the projections once again assume more activities to happen at the transit center at the time the three year projection was put together. in that spirit both the revenue and expense projections attend be to be conservatively projected. in other words revenues made publicly on the lower side on the range of projection and expense side on the higher side of the projections. in subsequent months we will go through budget process and refinements in revenue and expense highlighted here. i have already covered about the rm-2 and rm3 revenue

uncertainties one-time offer of funding to comfort the retail revenue. the projection of those funds is very conservative given what has been shared with us earlier in this board meeting. they are projected hoping schedule of the tenants getting ready for grand opening. on the expense side we try to explore and leverage the sources for the way finding program and also we are striving to have a way to handle the park management and administration. i believe that concludes my very brief presentation and i am happy to answer any questions

you may have. thank you. >> thank you very much for the presentation. understand this is a budget process. can we help ease the increase to major tenants should be a priority. s.f.m.t.a. and at transit should be last resort not first. whatever we can do over the next several months to help lower contributions from my standpoint should be a priority. directors, any questions that you have on the preliminary operating budget? director. >> the transit agencies are suffering from reduced overall revenue because of the slow her

return to work as has been identified. i have a question about how we have a contingency plan if we can't get rm-3 plans and what we are looking at to tenants and represent not meeting. things are still uncertainty. >> director, thank you for your question. that is in the budget process. a deep dive into looking for all of the fund sources, potential fund sources available to again mitigate projected, contribution here. that is why we have been reaching out to m.t.c. for funding extended for a period of

time for short term mitigation. in terms of rm-3. right now it basically having. [indiscernable] basically we do hope that litigation will we behind us by the time the fiscal year starts so we will have -- we can ask for reinvestment. >> thank you. directors any other questions? director john baptist. >> thank you, chair "glee."

one clarifying questions and perspective to offer. one question was just what the timeline be looks like on the resolution of the rm-2 and rm-3 question. you were hoping prior to the next fiscal year. i am curious on the term of the naming rates when that needs to be up for renewal. the perspective is that it would be helpful as we think about the burden placed on operators as well as the differential between our policy goal with operating reserve and what we are able to achieve to look at longer term projection on the budget. you have done three year projection. even five year or perhaps longer view would help us to understand what is the point of time and

strategy that allows us to meet our goals of hitting a 25% operating reserve? also substantially reducing the amount that is requested for the transit and m.t.a. we are all in the business of wanting to see transit succeed. without being able to see what that long term vision is of how we get to greater self-sufficient see it is hard for me to know how to respond to the current strategies. actually is there a future in which there is greater self-sufficient see? i would love to see that as part of our budget conversations going forward. i run a non-profit. i understand that sometimes we set policies in terms every serves that are aspirational. at some point there is a true up in terms what we are

representing our goals to be and what reality is going to be. i want to be as transparent as we can as we go through this planning process going forward. i would like to know just what that timeline is and when you are thinking the rm-2 and rm-3 questions get resolved. thank you. >> thank you for your question. for rm-2 timing, i am being told it will be in the spring of 2022 that the commission will consider this request for extension. the timing will be just right for me to -- depending on the outcome of the commission

decision to bring it in front of the budget to the board. in calendar year rm-3. i don't have a crystal ball. i am one to point out that right now the rese r.v. e should be short term. i agree with you that that will be some other dive into the long-term planning and projection going forward financially. >> two more points of clarification. we hear from our legal advisers and advocates that they are expecting rm-3 to be resolved the latter portion of the calendar year. there is a legal precedent in the courts similar issue be resolved before they resolve

rm-3. in terms of the names rights the agreement was signed july 24, 2017. with a commencement date of 2018 for 25 year term. >> that means the directors cannot leave? we are not going there. [laughter] >> director shaw. >> i will say that for the transit is it is a big hit from $3 million to $5 million. around rm2 you talk about timing in the spring. have you guys decided if there is anything we can do to try to encourage m.t.c. to go that direction? anything to do as board members

or as transit staff to put letters of support the get that to happen? secondly, our big expense when you look at that is security. while we all know security is important, in light of what we heard earlier about public safety being one of the key things the governor is looking at is there more funding or grants to take those expenses down to help in that area? thank you. >> thank you, director shaw. thank you for your generous offer of support. for me and my team for the budget process, i believe any support that you can provide

would be helpful in extending the funding. for the security side definitely the grants to help us to cover some of the security expenses. that is something that in the next several months that we will look into. >> director shaw. any follow-up questions? thank you. any other questions from directors? >> i have one comment with the ongoing rm-3. we need to keep an eye on cash flow. that is reimbursement program. we are not cash rich. that is just not the way tjpa is with grants and reimbursements.

as you move forward and come back, make sure that analysis is done to the request from the director. cash flow can hurt us in the short term significantly. any other questions or comments? this is an item for action. preliminary budget approval for operating budget. ongoing process with more reports coming back before we finally approve. a motion? >> the public comment. >> sorry public comment first. >> moderator. >> please state your name. your two minutes begin now. >> jim patrick again. i would like to follow up on the security question. if you notice the security line item $7,353,000,000. that is 25% of the budget.

i believe the majority of that money is going to the san francisco police department for their four offices 24/7. i suggest we should bid this out like any other contract we might have. i don't believe it is bid out. we should look at private market to achieve same results. i bet you we could half or one-third the costs. we don't seem to be able to do that. that is an error. i suggest we look at that dollar item. it is the major item in the budget. thank you. >> that concludes public comment. first and second. >> so moved.

>> second? >> second lipkin. >> thank you. roll call vote. director borden. >> aye. >> director forbes. >> aye. >> director john baptist. >> aye. >> director lipkin. >> aye. >> director shaw. >> aye. >> vice chair mandelman. >> aye. >> chair gee. >> yes. >> there are seven ayes. item 9 is approved. >> with the current scheduling conflict we would like to call item 12 next. >> is there any issues with moving item 12 up to take next?

no one opposed we will move 12 up next. thank you, board. >> directors, item 12 is the san francisco peninsula rail program. executive acting director and chair will present. >> good morning. i do appreciate your flexibility on this item today. this is a item that i am going to focus on a single work stream that the esb and ipmc have been working on diligently over the last several months. we are continuing to work on it. it is the item for the dtx project. overview of progress as we move towards recommended approve for

consideration. this is a first view and bite at the apple, not the last. esc will consider the adoption as we move forward. our approach to the strategy is influenced by many factors. very complex. in considering how to contract for construction the needs of broad range of stakeholders are considered. we need to consider many questions. for example how should we allocate risk among parties, how does cash flow stick with skill-developing funding, how do we insure appropriate involvement in design and construction, what skills are required to manage design and construction within the agency. how do we get the best value at fair cost? these are a few questions we

intend to answer when we bring forth our recommendation to the board. the timing of that is likely to be in the summer. next slide please. this is he bit of an eye chart. there is within five general packages. the left side describes these. they include enabling works. utility relocation and site cleanup. general civil work including station boxes, bench structures and street restoration and cut and cover type work. tunnels including the tunnel construction in the road structure. the supporting systems including the architectural finishes and

safety systems anchor systems which includes train control, communications and railroad infrastructure itself. tracks interlocking. at the top when you look at the option you will see 10 combinations the team began with to examine to how these contracts packages can be delivers. these range from disaggregated approach so if you look at approach 1. several contract packages with different delivery. there is a fully aggregated pack aim. those are options close to the right side. the individual colors referred to different methods designing

build, c -- we are weighing these how we would answer the questions. next slide please. in looking at all of these options. the project team have recommended a short list of delivery options considering issues risk allocation, cash flow, legal authority, lead agency capable to manage design and construction, best value, operator involvement in designing construction. short list includes option 6. it is conventionally financed. 5, 6, 7 are conventionally financed approaches.

progressive design build fortunenels and civil components and the systems rail and stations. options 5 and 6 are variations with the team. number 7 if there is a desire for a financed approach that is what we have there. as an extreme alternative the team also an going to continue to assess option 10. the project development agreement involving design build financing approach given overall estimated cost and current funding. we believe further analysis of this option is warranted. part of our due diligence leading to future recommendation to this board. to the next slide.

this is a bit of an eye chart. what it is meant to convey is that the project delivery strategy is closely inter dependent to two work streams. capitol funding and governance plan. all activities will be worked on diligently over the course of the next few months and to next year all with the goal of full funding grant application to fta by august 2023. with all of these, they are working diligently through the esd. we will be bringing recommendations to the board when they believe they are ripe and warranted for a recommendation. part of milestone one i informed you of progress. we are going to continue to work with ipnt for options for final

recommendation to this board as i mentioned sometime in the coming months over the summer for milestone two. one of the most important things is to further refine the funding strategy with a particular focus on developing funding required to progress through the fta new starts process. they will advance remaining delivery options and begin the study. again, i mentioned all of this to you because we do believe these efforts are dependent on each other and the ipmt in my view just doing a great job leveraging all of the resources and subject matter experts to have robust discussions at the esc to bring to this board. with that i would like to

conclude my presentation. i want to thank the ipmt for focusing on this important stream of work. if there are any questions we have assistants to help with questions. i appreciate you advancing this item. >> as we expand the code speed we need an acronym slide in here. director borden our apologies for all of the acronym speak in here. it doesn't mean it is right. as we get more details we probably should have a little bit more than pdb, pdm.

progressive design build, progressive design maintenance. we should have an acronym slide in here somewhere. >> directors any questions for michelle and her team on the report? >> i have a question. michelle thank you for the presentation. i don't live in this world. as i ask this question help me understand where this value would fit. you talk about the criteria used to figure out what delivery method fits best. one thing i heard missing is values of creating local jobs, opportunities for jobs, participation with local small businesses. the sort of equity component of

delivery. is that a method to consider that or does that come down the road in the solicitation process? >> this is an excellent question. i would like to ask alfonso if we have got an answer for that. if not, certainly we will get back to you. [indiscernable] we continue to brief our labor partners on the progress of the project, much like we do in our normal course of outreach. the contractingmoth thousand dollarss each one -- method will be subject to progress labor agreement. that is a powerful tool to ensure we deliver on the promise

to the labor community who are so well organized in helping us advance our objective. i feel good about having that in place. i don't see much of a difference across the various delivery options to impact that. it is certainly one of the core values as we approach the budget delivery strategy. >> thank you. any follow-up questions? director shaw. >> thank you for the report. i used to live in this world and the accromins. before the next report if there is a opportunity to highlight what this is or what is important to us. some of it is detail enough that

it is not necessarily important. what was brought up by director forbes is a great point and a way to highlight where that is and where we need to pay attention so we can understand as we go forward and make this decision what are the things that impact that. thank you. >> we will do. this has been a quick run. it has taken the esc a couple good sessions to dive into this including the acronyms and what they mean. we will follow up on that. >> a follow up comment for the board. i think the labor agreement that alfonso mentioned is important. i think as we move through the process we need to consider contracting opportunities for the smaller local firms to team

up because that is so critical to support the local small business system and equity. i don't think that is a delivery method but something to consider down the road. i want to make the project team aware of that future conversation. thank you. >> thank you for your comment. how i would characterize what you shared. there are core values of the board we want reflected in any project delivery method of local jobs, inclusion, small business. those core values should be reaffirmed at some point going forward and embedded in what we do going forward. thank you, director forbes for asking that. director shaw i would think as we move forward this is going to get more complicated than easy. for directors if there is an

opportunity to reach out to execsive director for one-to-one. this is a decision this board will make we need to fully understand the options that will come before us later this year. other questions from directors or comments be. >> dr. john baptist. >> thank you. >> one question. i think i understand what is meant when we say we are looking at project governance options. i hope you can define what we mean when we say that we are analyzing institutional governance options. is that ownership of the downtown extension in long run? what does that refer to?

second question. obviously this analysis and this set of thinks is happening in the backdrop of a whole slew of conversations around rail governance and project delivery and a desire that is somewhat broadly shared for us as region to be able to put our best foot forward when it comes to planning and delivering our transportation services. in addition to really giving ourselves the capacity to hold institutional knowledge on mega project delivery. that is something challenging because we often times create project delivery for each project out of full cloth. i hope you can speak to how the process that the esp is undertaking relates to those

parallel conversations analysis occurring in various locations around the region right now. >> i am going to try to unpack that a little bit. it is a great question. chair gee is smiling. as someone who is involved in an extended governance process, complexity of that and what you have highlighted there is not one level, there are several level. i do need to turn it back to alfonso. the study is lagging a little bit. it is very. in lagging, in time it will follow this one. i believe that work and again i

will defer to alfonso. it is still defined. we have not considered any of that yet. good news is that folks on the esc that has intimate knowledge not only of governance within organizations but also of this area things going on. we have caltrain, m.t.c., we have got the ta represented as well as tjpa. what i will say is the folks that would be cog anysant of the efforts going on right now are sitting at the table. we can bring that feedback back. i would like to say and this is my comment again. i am interested in hearing what executive director thinks on

this or that alfonso thinks. a lot of this is just being defined. as region we are defining what issues are out there. we haven't defined processes how to bring them together. i think one of the challenges will have to tackle with this is that it is not that this governance issue is going to be considered within well defined processes. i think it is important to figure out what the touch points are. as we begin our process how it makes it to others. i realize that is draining a little bit. it is complex and a lot of these efforts are just starting to be thought about. it is very dynamic situation. adam, i don't want to put you on the spot. if there is anything else to

contribute. >> this is a substantial decision that impacts risk and ownership and delivery and cost over the course of the project. good news as the director showed in the second eye chart. many opportunities for discussion. the take away today is that the steering committee narrowed the list of options they recommend from 10 down to 4. they will continue the discussion at more detailed technical level. a question to discuss with the board is how often you would like to get updates from the steering committee before the decision. we will have this back to the board at least one more time prior to any decision making. at least two more times. that will be an all day conversation.

>> if i could and thank you both for that. given be the moment that we are in and the conversations and the consequence of this decision in front of us, two things i find helpful in this set of conversations. on the governance side you have, i thought, although very acronym a chart you laid out in terms of project delivery options. it was helpful in being able to convey the suite of things we are for. if we could have something to track the governance questions with respect to this project and the regional conversations that would help me orient in this conversation. secondly with our project delivery method if we could put

in place a stake in the ground. the method that we are striving towards has future compatibility with more regional approach. that is something i would appreciate. i don't know if other directors share that. to offer a potential path forward. >> maybe a little framing would help to think about, at least in my mind the three level. some related and some at what happens in other level. first level governance institutional level. right now tjpa is taxed with delivering the mandate. one option is to change that arrangement in some form. that is something the region

could endeavor upon. second level is the management and policy level how we are set up to manage the work and what policies like the small business and inclusive labor practices we have had. those are the things that is within we would want to apply across construction delivery. management things to do differently in terms of managing one contract versus small contracts. you want different staff level and expertise. those are all decisions that ties this management layer to the delivery method. on the delivery method those are things that are by project circumstances in terms what is the work to be done. you can see a long discussion around the packages if we have

somebody doing tunnels and other civil work. you want two contractors. you want to be more integrated. what we were talking about the delivery method to a certain degree can be agnostic. it has relationship with management and overlays on the policy side but the decision here doesn't drive what you can or can't do on the other level. great to have that conversation. i want to answer the right question at the light level in terms of the discussion. >> thank you for the discussion. i think probably given the layers of conservation underway executive director perhaps

february or march board meeting we can have a report on the m.t.c. regional initiatives to see how these conversations may fit into it or conversely i was talking with a colleague yesterday about the future. he found the crystal balon amazon. we can all order a crystal ball about the future. any comments on the report? anybody else wanting to raise a hand that i am missing which is extremely possible? >> i see no hands at this time. >> any public comment on this item? >> no public comment. >> thank you for allowing us to move this item up. thank you for the report. >> thank you very much. >> we will go back to the regular agenda. >> item 10.

adopting board policy no. 20. unsolicited proposal policy outlining procedures for receiving and receiving unsolicited proposals for the purpose of considering innovative solutions offering value, cost efficiency, enhanced financing and/or funding options. technical innovation, schedule acceleration and/or risk transfor for the downtown rail extension project. i can't hear you, alfonso. >> this item is a policy jpa staff is recommending for adoption by the board

considering unsolicited proposals. the policy will establish procedure for receiving and evaluating the proposals. the reason is to have the board approved guidance in place before the proposal or inquiry is received. from the industry outreach meeting last year we generated a strong project interest in the private sector. it is distinguishable for innovative solutions not previously considered or should offer added value cost reduction, enhanced financing, funding. technical innovations, schedule acceleration or risk transfer. unsolicited proposal applies to proposals related to design and construction of dpx.

though operation and maintenance of the facility can be considered it excludes rail operations and rail maintenance as part of any proposal received. as i mentioned, this describes the procedures for receiving and reviewing the unsolicited proposals. it is written to ensure open competition, rational decision making and add hererance to federal requirements while adding value to the public. this is the existing procurement policy. developing the policy staff reviewed the speed rail and metropolitan transportation and tjpa council. policy envisions three phased process. phase one they will receive a brief written be proposal

describing the organization, short technical proposal of supporting information. purpose for the authority to make a threshold determination if the proposal has merit and if so to request more detailed proposal. they are assemble an evaluation team for the proposal to include technical and legal and financial. representatives with technical and legal and financial subject matter background. it will draw from our agency partners. two requires a request for detailed proposal. the evaluation team will continue the evaluation with more detailed proposal and make a recommendation to the executive director as to the value the proposal has to the agency. after consulting with the

evaluation team should the executive director judge further development is warranted. they will difficult you, the board of directors, to seek authorization for procurement in accordance with the policy. that summarizes the unsolicited proposal. i am available to answer any questions you may have on those. >> directors, questions? >> thank you. this is great. i am glad to see us moving forward with that. la metro has taken advantage of these proposals and put things in place. it is good for them. i am glad to see this. my question goes around the question on the proposer paying

a be. what are the circumstances where that would happen? is that put in this there depending on the size of the proposal and what the proposal is in. >> that is why we don't have the schedule. it is going to be tailored to the nature of amount of evaluation and the proposal we received. >> thank you very much. >> other questions? comments? >> i would move forward with approval of the policy. >> thank you, director shaw. >> second. it is innovative and something to think about. >> thank you, director borden. any other comments on the motion? if not public comment. >> we have two members.

first caller. >> happy new year. before getting to the comment in my letter, i want to know that i really appreciate you moving item 12 ahead of this one. because unsolicited proposals have potential to bypass and eliminate the majority of the impediments that have been discussed. moving to my letter and i appreciated the director's comment about the bidder having to be contributing to the evaluation of the bid. there is a conflict. phase one from my experience you are looking at the unbe

solicited bid in $100,000. not a lot of money but $100,000. now you move to phase two. phase three eventually is going to be competition. who is doing this work might not win the eventual bid. it is unreasonable for people to contribute but respectfully suggest that you consider potentially awarding assignment. given they have the potential of saving a couple billion dollars. for saving $2 billion i think -- $2 million stipend would be most welcome. it would encourage more bids moving forward. thank you. >> next speaker.

>> please state your name. two minutes begin now. >> jim patrick. patrick and company. i also think this is a very sound idea. i presented a lot of ideas to the tjpa over 10 years. the most i get from those is thank you, mr. patrick. i find that a slap in the face when i make a comment. i get no feedback back. the process we have in place now is really very poor. this is a much larger question. i don't think we ought to charge someone a fee nor it has to be a worthwhile reason for this individual to do this. there has to be the end game. otherwise why should i waste my time. i have a great idea. for the good of tjpa? come on now.

structure is the right structure. i don't think there should be a fee to get in the ballgame. if it turns out to be a great savings there ought to be remuneration at the end. thank you. >> any other callers? >> that concludes public comment. i will take a roll calling vote. director borden. >> aye. >> director forbes. >> aye. >> director john baptiste. >> aye. >> director lipkin. >> aye. >> director shaw. >> aye. >> vice chair mandelman. >> aye.

>> chair gee. >> yes. >> there are seven ayes. item 10 approved. >> 11. authorizing executive director the execute a second amendment to the lease agreement with transbay fitness for come summer hall lease strategy to address covid-19 impacts and the director will present. >> hello. i have a presentation. i know time is ticking away. before you the second amendment. lease for fitness sf, largest

sennant at the center. you are familiar with the covid rationale we have been using. just to remind you that the tjpa board heard retail commercial retail strategy on june 25, 2020 and have negotiated with a number of tenants to come up with lease terms and such that meet people's needs and keep them here at the center. next slide. this next one is to remind you the operating background. eight locations in the bay area. secured a ppp loan $484,000 in 2020. of that only $15,000 was

available for rent at this location. we have confirmed they received no additional outside assistance since that time. they have closed according to the health orders and re-opened when possible. they have been re-opened for indoor use since spring of 2020. condition upon health orders including capacity, masking, not masked, then we are back to masking now indoors. since fall of 2021, we have confirmed membership growth has flattened. second amendment be to the lease is negotiated with the tenant retroactive to january 1st, 2022 increases base rent obligation for the common area base fee

from $10,000 per month to $20,000 per month. for the period from january 1, 2022 until june 30, 2022. under this reretain percentage rent at 10% gross revenues. the terms of the second anamendment be extended from july 1 to december 1, 20:22ly request and subject to approval by your discretion to economic conditions. the additional term of the lease has been extended to reflect rent for these periods moving the initial termination date to march 31, 2036. this allows the tjpa to recapture the relief granted. i would note the value of approving the second amendment

at $440,000 for the period january through june. impact of the amendment is comdated in this fiscal year's budget. that concludes my report. happy to take questions. >> thank you very much for the presentation. directors, questions? >> this is director borden. i assume the tenant is fine with this and feels they can financially make this work? >> actually they have paid the january rent. >> thank you. any other questions from directors? i am not seeing any. this item is for action. motion and second? >> motion to approve.

shaw. >> second. >> is that? >> borden. >> thank you, director borden. there is no public comment at this time. go ahead for roll call vote. borden. >> aye. >> forbes. >> aye. >> john baptiste. >> aye. >> lipkin. >> aye. >> shaw. >> aye. >> vice chair mandelman. >> aye. >> chair gee. >> yes. >> there are seven ayes. item 11 is approved.

>> at this time the board is scheduled to go into closed section. 9456.8. we have not received any indication the public wishes to comment. they have an opportunity to do so now. >> i am not seeing any hands raised. do we expect any action out of this closed session? >> i am not expecting any report out of this closed session. >> for our public members you are welcome to hang out until we report out or you are welcome to leave. thank you for joining us today. mr. secretary, we will adjourn to closed

>> we are back in session. item 16 announcement of closed session. >> item 15. conference of real property negotiators regarding the parcel of the development. it is noted the agenda. there is no action to report. >> thank you. i believe that concludes our business for the day. directors thank you for your time going past 12:00 a little bit. welcome to chinese new year on february 1st. best wishes for a great new

year. >> thank you. happy new year.

>> public comment will be available for each item on the agenda. members of the public who wish to make public comment, the phone number to use is 415-655-0001. the access code is 2494 795 0788. you need to press # #