion. i appreciate you have worked hard on this and i know it's never easy and to go through the budgeting and i appreciate doing the right thing and we want them

to do the right thing and we want to do the right thing for the beautification fund as well. it's all timing. >> thank you very much for that and i will say that this is felt like a series of very choices we're making here. >> first of all i want to start, katie and seth, thanking you for all the hard work and diligence. it's obvious from the report and how you went through it and i have similar on the rent issue at commissioner that could be a place that provides support. this could be my blind spot so i apologize. prologic is -- i guess i'm confuse. i thought along the waterfront all of the fiscal assets,

technically, are part of the public trust support san francisco and so with prologic be our master tenant who has been leasing back to us? i'm trying to under the leasing relationship? >> yes. >> they can't be the owner, they must be the master tenant? >> correct. >> so then i do want to say i do think -- i want to advise push back regardless of the appraisal and the office rental market because i disagree with the controller's assessment of tele coming back. it showed on your slide it was 23 or 24. it's just more in other work i do, in my day job i'm not sure only 10% office work returning that robustly to san francisco is -- i'm much more weary about that. i think than the numbers you showed out that came out of the controller office particularly

with mtv and abag looking for the reductions they're looking for over all for the bay. to talk about the amount of increase and whether the increase should be suspended and kicking at a later date so i think we should explore that and they are our master -- someone needed a duel role and there's a master tenant and i want to look at if there's rent load and other sites to us, et cetera, before we enter into this rent increase and it just at this point seems a little absurd particularly if there's any funds that are owed to us from them. or other projects or for the master lease and anything they have on port property and i hope we can explore that and look into that. and then the only other thing i was going to know was just, i do not think the return to work will be as robust.

i grow that business and tourism will pick up faster and there's pent up demand and i'm really concerned about office and over all for the city and vacancies are down and so, i just, you know, want us, for our own office that we manage and the fact that our businesses rely on staffing, in the city, being in the financial district and it drives other business enterprises on the port and i think the controller is beg optimistic that those were my two comments and i want to thank the staff and the department division heads for doing the exercise and i know how hard this could be. and just one last question. on the possibility my understanding was those are

vacancies and i just wanted to clarify that. >> the vacancies that we're carrying in the project management office are staff who are managing capital projects so delivery of capital projects and not working on development projects so, the development projects are going to ultimately be an economic engine for us and we are really trying to focus resources on places where we know ultimate low they will help -- help us make money sothere s a result of those vacancies. >> thank you. i assume also, i know whether

staff -- and we're doing that crosswalk to have equitable distribution with how we balance our own books and move forward with projects we need to do. >> looking at all of these decisions through an equity lens whether it's reduction of projects or if we end up in a place where we have to effect layoffs and i'm very conscious of wanting to do that in as equitable a manner as possible. >> thank you, again, to all the staff in your team for all diligence you put no this presentation. thank you. >> thank you. >> no comment. >> thank you. vice president -- >> thank you for the

presentation. madam president, i'd like to get the executive director's feedback. >> certainly. this is the most difficult financial charge that the port has faced. i think staff has done a very, very good job balancing with what we call low-hanging fruit. this is a supplemental that adjusts the budget you already approved. given the grave situation we're face tag this balanced budget does include up to five layoffs, we're hoping to avoid those five layoffs with other balancing strategies primarily layoffs and resignations in and the following years the financial challenges are more extreme and it will be more difficult to

avoid layoffs so, getting stimulus funding is important and the first strategy we'd like to deploy but we're really facing the most dire, significant downturn, the port has faced and the line graph is an important graph to show that in the last downturn, our revenues were essentially flat. this is not the situation now. so those would be my primary comments but i think port staff has done an excellent job balancing where what we call low-hanging fruit and cutting tremendous amounts, almost $40 million out of capital, et cetera, in order to about the and move forward with only up to five layoffs. >> thank you, director forbes. and as i said, katie and nate, they laid it out and i wanted to hear from you. at the end of the day, what

would we rather face? what is behind us. what is in front of us. and i think katie and nate and director forbes, you just laid out the truth unvarnished and that's what we needed to hear, as painful as it is. and commission, i agree with where your point is but this commission, we have to make some he decisions and they're going to be painful. that's our job. that's why the mayor appointed us to make these tough decision and we have the brain power and we're going to do what we have to do and i just appreciate the staff bringing it to us and no one can play monday morning quarterback, we haven't been here. lock around at the city of all the businesses that are boarded up in this city and everybody that is feeling the pain and we are not immune from feeling pain

too. is i have a better understanding and the truth is laid out to us and as a commission, we have to decide to lead to the path of resistance and not a decision. we have to make a decision, stand behind it and own it. thank you. >> thank you, vice president adams. and thank you katie and nate and the whole team for putting this presentation together. i know this was extremely hard and extremely difficult and painful because just to see, you know, where we were and where we

are and where we still have to go is difficult. i have the same concerns the commissioners and not knowing that was coming up right now and i think as you guys have done, we continued to look at out of the box ideas and so i recommend that we have a conversation to see if we can see layer do something to -- because we're going to have to work with our tenants and we do have a bottom less balance sheet, as we can see. regarding the southern waterfront and the beautification funds, as we see over the past year we've not spent much money. and as we can see, most is

coming from the seven waterfront. during this time maritime has really saved us. our revenues have come from maritime. and so, we're defunding what has saved us, so you know, we keep taking our focus away from infrastructure and building up our maritime industry that is now saving us because there is no tourist so we have to be mindful of where we invest in our recovery. the funds are not used for just beautification. we use those funds to finish the park, we're using those funds to funds our loans programs to get through it.

so, the staff is making extremely hard decisions and which comes to, i know that we have policies so how do these decisions affect our policies as far as the capital investments policy requiring 25% of operating revenue to be satisfied and operating reserve equal to 15% of operating expenses. so how does this new proposed budget effect that and are you asking us to change our policies? >> i believe the staff report addresses this very briefly and you are correct, commissioner brandon, that we are not able right now to meet the policy of

setting aside 25% of net revenue for capital for the 15% reserve requirement. so, we do not in no way that we for the fiscal '21 and '22 budget and that would be with one requesting approval.

so, based on that policy, what you are asking of us, would be final numbers, so, for reserve .>> so, such an excellent question and one that i am not prepared to answer one we can get the answer to so if not needing those policies where are we.

>> clerk: 11a request approval of a resolution recommending the board of supervisors approve the mission rock community facilities district financing and including the issuance of bonds and an aggregated principal amount not to exceed $68 million and the execution and deliver row of financing documents including one the form of bond purchase agreements and the form of first supplemental to fiscal agency agreement and continuing disclosure certificate and form of preliminary official statements and authorization and directing the executive director to cause the package to be submitted to the board of supervisors and to work with the director of the office of public financial to finalize the distribution of the preliminary official statement and the issuance of bonds and this is resolution 21-11.

>> thank you, >> good afternoon, president brandon, vice president adams, commissioners. my name is raven anderson. i'm a project manager with the port's real estate and development team. i'm here to present this request for your approval of a resolution recommending a second mission rock community facilities district public financing. next slide, please. and next slide again. in september 2019, after many years of hard work from the developer, the port, and the city, the port approved the mission rock phase one funding, shown here. horizontal and vertical construction is well underway, which is exciting. this includes residential buildings with 537 new homes, including 199 new below market

rate units. it also includes two office buildings with over 550,000 square feet of office buildings. one of these buildings is also exploring science research buildings. 5.5 open spaces and parks, including china basin open park. horizontal work is approximately 25% complete and two vertical buildings, building a and building g, are currently under construction. next slide, please. this slide shows the overall financing structure of the mission rock project. at the bottom of the graphic, you can see the early sources of funding for mission rock. these include developer and port equity, which are the earliest sources of funding. developer equity is used to fund the horizontal infrastructure including roads,

sewers, and other utilities, and this is subject to an 18% return. other sources of funding include the land value of the vertical parcels, such as the four prepaid ground leases for the buildings i described earlier, and the final source of funds is made up to two special tax district, the community facilities district or c.f.d. they're a special assessment on top of the standard property tax assessment and i.f.d. or infrastructure development captures the infrastructure as it's developed. they're both designed to pay the developer for the early funding sources, including the 18% developer return. to limit this return, the port's strategy is always to use the c.f.d.-i.f.d. sources

whenever possible. essentially, we always want to replace that 18% return with lower interest bonded debt. next slide, please. here's a high-level overview of the phase one budget as it was approved by the port commission in september 2019. the total cost for this phase is 265.5 million. of that, 145.4 million are in reimbursement development costs and the rest is in development and return. these are figures from 2019, and due to delays on horizontal permitting and the bond issuance, it's possible the return amount here shown may have changed. staff will be bringing a more detailed presentation to the commission in the next few months. we have the prepaid lease

value, including c.f.d. bond proceeds as well as pay-go taxes, which are just c.f.d. and i.f.d. taxes that we do not form into bonds. so this bond issuance uses the c.f.d. as it providary source, specifically, the development tax. there are four types of special taxes c.f.d.s as mission rock, as you can see on the slide, and this allows tax increment in the i.f.d. allows it to offset the special taxes by pledging tax increment to the debt service of the bonds. this increases the value of the port vaez canned by reducing the long-term tax burden on the site. next slide, please. the amount of bonds that can be sold is limited by two factors.

the first is on the going special tax paid by the tax owners and the second is the c.f.d. itself. for the first approved bond sale, which the port commission approved in october 2020, the development special tax capacity from the first four parcels far exceeds the debt service coverage required for the initial bonds. the max taxes that can be charged on these parcels comes to $14 million per year, while the next bond is just $1.8 million in that first year, so there's signature capacity there, and we will always size bonds and debt service coverage required to the amount of revenues available. so the limiting factor for that

first issue waens was the appraised value of the c.f.d. leasehold itself. the city has a policy of only issuing c.f.d. debt with at least a three-to-one please fall ratio. so it must be three times the amount of bonds and any other special tax debt. next slide, please. that value of the c.f.d. as established by appraisal is why we have the opportunity for a second round of special tax bonds for mission rock. it exceeds the first issuance amount, and the appraised value of the c.f.d. at that time was 130 million. since then, the developer has received their permits, their notice to proceed, and they've

begun making significant investments on both horizontal and vertical improvements at the site, including paying two quite large impact fees on the vert al parcels. based on this spending, the latest draft appraisal, which has a date of february 21, 2021, estimates the value of the c.f.d. leasehold to be$334 million, so over a $200 million increase. that $334 million amount divided by three gives us a maximum of 111.3 million in phase one bonds, so staff is recommending a second issuance of up to $68 million. $68 million plus $43 million gets us to that 111 million figure. that $68 million figure could

come down as we work with the city's department of finance and developer, and those factors could result in issuing less than the 68 million when we get close to bond sale. fundamentally, we want to make sure that the size is appropriate to relatively small but valuable size of the district, but given the rate of spend and the development progress at the site, we think it's worthwhile to request the maximum authorization at this point. that additional $68 million would have significant benefits to the project's economics by allowing us to replace that developer return with low interest public financing. that will allow us to confirm our land values in later phases. the project has also

encountered some delays in permitting, and the first bond sale which somewhat offset this good news. the development team and port staff are monitoring these impacts and will come back to the commission with a full report on where things stand in the next few months. next slide, please. this is a high level of the sources and uses from this proposed issuance. the sale of $68 million in bonds could result in resources of total 71.1 million debt premium. the main uses for this amount would be towards project improvement fund in order to repay eligible development costs, mainly horizontal infrastructure costs. next slide, please. during the informational item on this issuance two weeks ago,

commissioner woo hohad asked about potential increase in rates. you can see on the table on this slide that this would take us from $64.4 million to $56.7 million in proceeds with a borrowing rate of 4.7%. this would result in a decrease of 7.7 million in bond proceeds, but our goal is to always replace that 18% developer return with public finances, so even though that would be a decrease in the total amount of public financing, it would allow us to move forward in pretty much any foreseeable rate environment. so as such, staff is asking your approve asking that the

board of supervisors approve the project moving forward as well as the form of financing document and authorizing and directing the executive director to cause the package to be submitted to the board and to work with the office of public finance to finalize and distribute the preliminary official statement and the statement of bonds. staff are aiming to get all the required legislative approvals this spring before budget hearings and the board of supervisors summer recess. that would give us time to price close and issue the bonds during the summer. thank you, commissioners. that concludes my presentation. i'm here with rebecca bendesini, and phil williamson, the senior director at project mission rock, to answer your questions.

thank you. >> thank you for your presentation. commissioners, can i have a motion? >> so moved. >> second. >> now let's open it up for public comment. we will open the phone lines to take public comment on item 11-a. members of the public on the phones, jennica will be our operator and provide instructions for anyone who would like to provide public comment. >> thank you, president brandon. at this time, we will open the queue for anyone on the phone who would like to make public comment on 11-a. please dial star, three if you wish to make public comment. the system will let you know when the line is open. others will wait on mute until their turn it open. please dial star, three if you wish to make public comment. >> thank you, jennica.

is there any public callers on the phone? >> president brandon, there are no callers on the line wishing to make public comment. >> thank you. seeing no callers on the line, public comment is closed. commissioner gilman? >> thank you so much for the staff report, and you did a great informational before. i have no questions, and i'm supportive of the item. >> thank you. commissioner barton? >> yeah, i have two questions. i hope they're not late. who's going to buy these bonds? >> thank you, commissioner. it's rebecca bendesini. raven, would you like me to begin the answer? >> yes. >> thank you. commissioner, because the bonds are unrated, we expect that institutional investors will

purchase bonds: insurance companies, investment companies. raven, just in and correct me if i am wrong, but that's what we've understood from d.p.f., department of public finance. >> and what's the rate that the bonds are going to pay? >> thank you, commissioner. we don't know it rate, but raven, you did have the range at what our consultants at p.s.m. had started to give us. >> we're estimating a range of 3.25 to 4% on these. >> okay. and just one question -- i

apologize. it might be late, but i was there -- it was a long time [inaudible] and a very good piece of property, and half of the people are working at home, and according to the guy who owns my building, it's kind of tough on this kind of rental

business. now what effect does covid -- i'm sure it wasn't taken into consideration with anything with the giants because nobody knew about it. but there's an awful lot of office space that's going up for sale or for rent or for leasing existing office buildings. will that in some way have any adverse effect on what we're hoping to reap from this situation? >> thank you, commissioner. really good questions that we've been asking and are -- the office of public finance has been asking. >> did anybody answer it? >> oh, yes. i'm sorry. can you hear me? >> i'm sorry. i'm a wise ass.

>> no problem. it's rebecca bendesini. we have layers of protection. the first thing that everybody needs to know is we are the general fund, the harbor fund. none of our funds are at risk the rest of the land at lot a, which is under the lease to the master developer, they are on the hook to pay the taxes or they would be found to be in default under their lease, so we're relying on their extreme economic incentive to hold onto their leaseholds. they have now paid for the leaseholds for the four building sites, and as raven mentioned, they've spent hundreds of millions of dollars to start permitting and start

construction. mission rock is very pleased to have one of the office buildings preleased. they're marketing the second building, as raven mentioned, potentially to life sciences, and there's two apartment sites. >> they're preleased? >> one of the sites is preleased. >> i'm sorry. was it the building or residential sites preleased? >> those are not leased. those, when they're completed in 18 months to 24 months, they hope to lease them much closer to completion. it's their belief that the market will be there when the buildings are ready. >> okay. just one last question. did they make their best precovid or post covid? >> both.

so the first building was leased to visa, but the subsequent three buildings -- mission rock have made their bet despite covid. they've decided to continue with construction and shoulder the construction costs. they've straddled construction and leasing costs. we're grateful to see the rates are still okay in terms of what the bond will sell for. >> okay. thank you very much. >> of course. >> thank you. commissioner woo ho? >> yeah, i think i'm fine. i think all the questions have been asked, and i think we've already had a discussion on this last time, so i don't have any further questions at this time. i'm supportive, and i think we

should go after the bond now while we're still in a position to go after bonding. and while we hoped that we had done this sooner, the interest rate would be even lower, and we could take more out of it, but it is what it is, and the rate that's presented is still -- helped us to reduce the developer return, and so that still makes good economics for us, so i'm supportive. >> thank you. vice president adams? >> president brandon, i have no questions. i'm supportive, and all of my questions have been answered. >> great. thank you, raven, for the great report. i guess my only question is who is the underwriter? >> raven, do you want to go ahead and answer that? >> sure. so stiefel is the underwriter.

they were selected via citywide r.f.p. by the office of department finance. the comanager has since shed its municipal securities business, so i believe now it's just stiefel as the underwriter. >> okay. we have a motion and a second. can we have a roll call. >> clerk: absolutely. [roll call] >> motion passes unanimously. resolution 2111 is adopted. call the next item, please.

>> that would be item 11-b, which requests approval to amend and restate the existing memorandum of understanding for a [inaudible] in support of the city's public health response to covid-19 to one, extend the term until the later of october 31, 2021 or the end of the mayor's emergency health declaration; and two, clarify that rent for use of the site is due for the entire term beginning april 2020. this is resolution number 2112. >> good afternoon, president brandon and commissioners. rebecca bendesini, here to present this m.o.u. i want to recognize the entire cost recovery team. i will be presenting this item

with star kay hahn from covid command. let's go ahead and go to the next slide and i'll talk about what we're going to present to you today. before you is to approve a restated m.o.u. for seawall lot 344. i'll present the terms of the amended and restated m.o.u. and then star will provide the operational update, and we'll come back for q&a at the end of the next slide, please. you all will remember this m.o.u. which we executed last year, it's with the human services agency. it's to provide a temporary shelter site. there are only two key changes to the m.o.u. that we're asking for approval today. first is to extend the term to the later of october 21, 2021 or the end of the health emergency. the current m.o.u. expires april 30 this year. we also are clarifying that rent is due for the site when

the m.o.u. was originally approved by the court commission, we were directed to go seek cost recovery through all available covid grants. when we entered that last year in april, the city was just standing up a very robust response to fight the virus, and the port was doing its part by entering into agreements to be part of the solution in the hope that other city agencies would work with us to get cost recovery for port property when the funds were available, and we're now at the point where we think they're going to be available. next slide, please. you all know the background very well. february 23 was when the local emergency declaration was called back in 2020.

we entered the m.o.u. last year, april. the m.o.u., we've had many presentations about port's response to covid. you all will know that port maintenance and other city agencies worked very quickly and hard to standup the site, getting about 120 park mobile homes and r.v.'s for potential tenants who were living on the streets and needed a space to reside safely who are over age 60 or have underlying medical conditions that make them more susceptible. we're requesting your approval today for some key reasons. i wanted to recognize randy

quezada and renee hoshima. they've had a ten-month track record of very good operations. we're really grateful that the cost recovery team, who works closely with fema, has understood that the parameter rents that the port charges is market rate and can be part of the cost recovery packages. the m.o.u. as amended and once we're able to gain approval will be due, the total rent for that total portion of the site of seawall lot 44 is a little more than 352,000.

next slide, please. so star, i'd love to hand it over to you, and we'll both be available for question-and-answer at the end. >> thank you very much, rebecca. thank you very much, president boston marathon don and vice president adams. i want to thank you for taking time to hear from the human services agency on the operations. i'm currently one of the commanders here at the covid command center. you can see that i'm deployed here at the moscone center with my mask on. i've been here since march 17, when we began standing up the alternative shelter program where the r.v.s are situated.

we utilized 91 trailers that were donated by the state as well as 29 trailers that the city purchased through central shops. all are managed through h.s.a.s facilities management division. we quinnly began accepting guests into the program, and that started on may 13. there are a total of is 20 residential trailers there, with 117 currently in use. we keep three trailers offline in case someone has to move, we have somewhere to move them to. program management of the site transitioned from the c.c.c. to the department of homelessness and supportive housing last month, and program operations from the very beginning have been provided by a community based organization under

contract with h.s.h. as of yesterday, we had 118 guests on-site. we've had 49 guests exit the site, seven of which went to permanent housing, which is a positive outcome. the majority of our exits were voluntary, so people would just abandon their site, and we don't have necessarily great data on where they went. we have one that went to the hospital, one that had a safety issue, and two that passed away. d.p.h. is on-site providing health services kwies a week, and we have security under contract with v.i.p. for on-site private security. next slide. district 10 residents may be referred right from the street, from temporary shelter resources, or from the

generalings safe sleep program. as a shelter site, the program continues to prioritize covid vulnerable individuals. d.p.h. staff are supporting guests with scheduling their vaccine appointments as soon as they're eligible, so they're reaching out to guests that were there, and as of yesterday, we have six guests that received their first doses, and 11 have received their first doses. so we identify guests through multiple sources, including bayview-hunters point providers, the homeless outreach time and data systems that we use to identify the most vulnerable people in shelter. and then finally, the last slide, this is a recent photo of the site, and i just want to say we're incredibly grateful to be working in partnership with the port to provide the critical shelter in place

services it offers the residents of-s 10 during the pandemic. and we continue to partner with the community and engage with business owners. we work closely to make sure that any complaints that we're hearing about, we follow up on. finally,i just want to thank the port for your on going support of this critical program, and i'll hand it back to you, rebecca. >> thank you so much. that concludes our presentation, and i'm happy to answer any questions. >> thank you for your presentation. commissioners, can i have a motion? >> so moved. >> second. >> okay. let's open it up for public comment. we will open up the phone lines

to take public comment on item 11-b. >> thank you, president brandon. at this time, we will open the queue for anyone on the phone who would like to make public comment on item 11-b. please dial star, three if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star, three if you wish to make public comment. >> thank you, jennica. do we have anyone on the phone? >> president brandon, at this time, there are no callers on the line wishing to make public comment on this item. >> thank you. seeing no callers on the phone, public comment is closed. commissioner woo ho? >> thank you. thank you very much for this report. i mean, i think this is now an

action item. we have the information, and today, i think some of the questions that we asked, we have the answered today. i have no further questions and am supportive of the item. >> thank you. commissioner gilman? >> hi, thank you. i'm support of the item, but i actually do have a couple of questions. so this is more for katie and port staff. we will be reimbursed from the very first day we entered into the m.o.u.? >> am. sorry, becca. >> it's okay. >> we have been working with the controller's staff as well as the cost recovery staff. and the way this is going to work is the port is going to invoice h.s.a. for prior rent

reaching back to the beginning of the agreement, and once we invoice them, they will pay the port, and then, the city will submit proof of payment, essentially, to fema to request federal government reimbursement. >> okay. great. i mean, that's what i assumed, but i just wanted to make sure that's correct. i think just to note from my fellow commissioners, and seeing in the staff report, under the biden-harris administration, the city is receiving 100% fema reimbursement where under the trump administration, we were paying 25% from the general fund. so i just wanted to note for our commissioners that it's all federal funds and a little bit of stimulus that we're getting for this one thing. and then, another question, i don't know if you can answer this. this is a question, i guess,

for you is has there been any consideration -- and i'm not trying to put the cart before the horse, but has there been any consideration of using the site beyond the pandemic and beyond the emergency, which we -- you know, female a -- you know, or fema reimbursement of october 31? >> that would be up to the department of homelessness and supportive housing to really think about if they would like to continue that beyond the council of human services. it may be that folks would want to keep that program going, so i think that is an open question right now, and that's something i could follow up with on h.s.h. as they're looking at their entire portfolio and budget as to what they would want to do, and of course, contingent on port authority around that, and yeah, so that's something i think they would be open to considering. >> yeah, and thank you. i know you're not in a position

to answer that, because you know you're at the command center, and that's part of that, but i just wanted to call the question because, you know, i would hope we do everything we can to ensure that we do everything we can to ensure that those people don't return to the streets and remain in public housing. >> thank you. commissioner burton? >> yeah. i'm pleased to hear what we're trying to do on the homeless issue. i have always felt that the department of homelessness wasn't worth two cents, and i'm glad that the port are doing some things to take care of our fellow human beings, so i just want to congratulate you on

that. >> thank you. vice president adams? >> president brandon, i'm supportive of the issue, and i like commissioner burton's comment. thank you. >> thank you so much for the report. i'm glad that we're getting pay for the site. i'm glad we are able to help out as we have throughout the pandemic in so many different ways, especially with getting our homeless off the street, and i'm glad that the program is a success. again, i think this'll be a success all over the city, and it would be phenomenal if all of the city participated in these efforts so we can get all of these homeless off of the

street. this is part of a strategy to increase the maritime opportunity, so i think as successful as this is, this is a citywide issue, and i think their other sites that would have to engage in something like this. i would move for this to continue, but i'm just not sure that this is the right place for it. thank you for the report, thank you for the success of the project, and may we have a roll call vote. >> clerk: yes. [roll call] >> motion passes unanimously.

resolution 2112 is adopted. call the next item, please. >> that would be item 12-a, which requests authorization to award construction contract number 2814-r, crane cobuilding to commit man development and construction in the amount of $1,879,600 and authorization for contract contingency fund amount or $187,960. this is resolution 2113. >> good afternoon, commissioners. my name is erica peterson. i'll be giving today's presentation requesting authorization to ward construction contract 2814-r.

this will construct a partial building rehabilitation including an existing building at crane co park. this is an existing action item to award crane co park, building 49, which i'll just call building 49, to the lowest bid published on february 1 of this year. the amount of this contract is 1,879,600, and authorization includes a 10% contingency amount. in this presentation, i will talk about how this contract meets the port's strategic objects, advertisement and scope, port'sout reach, provide a comparison of the bids, introduce the l.b.e.s and

subcontractors, and the proposed schedule. next slide, please. crane co park is a public outdoor space that will provide additional amenities to the public which will provide a space for future tenants such as a cafe or kayak rental company. building 49 will be prepared for future tenants, and awarding this contract today will help get a tenant in the building sooner, providing essential revenue for the port. and lastly, this uses general

obligation funds as a funding source which were [inaudible] next slide, please. craneco park opened to the public on september 30, 2020. the overall crane co park project is divided into five contracts, including this contract. this is contract number five, the yellow one, and it will complete the last contract of the overall crane co park contract. the other that's still under construction is 19 and georgia street, the green number three, and that is anticipated to be complete in the second quarter of this year. since building 49 is the last contract to have been advertised, port staff are very

pleased to announce that the bids for the final contract came in under budget, and the overall craneco park project is anticipated to stay within the $36 million budget. next slide, please. the scope for this contract is a partial building renovation and construction of public rest rooms inside the building. scope includes demolition, concrete slab and grade beam work, restaurant construction, including plumbing, hvac, electrical, roof replacement, exterior siding replacement, new doors, and a small amount of painting. utility services for the park are housed in building 49, and this contract will complete the construction of the electrical and mechanical rooms, some of which you can see a photo of from construction, we completed during the park improvement contract. the added alternative was to replace siding and it will be cl youed in the contract.

next slide, please. staff advertised this contract on february 1 and held an optional prebid meeting on february 19 via conference. the prebid meeting was attended by 21 contractors, 19 of which are l.b.e. firms. site visits were mandatory for contractors, and 13 contracts attended sites for all of the meetings. on march 2, we opened bids from seven contractors. staff have reviewed the bid and determined that whitman's construction is the lowest and

responsible contractor. you can see the bid summary here. one bid was withdrawn by the bidder afterward, and all bidder but one were l.b.e.s. from these bid results, it seems like the current bidding requirements are currently in the port's favor. next slide. the low bidder, whitman developer and construction, is local in san francisco. they've participated in many san francisco projects, including new golder gate rest rooms for rec and park, school related construction and intern housing for school district, and a few other photos here on the slide are from recent projects. they also qualify as responsible per the safety

procedures we've checked per the admin code. next slide. c.m.d. established a 20% l.b.e. contractor participation for this project. whitman exited to 35.# 8% l.b.e. subcontractor participation. over 75% of the work will be performed by l.b.e.s. i left turns noted that four of the l.b.e.s are in the bayview-hunters point neighborhood. whitman's bid, plus a 10% contingency, is within the project's budget. as this is the last contract to be bid for the overall crane co park project, we are pleased

to know that it is anticipated to stay within budget. if you approve this today, we anticipate construction to begin in may of this year and will be on track to have substantial completion by november of this year. next slide, please. in conconclusion, we respectfully request that you award this contract to the lowest responsible and responsive bidder, whitman development and construction. we are looking forward to completing the last piece of craneco park. myself and representatives from whitman are here to answer any questions you may have. thank you. >> thank you for your presentation. commissioners, may i have a motion? >> so moved. >> second. >> now let's open this up for public comment. we will have [inaudible]

jennica will be our operator and will provide instructions now for anyone on the phone who would like to provide public comment. >> thank you, president brandon. at this time, we will open the queue for anyone on the phone who would like to make public comment on item 12-a. please dial star, three if you wish to make public comment. the system will let you know when wrur line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star, three if you wish to make public comment. >> thanks, jennica. we will now take public comment on the phone. >> president brandon, at this time, there are no members of the public on the phone wishing to make public comment. >> thank you. seeing no members of the public on the phone, public comment is now closed. commissioner gilman? >> yes. thank you so much for the report, erica.

i'm just super excited to see us moving forward on crane copark. i have no questions, and i'm fully supportive of awarding this contract. >> thank you. commissioner burton? >> no comment. >> thank you. commissioner woo ho? >> yes. i'm very supportive of the project and also have no further comments or questions. thanks. >> thank you. vice president adams? >> president brandon, i'm supportive of the project. no questions. thank you. >> great. erica, you did such a great presentation. i think we're all very supportive. can we please have a roll call vote? >> absolutely. on resolution 2113 -- [roll call]

>> the motion passes unanimously. resolution 2113 is adopted. all next item, please. >> item number 13 is new business. >> i've recorded questions from the budget presentation about our commission policies and how we're meeting those. that will be covered in the agenda item on april 13. is there any other new business? >> elaine, elaine? >> yes. >> i would suggest the follow up on the budget was also for you all to take another look at the items that we raised, and so we need some feedback in terms of your further second look at the items raised, so not so much about the policies, but the actual two items that were brought up. >> thank you so much. yes, thank you. >> director forbes, i'd like to

see -- this is not an urgent item, since i know that port and staff have a lot on our plate, but i'd like to think about, when we're thinking about port recovery, about making the port continuously accessible to communities of color, so whether that's port programming, field trips to the exploretorium or the aquarium or cruise ship terminal, etc. that's just one item that i'd like us to keep in mind when we're talking about recovering, so engaging the community and getting them back to the waterfront. and then, my second informational, it can be a written staff report or informational on the ferry

building. i am concerned that there's several shuttered shore fronts at the ferry building plaza, and that cow girl creamery which was a tenant anchor, they're shuttering their doors. so what is the short-term plan for other pop up industry to use space? again, small businesses run by communities of color, businesses, and neighborhoods bordering the ferry building? they did a lovely event for lunar new year. i'd like to know if they're extending that and how we can broaden that to bayview, dogpatch, other kind of made in s.f. merchandise? >> any other new business? >> yes. i'd like to get an update from commissioner -- not commissioner -- director

forbes. what about that building, the world trade center behind the farmers market. can you let us know what's going to happen with that vacant building out there at the peer behind the ferry building? >> okay. and my question is we spent a lot of time on the back lands planning and all the opportunities that are there to support our maritime business, so i'd like an update. i know i thought that andre was going to do an update on our maritime status, including peer 70 and 80 and 92-96. i would love to see how our back lands are going to participate in our recovery and our maritime opportunities. and i know we've talked about it before, but i don't think we've come up with it.

this would be a great time for a naming policy and opportunities for dedication, so we have an understanding and opportunity for everyone because so many people have contributed to the history of the waterfront. so we need to have a policy so that everyone understands when and how and what opportunities are available for naming plaques, dedications. is there any other new business? elaine, you got all that? >> i got it. thank you, president brandon. >> okay. thank you. may i have a motion to adjourn? >> i make a