vice president calling the meeting to order at 3:15. the president will be absent today. vice president? >> commissioner woo ho: yes. >> commissioner brandon: here. >> commissioner gilman: -- >> on mute, but i see her there. madame vice president, you do have a quorum. >> okay. let's move on to the next item. >> the san francisco port commission acknowledges that we're on the unceded homeland of

the ramaytush ohlone who are the original inhabitants of the peninsula and in accordance with their traditions, the ramaytush ohlone have never ceded their responsibilities of this place. as guests we recognize we benefit from working and living on their homeland and we wish to pay respects by acknowledging the elders and relatives of the ramaytush ohlone and affirming their sovereign rights. item 2, approval of minutes of the january 11, 2022 meeting? >> we have a move and a second. >> commissioner woo ho: yes. >> commissioner brandon: yes. >> commissioner burton: aye.

>> commissioner gilman: yes. >> >> commissioner woo ho: okay, the motion passes unanimously. the minutes of the january 11, 2022 meeting are adopted. >> that brings us to item 3, the pledge of allegiance. i pledge allegiance to the flag of the united states of america, and to the republic, for which it stands, one nation, under god, indivisible, with liberty and justice for all. item 4 is announcements. please be advised a member of the public has up to three minutes to make public comment on each agenda item. please note during the public comment period, we'll instruct dial-in participants to use a touch tone phone to register

their desire. and then it will signal participants when they've been enabled to comment. please dial in when the item you wish to comment on is announced. if you're watching this meeting on sfgovtv, there is a short broadcasting delay. so when the items you would like to comment on are announced, call in 1-415-655-0001 and enter your access code, 2494-813-2722 and then mute the volume on the computer and listen only through your phone which is a live broadcast. that's for the meeting presenters, please mute your microphones and turn off cameras when not presenting. that brings us to item 5, public

comment on items not listed on the agenda. and we will now open the phone lines to take public comment on items not listed on the agenda. our moderator will provide instructions now. >> 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 3 if you wish to make public comment. the system will let you know when your line is open. the others will wait on mute until their line is open. comments are limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. >> thank you. do we have any callers? >> carl, at this time, there are no callers on the line wishing to make public comment. >> thank you, public comment is closed. that brings us to 6a, the

executive director report. >> good afternoon, vice president, commissioners, port staff and members of the public. i'm elaine forbes, the executive director. first, i want to wish everyone a happy lunar new year. february 1 marked the beginning of the lunar new year celebration all over the world. here at the waterfront, the building was inspired to showcase small businesses from chinatown to remind of the richness of the shops and how important it is to support them. with the activation on saturday and sunday, the ferry building will have booths set up at the south end of the marketplace to showcase exciting small businesses. february is also black history month. the port is excited to celebrate. we will have black history programming for port staff, including special events. these celebrations help the port to create a culture of inclusion

and belonging. this is a key goal of our equity program. now to economic recovery. our maritime operations continue to show positive and hopeful signs. i'm pleased to announce that our ferry partners, tide line marine group with golden gate ferry are offering on-demand ferry service. this is a great way for our north bay residents to enjoy the waterfront at night. this ferry on demand service will bring passengers to and from pier 1 and a half and hyde street pier from the hours of 7 to 11:00 p.m., thursdays thru sunday. and we have more good economic news in our maritime operations. since we resumed, we have welcomed 20 calls today. this has brought 30,000 to the waterfront to shop, dine and enjoy the city. we're ensuring the activation of

our waterfront is safe. we require cruises to follow the federal, state and evolving public health guidelines. we're doing all we can, everything possible, to keep our waterfront and city safe. with the successful return of crews, public events like fleet week, the fourth of july and fish retail sales, these all contribute to the port's economic activity and waterfront revival. i want to thank the hard-working and dedicated maritime team. it's a key objective in the road map to recovery. today we'll hear a presentation from the finance team on the 23-24 operating and capital budgets. as you know, in december, the port secured $56.6 million in stimulus dollars. and we're doing all we can now to make sure the second trench of funding in april.

this funding and other smart actions the port commission has guided has made our budget stable. and this is a very big achievement. i'm proud this budget has strategic and substantial investments in our staff and in economic recovery with the underpinning of equity and resilience. this two-year budget will restore reserves and build-back investments and port infrastructure as well. we will actively manage the budget and economic recovery initiatives using data to guide our decisions and we may need to pivot strategy as necessary, so watching the data is critically important. recovery will be an iterative process, commissioners. i look forward to the commission's continued steadfast leadership and to date that's gotten us to stable financial footing for the next two years. now i turn to equity. the port is working internally and externally to ensure

waterfront for all and a culture of inclusion and belonging. port senior leadership and equity champions are working together to identify the 2022 racial equity action plan goals. then the organization will be prepared to recommend actions that address racial disparities that are also aligned with areas that employees see as needing improvement. equity is a core value at the port and we're in the early stages of developing infrastructure to build a sustainable program that supports our goals of becoming a more diverse, equitable and anti-racist organization. we look forward to the continued leadership of the commission. in march, we will give an update on the equity program. now i'm excited to turn to key projects. waterfront resilience. on january 19, speaker pelosi

made a big investment once again in our waterfront when she announced $5 million in new funding for the port and army corps of engineer study. the resource will support the flood study that spans the entire 7 miles of waterfront. this will identify vulnerabilities and find way to reduce current and future flood risks. the study is critical to ensuring we can protect the waterfront for decades to come. this study will position port projects for future federal investment and federal investment is key to our funding strategy. we're thankful to our port partners that showed very bold leadership. thank you to speaker pelosi, city leadership, federal and state leaders and, of course, our port commissioners and staff who are leaders in ensuring our resilient waterfront.

i want to pause here to recognize our port staff once again. last week we had our annual recognition event. and it was a very hard year last year, so folks that were exceptional were above and beyond exceptional and really tenacity, amazing work was on display and we're proud of the individual and teams that won awards. and because of this work, we were able to get things done better, maintain mission critical operations, create new programs and raise millions of dollars to offset financial losses and we had teams working together to ensure a safe return to the office for over 150 employees with zero covid-19 transmissions on site for years 2020 and 2022. in alignment with the department of human resources, we're now expecting the return of our telecommuting employees to be in

march. i'm really looking forward to getting back to the office. we miss face-to-face interactions with one another. we'll continue to do the hard work together to keep our water safe, vibrant and equitable for all. wishing you all a wonderful black history month and happy and healthy lunar year. that concludes my director's report. >> commissioner woo ho: sorry. thank you, elaine. -- for your report. an let's go to public comment. >> we will open the phone lines to take public comment on the executive director's report. and again jenica is our operator and will provide instructions for anyone on the phone. >> thank you, carl. 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 3 if you wish to make public comment. others will wait on mute until their line is open. comments are limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. at this time, there are no members of the public on the phone wishing to make public comment. >> thank you. seeing no more callers, public comment is closed. you are muted again, vice president. >> commissioner woo ho: sorry. commissioner gilman, do you have any comments on executive director's report? >> commissioner gilman: thank you, vice president. thank you, director forbes for that competing report. it is so exciting to know there

will be on demand ferry service and our social media channels, water taxis returning to the northeast waterfront to shepherd tourists and locals alike. i'm excited to hear that and i appreciate your report. i did just want to highlight a couple of comments particularly on our equity framework, the waterfront for all. i'm excited to see what the 2022 goals will be from our equity champions on the port. and i think linked to that is something that i can reiterate under new business that i would like to see. i think we have an obligation under equity to connect our waterfront to our communities of color that historically have been linked to the waterfront. the bayview hunters point and chinatown. and transbay, mission bay, evolving along the historic neighborhoods. i would love to learn from

staff, or have a study session on how we can create better signage, mappage, linkage to these historic neighborhoods and bringing those residents to the waterfront, but also to drive tourism. those 30,000 cruise ship passengers, besides taking in the waterfront, i hope would visit our historic neighborhood that also border the waterfront. in that vein, i would love for us to explore how to make that happen moving forward. i do want to do a shoutout to the staff. i think the covid transmissions during the time period you spoke about shows the resiliency of our staff. many of them were still on site every day during the pandemic, our maintenance and others doing work on the waterfront. i want to commend them for their diligence. and that concludes my comments. >> commissioner woo ho: thank you. commissioner burton? >> commissioner burton: no comment.

>> commissioner woo ho: commissioner brandon? >> commissioner brandon: thank you. elaine, thank you so much for that report. thank you black history month and happy lunar new year, everyone. i want to commend you and the staff on all of the resources that you are able to bring to the port to help with our economic recovery. and it's so good to hear that cruises are back and bringing people to the waterfront and the water taxis are running, so it seems like we're coming back. and you and the staff have just done an excellent job in keeping our waterfront safe. and attracting people to our beautiful waterfront. so thank you so much for your report. >> commissioner woo ho: thank you. >> i would like to echo, we've heard great report. the water taxis are my favorite,

black history month and i wish you all a golden year of the tiger. may everyone be healthy, safe and prosperous this year. great to hear about the recovery and the cruises and looking forward to hearing about the budget. we've already had a preview on that and i think it's a good budget and sensible. it's nice to know we'll have ways to recover with the help of both the federal and state governments. i think on the equity front, we look forward to hearing that report in detail in march. on the resiliency, congratulations to all of you to get -- being able to get speaker pelosi to help us with the funding on that $5 million. i'm glad to hear we also celebrated with the staff all the accomplishments we've done in the past year. so great report. thank you very much, elaine. carl, next item. >> that would be 6b, informational presentation and possible action on a proposed amendment to the port

commission's rules of order modifying the regular meeting schedule. that is resolution 22-05. that is me. hello again. i'm here before you today to present this item proposing an update to your rules of order to modify the commission's regular meeting schedule. and my presentation will be very brief. next slide, please. a i'll give a general description of what the rules of order are and cover the proposed changes and policy rationale. a public hearing is required under the city charter. that requires a 10-day prior public notice. a notice of this hearing was posted at the government info center at the main library and on the website on january 28, 2022 to comply with that

requirement. also a redline version of the proposed amendments which you will find in your staff report were made available to members of the public upon request. to date, i've received no requests and comments on the proposed change. next slide, please. very briefly, according to robert's rules of order, any government body has the right to regulate its own procedures as long as they conform with federal, state and local laws. you, the port commission have adopted rules of order, but they've been amended infrequently. the last was in 2019. prior to that, the rules have not been amended to 2006 when they changed the open session start time and formalized an attendance policy. the amendments to the rules of the order are always a policy decision for the commission as long as they comply with the law. next slide. so today port staff are proposing to modify the port

commission's regular meeting schedule to reduce the frequency of meetings. the commission meets on the second tuesday of each month and the fourth tuesday during the months of february, march, april, may, and october. the proposed change, as reflected in the attachment to the staff report, would reduce meetings to the second tuesday of each month. again on the fourth tuesday during the months of february and april. so that means going from 18 regular meetings a year down to 14 regular meeting a year by cancelling the second meeting in march, may, september and october. next slide. the purpose for this chain -- proposed change is efficiency and to economyize time. and port and city staff who support these meetings. so prior to drafting this proposed change, we did survey port leadership and their teams for input and to anticipate

business needs over the course of the year. and delays or interruptions in business are not anticipated with this proposed change to the meeting schedule, because two meetings remain in february for budget approval. we're in budget season. and two in april for possible requests for approval during the limited springtime in water work whip -- window. also, as you know, we do anticipate eventually, and maybe soon, moving to hybrid meetings, meaning members of the public will be able to choose whether to participate remotely as they have during the pandemic. while we look forward to the change to increase and encourage public participation, hybrid meetings require more support from the i.t. and business services staff, who are tremendous, but do so much work to make these meetings run smoothly. and finally, we weigh whether to

keep it as it stands now, or cancel meetings in the agenda does not warrant holding it. but that does not provide certainty for your schedule, commissioners, staff preparation or public participation. so next step. you have agendized this item as information with possible action. and there is a resolution before you for consideration. staff do recommend approval of the resolution which would change the meeting schedule as i have described, but, of course, this is the policy decision for the commission. i'm happy to answer any questions you might have. >> commissioner woo ho: thank you, carl, for your report. commissioners, is there a motion to approve the item? >> so moved. >> i second.

>> commissioner woo ho: thank you. let's go to public comment. >> okay, we'll open the phone lines to take public comment on item 6b. jenica well be the operator and will provide instructions for anyone on the phone. >> at this time we'll open the queue for anyone on the phone who would like to make public comment on 6b. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. the others will wait on mute until their line is open. comments are limited to three minutes. the queue is open, please dial star 3 if you wish to make public comment. >> thank you. do we have anyone on the phone? >> carl, at this time, there are no members of the public on the phone wishing to make public comment. >> thank you. public comment is closed. >> commissioner woo ho: commissioners? commissioner brandon, any

comments? >> commissioner brandon: carl, thank you so much for the report. i think when i was first asked about this, my only concern was after the summer months and our september meetings are actually pretty full. i agree with all the other months. i'm just still leery about going for three -- for six months with only one meeting. and that's just going to create a very packed long schedule for the commissioners. so that was my own currently. -- concern. >> i totally understand that concern. and we did look at the schedule from last year and the schedule and agenda was surprisingly light for september and october and we did consider cancelling the second september meeting. we could call a special meeting if warranted.

obviously, we don't have to -- we don't want to have to rely on that because you have busy schedules and we want predictability. but i think if we try it this year, maybe a pilot and figure out if those meetings after the summer months might need a second meeting in one of those months. >> thank you, i appreciate it. >> commissioner gilman: again, thank you, carl, for this report and thank you for the due diligence. my only concern it was it would -- was that it would create long meetings hard for staff and commissioners. i appreciate your due diligence. i didn't want this to slow down decision-making or operations for the port. i hope that as we enter this new way of doing business, i hope we will consider as we saw today

once we have informational items, that we give either feedback or no feedback to having a large consent. full presentation for things noncontroversial and perfunctory ways of doing business would be a way to free up the agenda if we're not meeting every month. the only question i had was due to everything changing, the governor dropping the mask mandate, do we anticipate when we as commissioners will be back in person? >> right now, the city-wide guidance is that boards and commissions that are chartered commissions will be required to return in person beginning monday, february 28. so that would mean that the port commission's first in-person meeting would be tuesday, march 8. and we will, of course, follow

city-wide policies regarding mask mandates at that time. the city charter requires port commissioners, all commissioners, to attend meetings in person unless they have an accommodation to the process. so commissioners would be required to be in person. city-wide guidance is that members of the public would have the option to remain remote for in-person. >> okay. thank you for that clarity. i look forward to being in person with my fellow commissioners and seeing the staff. >> commissioner burton: no comment. >> commissioner woo ho: okay. i would like to add we did -- i did have discussion with the staff and i think it makes a lot of sense in terms of how we manage it. the idea that perhaps we view this as a pilot to see whether this year works and if we decide to review it again next year,

and to decide this becomes the permanent schedule, maybe that's the best way to go. so we may make a minor modification to say this is a pilot. and that may make everybody more comfortable. as far as time efficiency, i think we had a conversation in being able to move more things to the consent calendar. and i think executive director forbes made it available that she can brief any additional commissioner in addition to the officers on any items in advance. that helps to move along items as well, but we don't want to cut off public comment, because they have the right to come and give their input. but the way to actually manage the time -- because one of my first questions was, if we have less meetings, we didn't want to sit until 7:30, at night.

the combination of moving more things to consent item, having the ability to be briefed so that people don't have to have as many questions, we'll still take public comment, hopefully, this will move this along faster and make it more efficient for everybody's time. with that, are we ready to vote? >> i'll add to the last whereas clause, these rules will be modified fort regular meeting scheduled for 2022 and then a review. so with that, vice president? >> commissioner woo ho: yes. >> commissioner brandon: yes. >> commissioner burton: aye. >> commissioner gilman: yes. >> commissioner woo ho: motion passes unanimously. resolution 22-5 is adopted. >> there are three items on consent today.

7a requests approval of a resolution adopting findings under new state legislation to allow meetings to continue during the covid-19, continuing remote meetings for the next 30 days and directing to agendize a similar meeting. that's resolution 22-06. 7b, request retroactive authorization for memorandum of understanding for the review of requested changes of the san francisco bay waterfront special area plan in an amount not to exceed $150,000. that's resolution 22-07. and 7c, request approval of application of delegation of authority to offer leasing incentives set forth in resolution number 21-16 to select existing maritime tenants. that's resolution 22-08. >> commissioner woo ho: commissioner, is there a motion

to approve? >> so moved. >> second. >> commissioner woo ho: let's open it up for public comment. >> okay, we'll open the phone lines to take public comment on the consent calendar. >> thank you, carl. at this time, we will open the queue for anyone on the phone who would like to make public comment on the consent calendar. please dial star 3 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 3 if you wish to make public comment. >> thank you. is there anyone on the phone? >> at this time, there are no members of the public on the phone wishing to make public comment. >> seeing no more callers, public comment is closed. >> commissioner woo ho: please take a roll call vote. >> commissioner woo ho: yes.

>> commissioner brandon: yes. >> commissioner burton: aye. >> commissioner gilman: yes. >> commissioner woo ho: motion passes unanimously. resolution 22-06, 07, 08 are adopted. next item. >> that would be 8a, informational presentation on the fiscal year 22-23 and 23-24. the acceptance and expenditure of federal stimulus money and the five-year capital improvement program. >> good afternoon, vice president, commissioners and director forbes. i'm the port's deputy director of finance and administration. and i'm very pleased to be here this afternoon with nate cruz to present the port's proposed capital and operating budget for the fiscal years 2022-23 and

2023-24. this presentation will also include a summary of the port's five-year capital improvement program. and will describe the process to accept and expend federal stimulus funds. budget preparation is always a team effort and i must thank and acknowledge the outstanding work of marilyn yea in developing the operating budget and yvonne collins on the capital budget and the cip and absolutely we would not be here today without the leadership skills of nate. next slide, please. this past two years has been one of the most challenging period of my 20-year budget career in san francisco. the pandemic has had

unprecedented impact on port revenue and created unbelievable economic uncertainty. as tourism vanished and office workers worked from their living room, the port lost 40% of its revenue. we've seen decreased revenue in restaurants, retail cruise, parking and excursions. some of the revenue has returned. in particular, parking and cruise are the bright spots, but the controller office projected it's going to be another four fiscal years before tourism to san francisco fully recovers. and they also project that many office workers are never going to return. in the face of the crisis created by covid, port staff with the strong leadership of this commission, reduced operating expenditures, delayed hiring, reduced capital investment and tapped into our fund balance. these tactics helped the

organization to balance the budget over the last two years, but they're absolutely not sustainable over the long-term. port staff knows that we must restore our financial footing, rebuild our revenue budget and ensure a robust fund balance. to accomplish these goals, we have already begun to develop and implement short and long-term economic recovery initiatives. the port's economic recovery work is going to be challenging, iterative and multifaceted. our economic recovery efforts have already had a major success with the allocation of federal stimulus funding, so we know that if we're smart, we're strategic and persistent, we will succeed in restoring the port's financial well-being. the economic recovery initiative that we undertake will include

finding new revenue streams and efficiencies in savings in the operating budget. it's going to be critical for us to maintain staffing levels to deliver key functions across the organization. we must continue to support tenant recovery and to develop strategies that revitalize the waterfront and support new leasing as we will continue to build on the port's history of strong financial policies to support fiscal health. next slide, please. our presentation today will describe the financial outlook and discuss how the budget meets strategic objectives. we're going to spend most of our time this afternoon reviewing funding sources, describing the port's operating budget and outlining capital investments, including the five-year capital improvement program and the two-year capital budget. we'll end today with an overview

of the port's policies regarding required operating reserve and capital investment. i'm proud of this budget. it manages the port's resources thoughtfully and lays the ground work for economic recovery over the next five years. this budget meets the port's seven objectives. highlights of the budget support for the strategic plan include for economic recovery, leveraging federal stimulus funding to activate the waterfront, attract and retain tenants and support communities disproportionately affected by the pandemic. under productivity, allocating funding to improve the cargo terminal at pier 80 providing ongoing support for the buildings. under equity, we're creating two new apprenticeship positions and providing funding for the racial

equity action plan. under resilience, we are continuing to provide funding to support the waterfront resilience program. for sustainability, we're funding a match for a grant that will help restore the shoreline at heron head park. the creation of the position to manage port open space for the benefit of the community. under engagement, we're going to allocate resources to help market port real estate and support community engagement. with that introduction, i'm going to turn the presentation over to nate cruz to walk you through the meat of our proposed budget. >> thank you. so, i'm nate cruz, with the finance administration division. what you're looking at, it's a figure from the staff report.

it's kind of a look back as well as a look forward of our core operating revenues. so this would include sort of the maritime fees as well as the real estate rents, but can see pre-pandemic we were, you know, a little bit above $120 million a year in revenue, about. with the onset of the pandemic, revenues took a steep dive. we think we're coming out of the bottom of it. the dotted lines represent sort of the look forward. the dotted blue line is the base case which is the underlying assumption in the budget that we're presenting to you today. and it largely follows the assumptions that the controller's office has around the return of tourism. that is that tourism spending returns to pre-pandemic levels in fiscal year 25-26.

so it's sort of the slow march back. the four remaining fiscal years of the recovery. what is also included in that assumption and matches the controller assumption is that roughly 15% of office workers continue to telecommute once the pandemic is over. as a port-specific assumption, we're anticipating the base case that roughly four restaurants become -- or currently are vacant, that four of those will need to be re-tenanted in the near future. the higher case assumes that tourism returns a little faster, maybe a full year sooner, with pre-pandemic tourism volume in fiscal year 24-25, it does use the same work-from-home and vacancy assumptions as the base case. on the low side, we're assuming

that tourism takes an additional year to return. and so that pre-pandemic tourism levels return in fy26-27. it also assumes that double the proportion of people telecommute at 30% of office workers. it also doubles the potential restaurant vacanies that need to be retenanted. the difference between the high and the low in 2026 is roughly only $10 million. now there is a lot of uncertainty and a lot of things can change, but given the proximity of the forecasts, we can make informed decisions in the budget we're presenting to you today. next slide, please. so in a normal year, we have the traditional budget considerations and i'll go over those. we're an enterprise agency. we traditionally need to support

our own operations and cavity capital investment without support from the general fund. we also need to maintain our mission in revenue capacity, specifically our maritime mission and our requirement to create a safe place for people to come to the waterfront. we need to maintain our investment in our facilities so we can continue to make revenue. and not just a safe waterfront, but we need to create a welcome, safe and vibrant waterfront where people enjoy coming to visit. and ultimately, we need to be planning in an equitable and resilient port. the next layer that we need to consider when creating a budget is the amount of capital investment. in the 10-year capital plan that we developed last year, we identified a $2 billion state-of-good-repair backlog which is substantial. and pre-covid we're investing roughly $20 million a year in capital, which was not

sufficient, otherwise we wouldn't have the big backlog, but still stands as a benchmark. the final consideration is fund balance. these are our reserves, the rainy day fund. at the on set of covid, the ability to dip into those reserves has proven critical. we need to maintain reasonable reserves for future emergencies and the bond rating agencies look very closely at the level of fund balance. if we map the revenue forecast on top of the budget considerations from the prior slide, this resulting table is roughly what we think the budget is going to look like, specifically in the next budget cycle, the budget we have before you for fy22-23 and 23-24, but also importantly in the years after that. you'll see this table quite a

bit. it's also in the staff report, but it's a useful table because it shows sort of all the components that affect the port's financial health. it has fund balance, our operating revenues and expenses as well as capital expenses. and so today we'll walk through these in different portions, but i'd like to point out to you today, you know, in the -- in the next cycle, 22-23, 23-24, we have healthy fund levels. good amounts of revenue, but our stimulus line, the third line in the revenue category, is really the reason for this. we have a healthy budget because of that stimulus. after operating expenses, we have the net surplus that is available to invest in capital. and really in this two-year period we have historically high level of investment in capital. that's wonderful. [please stand by] [please stand by]

tourism won't come back for four years. and i think that cruise passengers have been the exception to that rule. they are a loyal and eager bunch to get back on cruise ships, and

so we already have historic bookings for the upcoming year, so that's a great bright spot. this is also an opportunity to perform to better than even the high case for maritime revenues i know that the maritime division is hard at work to identify leasing strategies and opportunities to generate revenue at the shipyard, so that might push the number up a bit on the maritime side. on the real estate side, again, the four-year return of tourism is what is driving things. parking meter revenue has been a bright spot early on, and that's mostly because we see that the people coming to the city are driving, they're not taking transit. bridge crossings are about 90% of pre-covid levels and so while that's good for our parking meter revenue it's not an indication that all tourists come are back in the same methods they used to. so as tourists return through

fiscal 2025-2026, that will help to build back excursion revenue and retail and restaurants especially, and that's going to be critical to our recovery. the other side of our portfolio that is not quite so tourism dependent -- we're forecasting to be relatively flat through the budget period. that is rent from offices, land, shed, and we think that, you know, certainly there's a lot -- there's quite a bit of uncertainty around these numbers but a lot of inflationary pressure that could put the the rents up and there's not a lot of storage space available in the city and we have the bulk of it. and on the other hand, especially on office rent, there's off-setting pressure, downward pressure on the prices as more people telecommute. there's going to be some corrections in the demand for office and the pricing for office that we don't really have a precedent to look towards to

understand how that's going to play out. so that's going to be something that we keep an eye on in the near future. and then as a bright spot for real estate, with the increased staffing that you'll see in the budget as we get into the staffing levels, there's an opportunity to push revenues even higher as we really backfill a lot of critical positions. there's going to be a number of vacancies and opportunities to get new tenants in and we'll hope to take advantage of that with these new resources. next slide. the other significant source of revenue in the biannual budget cycle is federal stimulus. as katie mentioned, we're anticipating getting up to $115 million of stimulus, that's really unprecedented for us. and we're going to use that to restore programs, projects that were cut or deferred during covid-19. to avoid layoffs for the next two years and backfill critical

positions that we have intentionally left vacant, to achieve savings. and also to invest in our own facilities. $70 million of capital investment. so we already have approved for the first half of that funding and we anticipate the second half to be approved in april. and the spending of that money will occur in the current year and that is reason that there's an accept and expend portion of this sort of legislative package in order to do current year expenditures, we have to do an executive spend. and the fy2022 and 2023 and 2024 are embedded in the process itself. this is really critical is that the spending deadline is june 2024. the end of the biannual cycle. and, you know, that's not a whole lot of time. this stimulus provides us really critical reprieve for two years, but then after that we really

have had an opportunity for recovery initiatives to mature and result in new revenues so we can have a suitable amount of capital investment. next slide, please. so, again, now we're moving sort of down the chart into the operating expense area, the area highlighted here in the chart. next slide. so in operating expenses as always, our talented port staff is fantastic, but expensive. the biggest portion of our expenses, the costs are going up in the budget by $5.7 million. and that breaks down into a couple chunks. and the first happens almost every year, this cost of living adjustments that result in roughly $1.3 million increase. we're also funding the filling of roughly 20 positions that have -- that we have kept vacant through the pandemic to achieve savings. that's going to cost us roughly

$3.6 million and that ends up being a reduction in attrition savings in our budget, they are not new positions. and then we're going to add five new positions on the budget, on budget positions, and six off budget positions. or project positions. and that results in about a .9 million dollar increase. those new positions, if you are interested in the full list of position changes that's attachment -- i would say attachment 3 to the staff report. but i'll highlight a couple of the bigger changes. on the new position front, and as katie mentioned, we are creating a new property manager for port open space. we're creating two new positions in engineering to help with permit desk input, and we're anticipating extra activity witd

our own arpa funded project and so we need more capacity in the permit desk. and creating two apprenticeships in maintenance that katie mentioned. the off-budget positions include a project manager to lead the economic recovery initiative and implement those strategies. it also includes three resilience positions to help with outreach, as well as contract and project management capacity as resilience projects some of those early projects start to mature. and then we also added extra capacity for real estate projections and we have a position for the leasing administration group to help them to collect some back rent. on the non-personal cost side, we see $2.3 million of increase that breaks up in other current expenses, roughly $1.3 million there. the first chunk of this doesn't actually result in a net

increase to the budget but it looks like this on the operating side because we're shifting roughly $600,000 from a project into the operating budget. we've had engineering as-needed consultants budgeted in two places in our budget and that really didn't make a lot of sense. we're consolidating them in one place but it's not a net increase to the port. we're anticipating an increase in cost due to the renewal of our security contract. and increased costs also in janitorial. but we think that most of that, not all of it, will be offset by the renegotiation of our office lease at pier one. so the net result there is about .3 million dollars. on the pier one lease it's worth noting that last year when we came to the port commission with a supplemental appropriation, we were about to go into negotiations because of a -- this is an automatic rent reset to market that we're about to go

into. because it was covid, there was a lot of uncertainty about what the fair market rent really should be. we put a pretty conservative number in the budget that equated i believe about $75 a square foot. we're ending up much lower than that, i think due to the hard work of the real estate team. and we think that we have successfully ended up at a very competitive price and so that's why you're seeing some savings in the budget here. and then, finally, on the equipment side, we're restoring our equipment budget to pre-pandemic levels of roughly $1 million. we really have it out in the current year and that's not sustainable. we need to make sure that our maintenance folks had sufficient equipment to maintain the port. next slide, please. so that takes care of the operating side. back to our overview now and we're now down to capital expenses. again, this particular biannual cycle has almost $95 million of investment if you add in them

together. and that's really a great flb. we love to see that every year. but this year we're kind of lucky and really only able to afford that due to the arpa stimulus. next slide, please. now before we get into how those dollars are actually allocated, it is worth stepping back and talking about how we do capital planning at the port. the highest level view that we offer is something called the 10-year capital plan. and that is staff's attempts to understand the total need at the port. it looks at our deferred maintenance backlog, what we'll need over 10 years and the enhancements that we are expecting. we did that last year and identified $2 billion worth of deferred repair need as well as the renewal need that we'll neat over the next 10 years. so to maintain a state of good repair we would need $2 billion the next more granular level of

detail is the capital improvement plan and that looks at a five-year span. that's the effort that we just completed. we started last fall, and the result of that is that the specific allocation in a plan to spend over the next five years of over $208.4 million. and we'll go through the specific uses of those funds in a minute. but that is the capital improvement plan is only a plan it doesn't actually appropriate funds to projects. what does that is the two-year capital budget that we're presenting to you today and that's just the first two years of the five-year capital improvement plan and that appropriates funds and the actual project and the two-year budget this year is $93.9 million. next slide, please. so the process that we went through for the five-year cip, it is pretty thorough.

we started back -- like i said in the fall, trying to really get our arms around all of the potential projects. so we looked at three key areas first, most of our projects come from staff, right, the property managers and the wharf managers and they're the closest to the facilities and we get the bulk of our project submissions from staff. the other place that we get is from our ferpa assessments, facility inspection repair project assessment. you can understand why we call it firpa. but that really gives us fantastic granular data about our facilities. we send out teams of engineers in different disciplines and that go over the piers and on the roofs and they give us condition assessments as well as cost repair estimates, and remaining useful life estimates so that's really the best data that we have on our facilities. and the last source of project

ideas is project submissions from previous cips, where we didn't have enough money to fund the project. so we throw those back in the mix for a ranking event. and so when we get to that ranking event, which happened at the end of october, the deputy directors review each of the project and then write them against each other, according to some gutting principles. and the main questions are, you know, does the project address strategic goals and objectives and does it address priority health and safety needs? does it meet an imminent leasing need or more of a long-term strategic investment for revenue. does it leverage our money with outside sources that, is a big one these days. and then, finally, and this is new for this year, we had a specific requirement that all project submission forms enter in the race equity impact of the project. so that the deputies could actively consider that as well. next slide, please.

so the result of that process is what you see summarized in this chart. this is the five-year funding plan that came out of the cip, which mapped all of the priority projects against what funding we actually had available. the first two columns, the fy2022, 2023 and 2024 columns, that is the biannual budget presented to you today. and the full lift, you know, this slide and the next slide, it is roughly 30 projects. so i don't want to take up your whole evening going through them one-by-one but i'll hit highlights. and attach 4 to the staff report is the cip report itself and there's a one-page summary of every single one of these projects at the end of that attachment. but working my way down the list, i would point out one of

the most exciting investments that we have is the investment in pier 80 for fenderring. this is a long overdue project to update the existing fenderring system, which my understanding is that it is oversized tires attached to piles and it works and it's adequate, but it is not really a modern solution. so upgrading to a proper solution will protect the shipss that call on the port as well as our facilities. it had a bit of flexibility in the type of vessels that might call on pier 80 so that's an exciting investment. we're also at pier 80 with a study, not a construction cost, but a study on how to best deal with the subsidence problems. the decking there is not level so we're getting quite a bit of water pooling after storms. for a roll on, roll off operation like our cargo terminal that creates inefficiencies where you have large puddles and also somewhat of a safety hazard so we need to

deal with that. so this doesn't fund all of it, but it's a first step and it's a good step for us. i also wanted to point out this row that is in green that says pile removal, this project as well as a number of others on this chart and the next page, are restorations of previous projects that existed that we defunded during covid. with the onset of the pandemic, we dipped into that fund balance into our reserves and we recognized that we needed to replenish those reserves at some point. so last year in the supplemental that we brought to you and the board of supervisors we defunded a number of -- lower priority projects, but with the availability of arpa funding we're able to restore some of those. so the pile removal project is know who of those. the pier 90 silo demolition design project is also one that should be in green, i apologize for that. let's see, work my way down the

list -- another one that i would like to point out is the investment in cargo weigh. this is an investment of harbor fund to try to come up with a design and some planning work for resilient cargo weigh. why i highlight this is because it is a -- it represents our thinking about how to pursue federal infrastructure dollars and outside dollars later on by investing this money upfront. and we think that we can make this project particularly competitive for outside dollars later. and so this is one way that we can help to increase capital investment, even if we don't have our own money to bring to bear. let's see -- down in the northeast waterfront, and there's two projects at pier29 1/2 and they are not expensive projects but they are worth highlighting because they would result in more rent.

these are roi investments, return on investment, sort of plays to increased office rent at 29 1/2 and to maintain our ability to use shed at pier 29 1/2. and the round house to building for $8 million. at the beginning of this cip process when we looked at all of the projects, this was a much cheaper project. our firpa assessments have identified a number of issues that need to be improved. and given how important this asset is to our portfolio it ranked very highly. after that ranking, the rainstorms came through and i think that it was december, the atmospheric rivers, and demonstrated that we had some leaking problems that we didn't know about. so we had to refine the number and increase the $8 million to address the leaks as well as the pier 1 firpa concerns.

next slide, please. i'd like to point out here, let's see, the -- okay, the firpa investments, the facility inspection repair projects, we will continue to invest in getting great data about our facilities that is instrumental in us making good decisions about where to invest our funds and the other thing that i wanted to point out -- and this is an exciting new project -- is the second one from the bottom and it says pi fund for tenant attraction and retention. this is a key investment in economic recovery that's funded by stimulus. this is a tenant improvement fund that will help us to attract more tenants to the waterfront. your typical private sector landlord helps to finance tenant improvements to a certain number of dollars per square foot.

because of the port's cash position we're not able to offer that so it limits the type of tenants that we can attract, those who can self-finance those improvements. they either have their own money or access to credit markets and can get the significant amount of money needed to improve a cold shell into a working restaurant. by offering this fund, i think we can attract -- or we thank we can attract a lot more tenants to our space. the other thing that it does is that under our current regime where we have tenants that can self-finance those improvements, we give them rent credits in that amount of those improvements which delays the time which we actually can get money, the point which cash flows to the point. so this tenant fund we think will help in two ways. it will attract more people and generate cash in the form of rent faster for the port. so that's an exciting development. and obviously, the last project, you know, we continue to invest in the waterfront resilience

program. the particular figures in this table represent arpa stimulus as well as the port harbor fund. the waterfront resilience program is also funded by go bonds and we're also requesting $4 million in support from the general fund in this budget cycle, which is are not included in this table. next slide, please. so the previous slides really sort of give you detail of what's happening over the next two years. but as we discussed, and we have a pretty healthy two-year budget and it is the out years that really are where we need to put our resources and start thinking about solutions. and so there are things in this two-year budget that address the out year concerns and the three legs of that strategy are equity, economic recovery and resilience. next slide, please.

so within the budget, we have a number of investments that sort of play into the economic recovery effort. and i'll point out that the -- that the lines here that are in green indicate that they are funded by arpa stimulus. so, you know, towards the end of creating a clean and safe and active waterfront, we're creating a position to manage the open space at the port. we're creating more building -- i'm sorry, building inspectors to support the delivery of resilience projects in arpa-funded capital projects. we're also creating a position to support the administrative needs at the permit desk. we're backfilling really fundamental, like maintenance positions and operation positions, such as plumbers, roofers, property managers. we've got funding in here to hire a pile crew so we can more efficiently maintain and improve our wharves and piers and

restalling our equipment budget so that we can clean and repair our facilities properly. on the restoration of revenue side, we're creating this new position to develop and implement our economic recovery strategy and really extend the work that has already done to win the stimulus money. there's a lot more work to do on recovery and this new position should help us to achieve that. we've got this new tenant improvement leasing fund. we've got -- let's see, resources -- sorry, we have included resources in the budget to address the anticipated increase in workload for collections and vacancies. and we have capital improvements to the roundhouse, pier 9 in our maritime facility and pier 80 as well as improvements at pier 29 1/2 to generate revenue. next slide, please. on the equity leg of the strategy, we're creating those two new apprenticeship positions

in maintenance. and we're creating a dedicated h.r. resource that we call an ombudsman and that's really to help our internal staff to have a point of contact to go to with their own questions. when is the next test for this job classification, the next in my advancement pathway? what are the trainings that are available? how do i study for that test? we're creating a dedicated person that can help to answer those questions and we're also providing funding to pay for that training. we've got resources to implement the race equity action plan. we've got capital improvements for the shoreline, and removal of piles on the southern waterfront and as well -- at least the design phase of the silo demolition of pier 90. next slide, please. and the third leg -- resilience of course, we continue to support this generationally

important project. we've got new positions, including one to really help to advocate or develop financing strategies and advocate for other people's dollars from the state and federal government. the position is to improve our public communications capacity. and then as the early projects in resilience start to develop, we know that we're going to need more project managers and contract managers, so there are resources in this budget to address that need. we're also investing in planning projects that will help to advance resilience projects so they might be more competitive for outside dollars. specifically we're doing that for pier 50, and seismic improvements at pier 50 and planning for resilience work at cargo weigh and fisherman's wharf. and, again, we have an ongoing investment for our facility assessments and the firpa the day data, that allows us to

compare one facility against another and how much it might cost to repair. next slide. so as katie mentioned, you know, there are these two key policies implemented by the port commission that each budget needs to address. the first is that capital investment has to be at least 25% of operating revenues. and this particular biannual cycle, we are well in excess of that goal with 37%, but that's only really due to the arpa funding that is available to us after this biannual cycle that's going to be a much greater challenge to meet that 25% threshold. the second port commission policy and i can't overstate how important it has been to have this operating reserve, but the policy is that we have a reserve of at least 15% of annual expenses. in this biannual cycle, we're forecasting that it's roughly 90% of annual operating

expenses. and while we're far exceeding the 15% minimum, 15% is a reall the rating agencies and just given the type of agency that we are, we really need a much larger reserve and we think that 90 together is a healthy place to be. next slide. so in terms of the mechanics of what's coming up next for the budget and the acceptance and ex-- the accept and expend resolution, right now we're presenting to you the full sort of financial package with the capital budget and the cip and the accept and expend for arpa stimulus in the current year. we'll be back in a few weeks to ask for your approval of the budget and the ane. and at the same time we'll be submitting our budget to the mayor's office. and at which point after we submit our budget to the mayor's office, the acceptance and expenditure of stimulus kind of

goes on a different path because it needs to be approved in the current year to affect the expenditures. so that goes to the board and the mayor in march and april. on its heels in may and june, the mayor and the board will look at the full operating budget. next slide, please. so while the prior slide talked about next steps mechanically for the biannual process, the economic recovery is a much larger effort, and it starts -- it starts now. we really need to create these strategies for long-term financial stability and new strategies might include new leasing strategies for properties and activism across the waterfront, and the enhancement projects underway. or seeking new opportunities, additional historic piers. we can create new maritime opportunities. and we need to secure the infrastructure funding from the federal, the state government,

to support key capital needs here at the port. next slide, please. so i know that was a lot of information and i thank you for bearing with me and i'm happy to answer any questions that you might have. >> vice president woo ho: thank you, katie, and dave for this excellent presentation. very, very thorough. let's open up for public comment. >> clerk: we will take public comment on item 8a. we provide instructions now for anyone on the phone to provide public comment. >> thank you, carl. at this time we will open up the queue for anyone on the phone who would like to make public comment on item 8a. please dial star, 3, 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, 3, if you wish

to make public comment. >> clerk: thank you, jenica, do we have anyone on the phone? >> carl, at this moment there are no members of the public on the phone to make public comment. >> clerk: thank you, seeing no more callers, public comment is closed. >> vice president woo ho: commissioner burton, any excepts? >> commissioner burton: i would be remiss without saying that if it wasn't for speaker pelosi we wouldn't be celebrating all of this money. she jumped in with both hands and both feet and that made sure that we got our just do and i think that the speaker should be recognized for taking care of her home port. >> vice president woo ho: thank you. totally agree. commissioner brandon. >> commissioner brandon: katie and dave, thank you so much for this report. i know a lot of work has gone into producing this and there is

so much in this report that i had to have two briefings and i still have questions. [laughter] but i think that i'd like to start out by saying thank you so much, because this is a lot of information. you guys have done a phenomenal job in bringing it all together and trying to make us understand. in the past, we have been given a little more detail about our budget, especially on the expense side. and so i think that i have a lot of questions regarding that. and we usually have a budget book with details and based on every industry what exactly everybody is spending money on, what the revenues are, and so this was very difficult for me to comprehend, because you have the budget and the capital budget together. and then i think that we also need to think about resilience.

because they have a huge budget and i think that instead of just putting a number out there, we during this budget process we really need to understand what we're spending. and so as i said, i have a lot of questions, i had two briefings. and i'm still -- there's still a couple of items that i would like more clarification on. and i'm -- i may be all over the place, because that's the way that the staff report is, so i'm just going along with the staff report. and that was first capital defunding. so last year we defunded about $38 million in capital projects and so my question was did we refund all of those projects or are they still -- or are they out in limbo? and also with the capital planning budget, because in the past we've gotten more information, we usually can see

what was previously funded, what the status of it is, if it is completed or if it needs additional funding. and so we really didn't get those resources this year. so just wondering about the defunding. and what exactly was defunded and what was refunded and what is no longer part of it is really good to know. regarding the arpa funds and, congratulations, i think that this is phenomenal the fact that we'll get $114 million to be able to help us with our recovery and continue to help our tenants and our visitacionors. and we said thater we using $14 million in this year's budget, but there was no conversation on how that has been allocated for this year. and then -- when i looked at the funds that we applied for versus

what you are asking us to fund, i saw some differences. and i know that these are not actual dollars that have to go, you know, to that very project, but i did see some projects on the application list that weren't on the funding list. so i also ask for a -- a list of applied versus funded projects so we can see exactly what we're doing with the arpa funds. and since we didn't have numbers of expenses and it seems that if there was a big number that said "other," we would have some kind of description of what the "other" is, because if you have 10 more of the budget out there

with no explanation, it's going to raise a question. so it would be great if at least we can have more detail on, you know, all of the other categories, you know, like other current expenses is $14 million in 20 -- it's $15.3 million for the next two years. so just it would be great to know what "other" is. and i may be the only one that needs to know that. yeah, so it's back to the others. and then -- i also had questions regarding a lot of the capital projects that were answered during my briefing, and, again, today, but the capital improvement program that they went through today is different from the one that the staff

reports. so that got me a little confused. on page 17 of the staffing report, 3.7, there's a total of $208 million. versus your slide which is $157 million. and so is that because you took out some of the resilience money? >> yes, commissioner, the difference is the go bond funds and the general fund money that are in the staff report table that were not in the presentation slide. >> commissioner brandon: okay. so i think it would be wonderful if we're approving those funds within this budget, that we have a little more detail of what we're doing with $58 million. >> the go funds are actually -- that was the reason that we excluded it from the budget slides is because the go bond funds are not being approved.

in this budget, and so they're part of the cip and not the budget. >> commissioner brandon: okay. but they're listed in the staff report under funds for cip. >> that's right. >> commissioner brandon: or just threw me off a little bit. so i guess that we should know what the difference is between -- so is that you took out the total $58 million, is that the difference? >> i didn't take out the full amount of resilience funding, only the go bond portion of the general fund. >> commissioner brandon: got it so 8.1 is still there. so you took out 50. and that would be the difference. approximately. >> yeah, yeah, the -- what's in the slide deck that you saw today was port harbor funds, our own internal funds, as well as

arpa stimulus. >> commissioner brandon: okay. so, okay. i got it now. thank you. so i still have -- >> vice president woo ho: i was going to make a suggestion. you had asked some very detailed questions which obviously you would like to get answers to, this is before us as an action item, so i suggest two things. i don't know if staff can go through every single detailed question here, is to make sure two things. one, i think that it sounds like they may need to sit down and give you another briefing. but i also think that the next staff report should address these questions, so when it comes back for informational so that all of us can see some of the answers and want just commissioner brandon, so otherwise i would say a briefing but then it's just you who gets answers. i suggest that because i think we could spend a lot of time in this commission meeting trying to get all of the answers and without information presented in

front of us in presentation format, it would probably be hard. commissioner. >> i wanted to say that commissioner brandon asked a lot of important questions. we did not have a budget manager during this period and we were down actually two finance positions it might be three, sorry if i missed the count there, nate and katie. but it was a year that we could not produce the budget book that commissioner brandon is used to getting which is a complete overview of every single category of expenses with an explanation under each object. and i believe that we will produce that book later. and we will produce that book later in response to all of the other questions i believe that we can have answers in time for the next consideration at the end of this month.

and i just want to concur with katie and nate that i have the right assumption there. >> thank you, director forbes. yes, we have talked through how we're going to be able to respond to commissioner brandon's questions, both on the operating budget and on the capital budget. and as vice president woo ho suggested we can include that additional information in the staff report and then also attach some documents to the next staff report that provides each of the commissioners additional information and context. >> vice president woo ho: thank you. and then my next questions were -- >> commissioner brandon: we discussed the southern waterfront beautification fund and we did try and go over it yesterday. but i just think that it is best that we know where -- where we

are, what is still owed to it, and why we're appropriating what we are. but is that appropriateiation, what is owed for that year? or it backup? you know, from what is owed before. because i think that all of the commissioners are up to date on the fund and why it is there, and how we have appropriated funds to it and how some years we did not appropriate the right amount. so we are trying to play catch-up. so it's great to put that we have an allocation towards it, but we still need to know where we are with it, and how it's been appropriated. so i would really look forward to more information on that. >> we will, ma'am. >> commissioner brandon: thank you. and then it really concerned me when i saw that we applied for funds to help communities

impacted by covid. and i saw that we had allocated almost $2 million to youth employment programs, which i didn't see anywhere in the budget. and i also saw that we were doing race equity, that and staff training outreach for a million dollars. and also small business loans. so i want to make sure that those things that we applied for hopefully will get into this budget as we move forward. and with that, i know that you were short staffed, and even short staffed you did an incredible job. i still have a lot of eug outstanding questions but you guys did such a great job with this budget and pulling everything together and trying to allocate the funds appropriately to help us to continue to secure the waterfront and make it a viable place for everyone to want to visitacion. but i do think that in the

future that we should have two separate items, because it is -- and i know that the arpa funds made it difficult because you're using some for both so you tried to condense everything, but i think we -- we did a disservice to the budget. we did a great job with the capital improvement plan. so, thank you. those are my comments. >> vice president woo ho: sorry, i am sorry that i cut you off earlier, i thought you had finished questions. commissioner gilman. >> commissioner gilman: again, i want to echo to the staff that this is a lot, it was incredibly comprehensive and i look forward to hearing the answers to commissioner brandon's questions. i have one question and then i have some overall comments. the only question that i would like maybe to dig a little deeper -- and first, it goes to the arpa funds and before i ask the question about wanting more

detail, i want to acknowledge, one, that i was not able to have a briefing so i'm apologizing if this question has been covered. and, two, as someone who works in other covid-related funding in the area, it's not related to ports but related to other issues, i want to really commend the staff on how you outlined and the transparency of the uses of the arpa funds. many communities with their funding and other covid relief money have not articulated or shown other departments the transparency of how funds are being allocated. so i appreciated that with the staff and speaker pelosi worked har forward the funds. so i wanted to give that shout out. and my question is that i would love to understand more if i missed it in the staff report and i can also be briefed offline -- supporting the clean and safety waterfront for

tourism. i would love to dig a little deeper into what the plans are. i know that it's only $5.8 million, but it was $9 million in the current fiscal year. so i would just love to understand that a little more deeply. it was one of my questions. and then i also just really want to say that i do think that it is smart and i think if we're going to recover as a port, we need to ramp up our staffing and particularly the staffing in the real estate group around leasing. i'm highly concerned about the number of vacancies that we have on the waterfront. i understand your base assumptions for the restaurant spaces, but i believe that it's going to go towards your scenario of eight of just walking by. and when we don't have a master tenant who is responsible overall for the space, the way that we do, as an example of pier 39, and the leasing is our responsibility. i know that we have talked a lot

about ramping up that position and with different leases and direct leasing also and particularly for restaurants and bars and commercial spaces. so i really do support the staff resources and bringing back up the staffing levels for the waterfront. and also particularly in the maintenance and maritime division. so i did want to just make that statement and with that i don't have any other questions. >> vice president woo ho: okay, thank you. well, first of all, i want to commend you, katie and nate and to your staff that you mentioned, marilyn and mary ann for the great job that you did with the short staff that you had. this was a very, very comprehensive presentation. and while i think that it is good to separate out the operating and the cap-x in some ways to be able to tie the two also helps to give us a sort of overview of everything. so i think that was actually helpful. my questions are more related to

at a more top line level, since there's a lot of detailed questions that we will get more information in the next round. and i wanted to mention just in terms of the city's assumptions whether the tourism number -- and when there was discussion of separating out the international tourists versus domestic. but my sense is that domestic tourism is definitely on the upswing. people need to go places. everyone that you will talk to are traveling somewhere in the united states because they've been cooped up so long. is that tourism number on the low -- really, is it impacted by international tourism? which i think as we see now that more countries are dropping all of their restrictions and if the united states were to drop restrictions i think that will bounce back quickly because people haven't been able to travel. so i don't know if that was a difference in terms of assumptions on tourism? because i don't think that domestic tourism is going to be deflated, i think that it's

going to come back fairly quickly. i mean, just talking to people that i talk to, everybody is traveling somewhere. they just want to go somewhere. they've had it. so just like to get your answer on whether the city took that into consideration. that's my question i'm on. >> i'll start and nate can fill in details. the information that we've gotten from the controller's office is looking at tourism in three buckets. leisure, fitness and convention travel, with leisure returning first. and as we have seen and as you have mentioned it's begun to return already. business is coming next, and then convention travel being the last to really come back. and that's really what they're talking about waiting until 2026. i am not aware that they have broken for leisure trough will t

they have distinguished with domestic travel versus international travel. nate, do you know if they've gotten that level of granularity, in the assumptions that they have made? >> no. that first third that you referenced of leisure travel, you know, that encompasses both the domestic and the international travelers and they're not splitting it out by international and domestic. but, commissioner, you're absolutely right. we do work with the airport and comparing data and the data at sfo show that domestic is definitely on the upswing. but the international is far behind. you know, i think that the u.s. has opened up a bit but there's still quite a bit of complexity in navigating both getting into the united states to visitacion and then going home again. and until that becomes a much more predictable and reliable process, i think that the

international travelers are going to continue to lag. >> vice president woo ho: right in the tourism numbers specifically for the port, you already said about a hundred cruise calls, etc., we have put in the most positive assumption on tourism as far as cruises were concerned, because that is with the waterfront specifically. you said 30,000 passengers i think that you mentioned earlier, but i think that is not anything normal. i think we have been up to 300,000 a year as i recall in the past and that could come back quickly. commissioner burton, has his hand up and go ahead and i will continue afterwards. go ahead. go ahead. >> commissioner burton: out of curiosity, how many items do we have left? >> vice president woo ho: we do not have -- i think we have two items after this. >> commissioner burton: just wanting -- oh, two. okay, thank you. >> vice president woo ho: okay. all right, just quickly, i just wanted to understand in terms of

your projection. just what was the fund balance at the end of 2020 to 2021? so i'm just trying to understand where your projections -- where does it get us back to? what year do we get back to where we were almost pre-pandemic? >> well, 2021, we ended it roughly $50 million. that, you know, the prepandemic, i guess 2019-2020, katie correct me if i'm wrong, it was high 60s, i think. >> my recollection is 68. at the end of the fiscal year -- the pandemic began in the spring of 2020, and we had, like, two-thirds of the year of a normal year. >> vice president woo ho: okay. so all i'm trying to suggest is

that your projection that we saw in the very beginning will take us back to pre-pandemic levels in terms of our balance sheet and our -- >> yes. >> vice president woo ho: it's important to know where we are headed and that we are actually -- since we keep talking about economic recovery, that we have the fund balance standpoint, that in this projection over the next five years we will get back to that level. of course, now we want to improve upon it -- >> yeah, the fund balance for me is one of the best -- the most significant accomplishments of this budget that is really enabled by the arpa funding. receiving that $100 million plus in stimulus is really going to help us to build back fund balance, so that at the end of this five-year period we're looking at the estimated fund balance of over $100 million. and that feels like a significant accomplishment. >> vice president woo ho: okay. so that gets us back to where we

were plus some. >> yes. >> if i may add vice president woo ho and thank you, katie and nate for those explanations and fund balance as you can see on the projections on figure 1.2, does get back to pre-pandemic levels and holds at $105.1 million, so very comfortable and appropriate fund balance levels but i will note that the balancing line is capital. so in those out years our capital budget is so small, it barely covers dredging and the bare minimum. so while it looks balanced, i just did want to note that is really where we're showing the deficit in our revenues to cover both expense and cap-x. >> vice president woo ho: right so that means that we have to continue to look for sources and hope that there will be some other infrastructure funding, other than our own operating revenue, to help us bridge that gap. okay. so my next question -- i have

two other questions and i don't want to take up too much time. really, you know, you talk about 30 projects over the next two years, is that correct, and we're going to spend about $93 million. so -- which is definitely a huge increase over what we've ever done in the past in terms of any year before the pandemic. and we cut our cap-x. so my question relates to the ability for us -- and you have a deadline of june 2024 -- my question is about execution ability. the execution ability to spend the money, not only spend the money, i mean it's easy to write checks, but to manage the projects. and so i don't know that i guess when you say june 2024, whether that means that you have written a check to somebody or whether you have completed the project. because i am concerned that you have some extra resources in your budgets, whether you can actually execute on time with the constraints that this money

that has been given to you or given to us. and so the execution ability, and i would address that question to -- it's obviously -- i mean, this is a finance presentation so it's an execution question is of the departments of the port. so elaine, maybe that is something to address next time, to give us a sense of confidence that you can execute in time. and to maximize and get the full use of the funding that leader pelosi has graciously been able to secure for us. >> absolutely, that is a tremendous question. and staff did look very carefully at execution. that was one of katie and nate's reminder every time that the group met to discuss capital was that deadline for arpa and confidence that we could execute execute. our chief harbor engineer has been at the table for these conversations as well as our assistant port director, mike martin, who really has

operations under him. and we're all very confident and, katie or nate, if you would like to discuss those key arpa projects and why we're confident, we were careful in that selection. vice president woo ho, we didn't pick projects where we saw implementation risks, permitting risks and cost risks. we picked more stable capital projects that we feel a lot of confidence that we removed risk or understand that we can implement on time. >> vice president woo ho: okay, so that may answer part of commissioner brandon's questions what was defunded during the pandemic and what was put on the list because her concern about projects defunded and if you have an execution risk with some of the projects that you feel that you cannot complete in time, then that may be a reason why some of the old projects are not back on the list. but that's something for you all to explain next time so we're very clear, because i think that there is a constraint here that we have to work with.

okay. my other question is related on the equity side which i thought that you just talking about the finance aspect of it, but it seems like there's an opportunity to talk about, you know, you're going to have $90 million and some are contracts with outside vendors and that is an lbe opportunity which we should highlight as well in the equity section of this budget. which i am just saying that it's probably in your thought process, but it was not articulated, but i think it could be articulated, correct? >> yes. absolutely. absolutely. when we have capital projects and our professional service contracts, that's a huge opportunity to bring in local businesses and we've been focusing and asking our primes to find bipoc businesses and to support all of our local businesses and they have done so with new partnerships that we're excited about and we see more equity and a better racial breakdown in our sub-contracts,

our sub-contracts today, than when we started this effort. so it is absolutely an equity opportunity and something that -- and commissioner brandon, this is very close to her heart and her efforts, we have seen is this key -- this is a key opportunity to enrich and to enhance communities. >> vice president woo ho: we do tie a lot to the strategic drivers in our plan so this is something that you will want to highlight. it's part of the d.n.a. of the port to think that way, i'm just saying that it's an opportunity to continue to message that this would be part of the budget process as well is to be able to sort of -- it's an opportunity for us to give lbe business and so i don't think that we want to miss that opportunity to at least mention it. the last topic is not related, and you mentioned it and it was a very good point in terms of saying that we have this policy and i would suggest that maybe we need to take a look at this policy again.

this would be a new business item. whether the 15% of operating expense is really the right policy, given that you said rating agencies question, you know, whether you can only have 15%, is that really enough. so maybe that policy needs to be revisited at some point and to increase it if it's not the right number as a policy going forward. and maybe you have a counter argument but least we should have a discussion on this, you all agree? >> absolutely, we do. elaine and i were having this conversation this morning. >> vice president woo ho: okay, all right, that's my last comment and i think that at this point, thank you very much for a very comprehensive and very excellent thorough report and i think that we will be interested in you coming back and giving us more information. next item. >> clerk: that would be item 9a,

an informational presentation on the port's structural assessment program and the overview of load restricted facilities. >> hello, good afternoon, commissioner -- vice president woo ho, and commissioners and director forbes. i'm the chief harbor engineer for the port. i'm here to present an update on the port structural assessment program. which regularly inspects the facilities for structural damage and deterioration. we were last in front of you with a program update in 2018, we're a little off cycle, and i think that you can understand why with covid and everything that has happened. next slide, please. so the structural assessment program manages approximately 200 buildings and 150 marine structures and the goals of the program are to ensure safety, inform port staff, tenants and

the public of conditions or building conditions and load restrictions. and our goals are to inspect regularly. i should note that the program does not typically discuss the vulnerability to earthquakes or sea level rise. those are other components. we're mainly concerned about the gravity load capacity of our facilities. there are two structural components to the program. the rapid structural assessment or rsa, has been in place at the port since i believe the early 2000s. and this facility inspection and repair project assessment or firpa that nate has spoken about earlier, he's kind of stolen my thunder, that is something that came into being in 2019.

next slide, please. so the rapid structural assessment is a regular above water drive-by inspections that look for obvious signs of deterioration. and it allows us to quickly set load restrictions and inform port staff and tenants and the public of any safety implications. we use a rating system. green is unrestricted use. and that allows for a facility to be used as designed. the yellow tag is a restricted use, reduced live load, or uses limited to prevent excessive weight on a facility. and the red tag facilities are fully restricted and typically barricaded to prevent access.

and in 2015, the american society of civil engineers published waterfront facilities inspection and assessment. it's a manual of engineering practice. the manual sets standard for the marine structures and provides guidance on inspection intervals. the port has adopted the recommendations in the manual of practice to the rsa program. but we have -- because of covid and other internal constraints, we have fallen behind. and we have engaged consultants to augment our inspection efforts and so in the next three years, there will be an additional 60 inspections

performed in order to get us back on the recommended cycle. next slide, please. so the firpa project provides in-depth inspection of facilities and they are selected by our client division. so our real estate and maritime divisions that drive our economic interests -- we want to be able to determine costs to keep the facilities in a state of good repair. and it really does work as a capital planning tool. and, let's see, we -- oh, the other benefit is that we can take the -- these in-depth assessments and use those -- the structural assessments to augment the rapid structural assessments to keep a more up-to-date map of our facilities.

and what the firpa program does is that we identify life safety and regulatory issues which have to be addressed with some urgency. and then we also look at the maintenance issues with a 10-year, 20-year and 30-year horizon so that the capital program can kind of plan out the expenses as we're moving along. you can see from the last bullet that we look at our structural systems, fire protection systems and mechanical and electrical and plumbing systems. the building envelope, which is the waterproofing or the water tightness of a facility. and our accessibility concerns. with a facility. and, again, you know, we have used this information to make decisions about asset management or potential change of use and

our long-term capital planning. next slide, please. sorry. this is the map of the facilities that we maintain in engineering. it shows the green tag, yellow tag, and the red tag facilities as a whole. there are 37 yellow tag facilities. and 32 red tag facilities in the port inventory. it should be noted that green tag structures, especially the historic piers, they have repair needs, but they can still support the gravity loads that they're designed for. next slide, please. this is the list of firpa facilities that we've looked at in the year of the program that

we looked at them. and i'll just mention again that these inspections have augmented our structural rating maps and we have had to change ratings on facilities based on these inspections. next slide, please. so the next -- and the next four slides are just kind of close-ups of selected areas of the port jurisdiction. we're here at this slide shows the fisherman's wharf area and you can see the different load ratings that we've got for our facilities. the blue dashed outlines are the firpa facilities that have already been looked at. next slide, please. moving a little bit further south in the waterfront, just

more green, yellow red tags and a couple of additional firpa facilities. we should note that the roundhouse one and the roundhouse two buildings have just gone through the firpa exercise and i think that is one of the things that we can tie back to the capital improvement program. next slide, please. we're down to south of mission creek here with this map. pier 50 for the most part is okay. we are working on the southern apron at shed b now where maintenance is, and pier 54 is mostly yellow tagged and a little bit of red tag on the north -- the northwestern apron there. next slide, please. and finally we're down at the shipyard, and pier 80. you can see the different

facilities and their ratings. the firpa and 2021 firpa inspections focused in the southern waterfront, mainly the shipyard buildings where we think that -- or where our clients think that there is potential for revenue growth, or to be able to rent out these facilities, and also down at pier 80 at 501 caesar chavez. next slide, please. so a couple of examples of work that's been done to improve, you know, based on these ratings. pier 92 wharf had been -- i believe that it was yellow tagged. it's gone back to a green tag. port maintenance has rebuilt the wharf, new piles and new deck structure and new fender piles.

and we're -- and we're still waiting to finish up the fender piles, but it is work that is almost complete. and a similar project at the south apron and i will just mention that. next slide, please. so this is piers 39 and 29 1/2. this is where the alcatraz embarcasion site is and we had to do some worka at the deck to restore the deck, both above and below the actual deck. next slide, please. so -- and bear with me a couple more slides. talking about here -- i think

the next couple slides are about the mechanisms of the deterioration that we see in the port inventory. the left photograph is the east apron of the agriculture building. and you can see that concrete is falling. the steel reinforcing has corroded. and what happens with steel reinforcing is that it expansively corrodes. so it actually expands. and concrete can't take the tension very well. so it just kind of pops off. and that exposes the reinforcing even more and creating this cycle of corrosion that you see here. and because of -- because of tho reduce the load rating at the apron at the ag building to just light pedestrian access. the picture on the right is a similar condition at pier 33, to

31. and this was part of the repair work that occurred in the marine structural project 4 work. and so i think that it is just a nice images that show how this work can -- or how we can protect and repair the piers. next slide, please. so the other -- you know, the dominant material that we use at the port is timber. and one of the -- the by-products of the increased environmental protection of the bay is that the organisms that eat wood have really come back. and this is -- this is what happens. so this is the photograph on the left is a picture of pier 50,

the timber apron, and you can just see that the piles are gone. and so this is part of the red tag work that is being done to repair the apron at pier 50. and at pier 54, the photograph on the right, you can see that the conditions are not much better there. next slide, please. so in conclusion, the safety of the ports facilities is critical to tenant businesses and to the public and the port's day-to-day operations. the structural assessment program, which includes both the rsa and firpa programs provides valuable up-to-date information on the structural condition of these facilities. and the primary function of these assessments is to identify and to mitigate the public safety issues, but the

structural assessment program also provides a basis for our maintenance and repair programs, the capital improvement program, and land-use strategy. and so the restarted assessment program will be back in cycle in three years, using consultants to augment our inspection effort. i'd like to thank port structural engineer peter lohan for helping to prepare this report and the slide show and for the widespread use of the color orange in these slides. thank you. and i'm available to answer any questions about the presentation. >> vice president woo ho: thank you, for your presentation. let's open it up to public comment. >> clerk: okay, we will open up the phone lines for public comment and jenica is our operator and she would provide

on how to provide public comment. >> thank you, carl. at this time we will open up the queue for anyone on the phone who would like to make a public comment on item 9a. please dial star 3 if you wish to make a public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments are limited to three minutes per person. the queue is now open. please dial star, 3, if you wish to make public comment. >> clerk: thank you, jenica. do we have anyone on the phone? >> at this time we have no members of the public on the phone wishing to make public comment. >> clerk: thank you. public comment is closed. >> vice president woo ho: thank you. commissioner gilman? >> commissioner gilman: thank you so much for this report, and it is certainly daunting. and so i -- i wanted to just commend the staff and this shows

how much capital improvement and work we need to do. i have two questions though, and it's more based on your visual staff report. so you showed the apron of the agriculture building and that is okay. and we have office tenants in the agriculture business, and i assume that there's no life safety risk to them and those occupants? >> no, the apron is -- is i think -- well, there's light pedestrian traffic that's allowed there. so if there was a single person or two people walking out there, it wouldn't be an issue. the building itself i think is in better shape. >> commissioner gilman: okay, i wanted to gut check that and i didn't want to make wildly inappropriate assumptions. and then the only other question that i have is that some of the properties that were red tagged that you showed, some of them are cordoned off so people and

pedestrians can't access them. i have seen fencing and other things along the waterfront. again, i know that we're still in an economic recovery, so i'm not trying to include any fences, but there's also a better way that we could fence it from a beautification perspective, because some of them, particularly going towards pier 39, there's this -- that one pier is completely cordoned off, sort of right after it with fencing. and we just saw it the other day and we don't want people walking thought and it's under improvement. and it could help particularly in the southeast sector of the waterfront to help with beautification and to bring more people to the waterfront. so those are ancillary comments and i thank you for the report. >> okay, thank you. >> vice president woo ho: commissioner burton. >> commissioner burton: yeah, i might have missed it, what is the total cost of the pier

repairs? >> so, the capital backlog that i think that nate and katie reported on is on the order of $2 billion. >> commissioner burton: what did he say? >> $2 billion to get us back to a state of good repair. >> commissioner burton: billion with a b? >> yes. >> commissioner burton: hmm. maybe we could strike oil. >> vice president woo ho: okay. any further questions? okay. commissioner brandon? >> commissioner brandon: thank you, rod, for this report. it was very detailed. i think that it's one of the more detailed reports that i have seen and i think you guys

did a great job on the assessment. like commissioner gilman said, it is daunting, but thanks to speaker pelosi again for helping us to crawl our way through this with the resources to be able to at least repair some of them. thank you. i appreciate it. >> vice president woo ho: thank you, rod. i concur with my fellow commissioner comments. you did a thorough job and it was actually helpful to have it in conjunction with what we talked about earlier in the budget, to understand what firpa really means and you illustrated really clearly the need. and it was detailed and self-explanatory and i have no further questions. thank you very much. >> thank you. >> commissioner covington: carl, income item. >> clerk: an informational presentation to the proposed update to the port's write-off

policy. >> good morning, deputy director for real estate, and here to give an informational presentation to you. i want to recognize several folks who helped me with this, rona sandler from the city's attorney office, and mark roisivoi who retired last year who began this process and the staff and finance who helped the write-off that i will convey to all of you tonight. next slide, please. i'll go over defations and let's get our definitions correct. and our update to the uncollectible balances write-off policy. a sampling of the 10-year period of write offs and what those mean and the proposed new policy. i would love to go over next steps and to hear any refinements to make before we bring it back for recommended action. next slide, please.

so just as a background, i was before you last to talk about accounts receivables in november. you will -- you might remember from some of your monthly reports that we have a large accounts receivable backlog, a balance of about $29 million. the latest might be a bit different from that number. i saw that one came out a couple days ago. during november, we talked about settlements quite a lot. we talked about criteria that staff are applying to tenants who we want to get back into good standing that will require us giving up something and getting something in return. those are settlements and are different from the write-offs. and the write-offs i will define in the next slide but it's a process that comes in to the accounting books if a settlement is unsuccessful and if a tenant leaves and there is an outstanding balance that remains. next slide, and we'll go over the definition a little in

detail. so the accounting action that essentially zeros out or reduces an unpaid balance on our receivable ledger. this starts when the tenant or a licensee has left the premise and all of the amount is due. only when they are gone and we regain possession of the property would we start this process. or start toward on the road toward a write-off. and the other path is, of course, litigation or we can -- litigation can end up at write-off. so the city has policies on only writing off balances after we have exhausted essentially commercially reasonablests to reasonable effortsto collect th and this is different from a settlement and the tenant remains in place and we have some sort of disputes or disagreement about what is owed and we come to an agreement where typically the tenant will pay us money upfront and over

time and they remain in place. so we're not changing anything to do with the settlement agreements. those policies require port commissioner approval for any settlement where the port concedes more than $25,000. no changes there and that remains in place for tenants who want to remain at the port and who we want to keep. next slide, please. and we have operational efficiencies, and as i described, i will describe in the future, the need for the updates to the policy will really help the efficiency for staff so that folks aren't struggle with a multi-decade old policy and trying to apply that to today. every time we do it seems that there's friction with people having different interpretations on how the policy should applied. so this is really about efficiency and just modernizing the policy and having clarity

going forward. next slide, please. so if you direct me to come back the future action would be to replace the resolution number 8483. as i had mentioned this is really about efficiency and clarity and modernizing that 1984 policy. as a framework for the overarching policy, the city charter and admin code, their governing policies remain in place and our policy is nesting under them. the city charter designates the city attorney as having approval rights over write-off. and the admin code provides the city controller with an important role in approving the write-off as well. so proposed policy that is attached to the staff report in draft form would clarify all of the staff that port staff would go through in order to get to a write-off. next slide, please.

just as background, and this might explain why we haven't updated the policy to this point. we don't do this very often. we typically do it a couple of times a year, on average three times a year. the total amounts for an average of three write-offs totaled $263,000 per year and it's not a thing that we do very often but this is something that each time we do that i'm just looking for ways that we can save money on any key actions that we are taking and this is a way to update the policy and i promised to do it before he retired. so that's the other reason. and focusing in on the new policy. the old policy had good steps but we really fleshed out the steps in a lot more detail in order what we will do to get to the point of writing off a balance. first, we have to have possession, that's the key thing. and the second item port staff

will work on is determining whether or not the account is upcollectable, or not cost effective to pursue. so this means that we're billing the entity that owes us some money, we're making attempts to collect via phone, email or a letter. and we're preserving all of the steps that we have taken so that if we do end up going to court that we have that evidence, before the tenant left had worked on a payment plan or a settlement agreement if we're able to get to that offer with the tenant. and we will use any security deposits that we have to reduce the balance. and we do a preliminary business and asset search. so that's the steps that the port staff would take and if the debtor has funds we move to step three, which is on the next slide, please. so if we -- if we find that there might be a reason to conduct this, and we pursue the balance, and we provide that to

the deputy city attorneys and they do their own asset search and they'll go through an effort to assess whether or not we'd be successful in litigation and whether or not we'd be successful in collecting. in looking at the old write offs i found that we might have gone through a court action and we were awarded moneys that we couldn't collect. so in some cases we might go through the litigation and win the case, but can't actually collect because the entity has dissolved or the person has gone bankrupt or the businesses have gone bankrupt and there's nothing to collect. so we'll do that assessment with the city attorneys and then together we would assess whether or not it's worth to pursue the case and to go forward with litigation or to go straight to write-off. and if -- if we go to court or not, once we get to one of the three conclusions under five, meaning the debtor has no asset or has few and we might want to

pursue if a tenant left damages on the property or they're similarly situated tenants, there might be reasons to pursue the balance in court that might outweigh the money that is actually owed. so we go through all of that analysis and potentially win the case and not collect. and the last step is once that we have exhausted the options and we have gotten whatever money we're able to get, then port staff -- and we wrote here that the entities involved would be the den tree director and the fiscal -- deputy director and the fiscal officer at the port. we would amend to be the executive director and her designee, to be really clear that it's the executive director and whether or not she assigns it to -- or to the fiscal officer that we want to give her that flexibility. so then port staff would get together with the city attorney,

the controller, and consider the sign off. and we would report the write-offs to the port commission annually and we send monthly reports and i think it depends when the write-off occurred that we would send the port commission that report on the write-off. so that in a nut shell is the write-off policy as proposed. and i'm happy to take go questions or comments and when appropriate i'll bring it back for action. thank you, commissioners. >> you're muted vice president woo ho. >> vice president woo ho: thank you, rebecca, for your presentation. now let's open it up for public comment. >> clerk: we will open up the phone lines to take public comment. jenica is our operator and we'll provide instructions for anyone on the phone to make public comment. >> thank you, carl. at this time we will open up the queue for anyone on the phone

who would like to make public comment on item 10a. (please stand by)

>> -- we don't have so many, but it's good to update the policy to make sure that staff has leeway to take action and move forward on some of these that could take a lot of time, so thank you so much for the report. >> thank you. >> any comments? commissioner burton? >> what took so long? this hasn't been updated for how many years? >> yes, commissioner. it's -- it's true. i don't know what took so long.

>> i can add for rebecca, commissioner burton. >> right, right. prior to this administration, nothing was done for, like, 30 years? >> no. what happened was the policy was in place, and the write-offs happened very infrequently. it got out of synch with the write-offs, and rebecca has come forward to fix -- to correct the out of date policy. >> the question was why it took so long?

>> it took so long because it priority prioritized, and it happened irregularly. >> it happened irregularly until the pandemic or what? >> exactly, so we were going one maybe a year. >> okay. so let's say maybe the pandemic and just some economic things, it wasn't that big a problem for the port? >> yes, exactly. >> okay. thank you. >> you're welcome. >> commissioner [indiscernible]. >> i have no comments, and like commissioner burton said, we don't have the crescendo with folks having almost [indiscernible] from a variety of different tenants, so happy

to see it move forward. >> thank you. so rebecca, you gave us the number up until 2018, obviously, prepandemic. so at the moment, with the amount of receivables, how many of those would be affected by this new policy? >> it's hard to say, and i do have a number in my head, which we talk about when we look at the balances and we all make assessments as to how much we think we're going to collect and how much do we think we won't collect, and it's a -- it's a reelly large proportion, but i think i'd like to do a little bit of work to come back with that sort of information. but we are, in order to help the finance team understand where our catch position will end up, we do make an assessment as to how much we think we'll bring into the port

and how much will be written off, so if it's okay, i would like to come back with that. >> i know you're trying to work with the staff. i notice that you have a $25,000 limit before it comes to the commission for sign-off, correct? >> i think that -- so that's a bit -- that's to do with settlement agreements. so anything above 25,000, we bring to the port commission for aful pro. for write-off, the whole process is we go through the process for the port commission. so we have a write-off that we

prepare and send to you and the city attorney, and then, we would state what the balance is that we are writing off, so it would be asked -- >> so what i would like to suggest, just so that we are [indiscernible] would be an annual information for [indiscernible] how much, and since we have this backlog that we are trying to work through, i would appreciate that you do give us an average ticket size in your next presentation, and that we should decide if there was anything over a specific amount, even if you've met all the criteria, that perhaps we should be informed [indiscernible] so we know. and [indiscernible] there is no settlement route that you've decided to take [indiscernible] good criteria. this is very different in the

normal world [indiscernible]. >> vice president woo ho? >> yes. >> yeah, that just raised the question for me. i thought this raised the limit for us, so there would be no commission notification until after it's completed? >> that's correct. so long as we exhausted all of the steps, that there isn't much policy discretion that you guys would have, and we try not

to bring action items to you where you don't have much of a choice just out of respect for the commission's time, so we thought we would notify you after we go through litigation, so we feel -- i feel director forbes has stepped on it, but i don't know if you think there are specific tabs. >> well, i think this is an excellent question, and this is why we're having policy review to get it right, and i think rebecca hit the nail on the head. we don't think there's a way. so the tenant is not in the property, so the property is no longer our tenant. we've looked at all the -- we've done the research to see assets, where we could collect those assets, and it's gone through legal review and controller's office. so by the time it's done with the analysis, the city's understanding is it's

uncollectible, so if we bring it to commission, it's already deemed uncollectible. i think we could bring big write-offs and e.d. reports for you for transparency, and the annual report, we absolutely can perform, but that is why we put the delegation to any amount because we felt it's an uncollectible amount. >> you could end up with a hybrid. you thought you could go the settlement route, and in the midst of the settlement process, the client accepts the settlement balance, and it could be a huge amount. so i think you're going to have to decide -- and i guess we should be informed. i'm not trying to get involved in this, but there could be a

hybrid situation and how you would handle that with the commission. so i think that's something that we should be thinking about, especially if it exceeds a certain dollar amount. make sense? >> could i give you the hybrid amount [indiscernible]. >> so we're more aware. i think you just need to figure out -- so we're not surprised. i think the whole --

>> i think our city attorney has joined. was there something you wanted to add? >> it would cost us more to try and litigate the matter and try and locate funds than to recover them from this tenant or this situation, contractor and tenant. so if it's a hybrid situation where we're talking about a true settlement, that's a different course of action that we would be taking, but for

this write-off, there's already been a determination with the controller's office working with everyone to try to locate funds. >> any further comments? >> i think i wanted to add -- i'm sorry, vice president woo ho. normally, when we're doing settlement delinquencies, we give you parameters to go through in negotiation. we've gone through those, sort of giving you the parameters and marching orders, and then, in the midst of that negotiation, the person says we're out, stops communicating with you, they [indiscernible]

they owe us, you know, $10 million in back rent. i actually trust the city controllers to make the determination on the write-off. i think when we were involved, we are giving good faith instructions on staff on how to negotiate, and then, that breaks down. correct me if i am wrong, but that's what i heard our fellow commissioners wanting to have more transparency and issues about. i think it is more about

communications, not about delegated authority. >> any further comments? okay. staff is clear now in terms of what our expectations are when we come back again? >> yes. we'll come back with a disclosure information policy -- i'm sorry. we'll add how we'll inform the commission and make sure we give transparency to the commission. >> i have good ideas now. thank you so much. >> next item. >> clerk: that would be item 11, new business. >> i recorded three items of new business, from vice president woo ho. one to have a presentation on how the port is connecting communities to our waterfront. this is focusing on signage and mapping, to really focused on disadvantaged communities and

all our local visitors and neighbor serving, too. i asked us to consider the operating follows, specifically, the 15% fiscal reserve, and the department believes that reviewing our fiscal policies is timely, so thank you for that suggestion. and the final one is a write-off on the annual policy. we'll decide if that is an informational item or a policy that i would send over for your consideration. any other business? >> commissioners, if there's no other -- >> i'm sorry, vice president woo ho. i have one other item of new business for the docket when we get to it. director forbes, i was hoping we can invite sfmta back to our commission. it's been raised by several community members that when the

embarcadero freeway was demolished there were promised made by sfmta. i know this isn't under the jurisdiction of the port, but it affects the waterfront, particularly the s.f. golden gate garage, which had been discontinued, even previously to the pandemic, and since we have benefited from the freeway being torn down, we need millions and millions of visitors back to our waterfront, and i think that led to our waterfront terminal being more successful. i think we should invite the sfmta back for a presentation on the progress being made on these projects from the neighborhoods to the

waterfronts. >> director forbes, you recorded that? >> i did. thank you so much. >> okay. if there's no other new business, is there a motion to adjourn? >> so moved. >> i will second that. >> roll call. [roll call] >> meeting is adjourned at 5:47 p.m. thank you very much. >> thank you, everyone. >> good night, everyone.

>> hello every one. thank you so much for your patience. good morning i am san francisco mayor london breed with dr. colfax giving an update what is happening with omicron because we are anxious to know when is this going to start dying down? good things are starting to

plateau. it doesn't mean we take our guard down. even though we are still seeing additional cases, even though our hospitalizations are very high, we have the capacity to handle what is coming our way, we are starting to see just a number of plateaus and trends from other parts of the country afternoon world show the people ahead of us and the cases skyrocketing. we are paying very close attention. it seems like san francisco is behind all of that. we are following a very similar pattern to other cities across this country. if that is any indication plus with san francisco being 82% vaccinated it is really hopeful for the future and hopeful that we will continue to move forward. we will see some additional improvements as the days go on.