>> chair borden: february 15th meeting of the sfmta board of directors. please call the roll. >> clerk: it's february 15th, apologize for that. [ roll call ] we are expecting director yekutiel. off a quorum. item 3 announcement of a prohibition. number 4 approval of the minutes for the january 18 and february meeting. >> chair borden: are there any changes or additions to the meeting at this time?

minutes from those two sessions? seeing none, we'll open up to public comment. this is the time for members of the public to comment. please read the number and the access code. >> clerk: for members of the public who wish to make public comment. the phone number to use is (888)808-6929. access code is 996-1164. >> chair borden: are there any callers on the line? we'll close public comment. this matter is before the board. >> i move the item. >> second. >> chair borden: please call the roll. >> clerk: on the motion to approve the minutes. [roll call vote]

the minutes are approved. item 5, communications. >> chair borden: we'll be adjourning in honor of daniel murphy and bob holt who passed away recently. daniel that created the sfmta as we know it today. he was part of the group rescue muni. if someone can please mute yourself. i'm getting feedback in the background. he was want of the founding members of the citizens advisory council. his love of public transit was deep it's because of his efforts that the sfmta is what it is

today. he's the reason -- he will be missed. bob plant was a long time disability transit and civil rights advocates. he worked with staff to work on mobility systems. mr. plant holds a regular meetings. he was just at our meeting. he was often tough critic of sfmta but we always welcomed his feedback. he had great insights. i feel fortunate that mr. plant is one of the first advocates i got to know going back to the late '90s. in addition to his work with transportation issues, he served on the s.f. mission, he was founding member of sunshine and served on many grand juries. he left his mark on san

francisco. he will also be greatly missed. at the end of the meeting we will adjourn in these two honors. due to covid-19 health emergency this meeting is held virtually all members of staff and public are participating via teleconference. we ask the public to participate remotely by writing to the board or leaving a voice mail message. for all of those who did, we received them and appreciate the your comments. if we lose the phone connection during the meeting, we will pause until connection can be reestablished. i want to thank everybody in the background here. we have another month before we're back in person. i want to thank everybody behind the scenes who makes these calls

possible. if you are on our line and you're not speaking, make sure you are muted. if you're a public commenter, if there's an item you want to speak to, remember to press 1, 0 to add yourself to the queue. >> clerk: this meeting televised by sfgov tv. there's a time lag between the actual meeting and what members of the public seeing on sfgov tv. if you wish to comment on an item, please call the phone line when the item is called. that number is (888)808-6929. access 996-1164 to address the board dial 1, 0. please make sure you're this a quite location. you'll have two minutes to provide public comment otherwise noted by the chair. i will announce 30 second warning and when time is up. item 6, introduction of new or

unfinished business by board members. >> chair borden: are there any items under new and unfinished business? >> director yekutiel: thank you so much. one i think i said this before, i'm on a world tour of all the merchant associations, c.b.d.s and business improvement districts in the city and county of san francisco. i think there are over 50. yesterday, lakeside village and just hearing what the transit issues are in community on commercial corridors, i want to let folks that i'm doing that and i'm trying to represent you well and listen a lot and bring those action items to the agency. i want to thank staff for all of the e-mails that i have sent about what issues are percolating in the small business community. i appreciate that. that's the nice part. less than

nice part, this is new business. i know we talked about this here and there. we talked it internally. i like us to ask the agency and ask my colleagues to make sure we are keeping our infrastructure clean and presentable as possible. i'm talking about our bus shelters, any piece of property that we own. bike share, station platforms. we have a lot of work to do on this. we had a budget session. it is dispaying -- it is dismay to see our own shelters in disarray. i wanted to highlight it and bring it up to folks because i think we're going to need to do

better if we're going to earn our folks back. >> chair borden: thank you. any other additional comments from other board members at this time? director eaken? >> vice chair eaken: thank you. i wanted to call out a muni operator that i thought really did outstanding service recently. her name is maya malone. she was just going up above and beyond to make sure that every single person riding the bus is wearing a mask properly. i'm frustrated when i see people not wearing a mask on the bus. this particular operator was not going to have it on her bus. he was so happy to see that kind of service from our operator. i wanted to recognize that. >> chair borden: thank you for that. any other comments by board members? i will acknowledge that i had the pleasure of participating

into black history month with sfmta both virtual and in person last week over in our -- i want to thank the officer of racial equity and belonging for putting on those events. with that, i will open up to public comment. now is a time for members of the public who like to comment on new and unfinished business by board members. those will be the comments given gi director yekutiel, director eaken and myself. are there any callers on the

line? directors, we're having an issue with the call-in line. if we could please have three minutes to recess and unbridge and rebridge, i appreciate it. >> chair borden: we can say 1:15, which is four minutes. we'll reconvene at 1:15. we're going a brief recess to rebridge the

>> chair borden: based upon the comments this commissioners that spoke. now is your time to put yourself in the queue and press 1, 0. are there any callers on the line? with that we'll close public comment. next item. >> clerk: item 7 director's report. >> director tumlin: as usual we start off with our vision zero report. i am sad to report that on january 29th at 46th avenue and lincolnton way it was a fatality involving an uber vehicle and suspected stolen vehicle. the driver was driving a at very high rate of speed and fled the scene resulted in the fatality of a passenger in the uber vehicle. our team investigated the site immediately after the crash and

found the traffic signal and all of the usual protections to be in place including recently traffic devices for 46th avenue. there's no recommended response. it seems to be indicative of this pattern we have motorist behavior and very high rates of speed driving up our fatalities during covid. we've also published a blog and have been doing fair amount of media reporting on our transit service update and omicron. we have struggled with an extraordinarily high number of employee absences of the omicron variant and its impacts. currently, we've had 460 employees tested covid positive since the beginning of 2022. just over the last six weeks, we've had 460 positive compared to 325 positives for the

entirety of calendar year 2021. we've also been impacted by staff who have symptoms of covid-19 and have not yet gotten the results from their test or have been in close contact with somebody who tested positive or who had to miss work in order to take care of children or other family members. as a result of omicron as well as our previous staffing shortages, all of this had a pretty significant impact on muni service. we're currently missing about 20 to 25% of our scheduled muni service which means that all riders are having to rate longer than usual for their bus or their train. we're doing everything in our power in order to deliver more service as well as to regularize the existing service despite complete absence of predictability about which operators will show up on a

given morning. we're using as much overtime as we can and we're minimizing service gaps by taking advantage of our available extra board and flexibility we got in our of to in order to prioritize service to neighborhoods and to locations like chinatown. which is experiencing much needed additional travel during lunar new year. we're trying to get out as much customer information to let people know about our reality and to continue minimize negative impacts on service and customers and protecting the health and safety of our workforce and our passengers. omicron is also wreaking havoc on our plans for service restoration. which was supposed to get moving next month. we are going to be able to move forward on our february service improvement because those were

resource neutral. this saturday, we will be extending the j church to embarcadero station and expand rail service until midnight. this will allow us to match bart service expansion and ensure good coordination for transferring passengers in all of the downtown subway stations. we are going to postpone our other service improvements. both because of the shortage of actual operators but also the way in which omicron has disrupted our training programs. we have had a significant shortage of people being able to graduate in our training programs and are going to have to go through an additional two training courses in order to get back up to the staffing where we were expecting to be by march. for plan is to again as always, prioritize lines serving our equity neighborhoods and following our muni equity strategy. we'll be able to restart the 8x

and bx in mid-april and to minor but important extension of rutland. it will give us the staffing we need if we're not thrown another curve ball which has been the story of covid. i remain incredibly proud of all of the transit staff who has pivoted left and right and forward and back to center every single month as covid has continued to throw us whatever covid is throwing us. the chinese new year parade will continue this year. we are delighted to be participating both on sfmta float on a motorized cable car but also in supporting the parade through all the usual

things we do with our parking control officers and transit team. we'll continue to have teams of transit ambassadors stationed on the buses and at bus stops throughout chinatown in order to assist riders support bus operators and keep everyone particularly our api customers safe doubt lunar new year month. we want to report that supervisors chan and peskin has provided funding in order to allow the portsmouth square garage for the remaining month of february. the board of supervisors have provided the funding to make sure that the garage authority and sfmta are all made

officially whole while allowing that program to continue. as chair boredden mentioned. , sfmta office along with our black and african-american alliance group have whole series of events celebrating black history month. we have already reported to the history of civil rights leaders who helped to ensure that transit was free legal discrimination since the mid-19th century. two of our transit facilities are named after african-american transportation pioneers. walter flinn was the first chairperson of our board of directors. curtis green became manager of muni in 1974. he was the first black general manager of any major transit

system. finally i wanted to add for the first time this year, we will be decorating two of our vehicles in celebration of black history month, highlighting the history of great transit leaders in promoting right for african-americans and all san sn franciscans. additional updates, last tuesday, the board of supervisors considered the muni reliability and street safety bond measure for the june 2022 ballot. there were some minor amendments of the board and that means that today, the board will consider its first reading of the bond and if that passes today that will be a second and final reading before the board on march 1st that will place the measure officially on the june 2022 ballot. this is a $400 million renewal of our general obligation bond to support transportation capital investments across san francisco and make sure that we

are competitive with the local match in order to be able to receive federal infrastructure dollars. next topic, we are finally ready with a mobile sales van which will launch on february 26th in the bayview. we have struggled with the clipper card in order to make sure clipper card and other muni fare programs are accessible to all san franciscans including san franciscans who live in neighborhoods far from the downtown. this mobile van, which was outfitted by our own crew including folks in the central shop, vehicle maintenance shop, woods division body shop, electronic revenue service team and the creative services team, all worked together to have a full service shop in this old

paratransit van which will be traveling around san francisco neighborhood to make sure people can get their regular muni passes and qualify for all of our discount programs. on to the next topic. you may have heard from our previous presentations that we are experiencing a delay as a result of global supply chain issues and being able to take care of the new science and new technology for dealing with at&t's shut down of their 3g network this year. the 3g network will end service on february 22nd. we had originally planned to have a perfect with the replacement of all of our wayfinding equipment in our bus shelters. because it is 2021 and 2022, the materials were not available on

time. we're rearranging our existing service to make sure we have realtime prediction at locations where we have the most riders and in particularly riders who have the least likely hood of being able to have their own technology be able to provide them with predictions. we are installing 4g kits to upgrade existing system to the extent that those kits are available. we'll be posting signs at almost all of our stops with qr codes in order for people to download the correct information on to their phones. we are working hard in order to make sure that we get the expected equipment in order to upgrade our wayfinding systems on time.

finally, couple of other quick additions, we have scheduled the ribbon cutting for the van ness bus transit corridor which will open for service on friday apri. this is after many years unsnarling 110 years worth of tangled utilities underneath van ness avenue. we appreciate the tireless patience of businesses and business owners and residents along the corridor. we are finally going to get service moving so it will be a ceremony on april 1st at 11:00 r memorial. we have a separate event on march 31st to celebrate the public art lights culture. we also broke ground on last monday, february 8th, for the segment b of our l replacement

work. we have dug up and replaced the utilities and rebuilt the roadway and railline on west of sunset boulevard, learning the lessons from van ness that project was on time and on budget been we're now continue the work between sunset boulevard and west portal. that work is under way. also, i wanted to highlight very happy that bart, the owner of our subway station has reopened the public restrooms in -- first at powell station and other downtown stations. we want to let you all know, got some good national press, our very own, taxi and mobility team staffer has been appointed by

president biden to the united states access board. we are incredibly proud of mattie and this honor she received from the federal government. finally, i will close with reminder to all of you and to all of the public, if you do have a smartphone, please download the sf311 app. this app allows you to take a picture of any problem that might see out there in the field. you can upload it and report anything that needs to be fixed out there in the field. you can also file complaints and very importantly, file commendations for any of our staffers that have done a good job. most of the feedback we get at the sfmta are in the form of complaints. let me tell you, when our staffers get compliments, this is game-changing for them. they remember any compliment they receive for the rest their careers. i highly encourage you to let us

know if someone has gone above the call of duty. finally, another reminder, which is to sign up for sfmta service alerts. if you google sfmta service alert, you can sign up for texts or e-mail alerts for any individual transit line for any of our dozens of projects for alerts for any geographic neighborhood so you can know what is going on as we continue to face significant changes and omicron curve balls. we can get you the best and most up to date information. thank you so much. >> chair borden: thank you for that. we have many questions. first is from director hinze. >> director hinze: thank you director tumlin for your

comprehensive report. my question is on staffing and connected to that is on vaccinations. i know we're very proud that our staff is 100% vaccinated. that's obviously something that's preventing this being worse than it is. i wanted to ask and clarify is fully vaccinated, does that include the booster? i read somewhere that it does. i know it does for us. >> director tumlin: currently, only emergency services and emergency critical divisions and city government are required to get the booster shot. we highly encourage all our staff to get the booster shot. we define fully vaccinated your first and second pfizer, j&j

vaccines. >> director hinze: do we have an idea of how many of our -- what percentage of our staff is boosted? >> director tumlin: i don't have that offhand. i can get that information for you. >> director hinze: perfect. i was interested in sort of deployments of the mobile van and where was it might be going. i know you said it's starting in the bayview. i'm wondering if they have a strategy. you said it was mostly equity neighborhoods. >> director tumlin: we'll be updating the mobile van has its own website. we'll be updating the schedule of locations as that becomes available. right now, we're still actually looking for places that would

love to host our mobile van. obviously we are prioritizing our equity neighborhoods those are places where people are least likely to have a smartphone. for many of our services, they are available on muni mobile. for example, to get a clipper card in san francisco, generally requires going to one of our rail stations. for communities that are far from our rail stations, it can be hard to get a clipper card to get started. it also for services that require validation and for people that don't have access to online services, for example, demonstrating eligibility for our lifeline program. that is something that we want to make sure we can take out to people and focus on people who don't have access to a computer.

>> director hinze: along the lines of people who don't have a phone of any sort, on the topic of 3g decommissioning, is there a way for folks who don't have phones -- say they're at a muni stop to access the features? i'm assuming not. >> director tumlin: with a simple phone but not a smartphone. you can call 311 and use the automated service in order to get updated predictions. unfortunately, for people who don't have any kind of phone, there is not much they can do aside from the fact that we are -- we will have couple hundred realtime prediction services that do work and as usual, we're prioritizing the location of

those screens in our equity neighborhoods are people are least likely to have a cell phone. >> director hinze: thank you. >> director heminger: it does strike me that opening van messes on april fool's day is like putting on a sign. is there any reason we can't do it on april 2nd? >> director tumlin: we are hopeful to actually get some important public officials to a ribbon cutting. that was the date that was available. >> director heminger: i guess you better embrace it then, make sure you got lot of april fool's jokes printed out. thank you.

[ laughter ] >> chair borden: director lai? >> director lai: i can't say i disagree with director with director heminger on april 1st. the current level of service was essentially 50% to 55% based on our 20% or 25% service. >> director tumlin: it will be a percentage of a percentage. not added. >> director lai: okay. i think i heard you say that this reduced service will be

sustained until our graduating class comes online in march and then in june. is that correct? >> director tumlin: not necessarily. we are expecting -- the omicron surge has crested. we are expecting to be getting people back to work soon. it is lagging as people remain in quarantine for long after the surge has passed. there's a chance that we may have a return to work pace that accelerates at the same rate that loss of our employees accelerated at the beginning of the curve. that is hard to predict. we want to make sure that we actually have the right number of staff in order to be able to deliver on our promise to service. our first task is to restabilize our previously promised service so that we're able to actually

deliver on our promise to serve. >> director lai: i'm going to may be try to restate this. i'm trying to understand approximately at what level we are providing? if i had done the math correctly, 25% is like 56%. i think you're saying that we will be able to bring back our 75% service by march and what would be our percentage of service before june graduating class? that's what kind of want to know. we were supposed to be bringing back 85% in march. what are we now going to be at in march? >> director tumlin: the director of transit should be able to do that math better than i can do it in my math. >> i think on the exact percentage that will be out and

we implement the next schedule, mid-april, we should follow-up with director lai in a memo. i want to build on what jeff was saying. we have two issues, we are seeing acute, hopefully very short-term spike in sick leave which we hope will improve very quickly and get us back to the 75% so that we can deliver stable reliable service. we are also going to be graduating classes every month between now and june which will give us confidence to be able to add back routes like the 21 haze and 6 van ness at that time.

if this is the new normal and sick does not come down. we will come back to the board and have a different conversation. the short-term increase in sick is like the equivalent of eight months of training. we're seeing two patterns that are impacting us in the same direction. slower training and we would have liked which we're confident will be back on track with the imagine and april classes. all of our data points are telling us in short-term. we have to see it play out. >> director lai: thank you. appreciate that. certainly an evolving scenario, especially with some of the available sick days which has been influencing some of our staffing levels.

if i remember correctly, the last update we received on the hiring side, we are trying to target over hiring or at least filling our training programs. that we're hoping would help alleviate some of our staffing shortages on the operations side. quick question on disability aspects. director tumlin thank you for working with your staff and providing more visibility in chinatown and long lines that are level used by the a.p.i. community this past month still going on. i do know that the community really appreciates being -- just

wanting to say, thank you but also i think emphasizing that the continued anxiety on violence with the a.p.i. community is real. we want more clarity how we'll adjust their safety concerns. i know this topic up during the budget workshop. not to take us too far away from the your report, since you mentioned supporting the february festivities with the lunar new year. can you provide us what we have provided in terms of addressing safety and security around the lunar new year. >> director tumlin: the resource that we have available are transit fare inspectors.

we have those staffers who are uniformed and trained in deescalation techniques as well as community service. we have redirected those resources towards not joust chinatown but also the lines that disproportionately serve chinese americans and other asian-americans in san francisco. lines like the bay shore. we're also continuing to partner with the san francisco police department. we stay in close contact with them and one of the ways in which we stay in close contact with them is the extraordinary video need that we have on all our vehicles. when we get crime reported on muni, we immediately download that video and that video is able to provide a very, very

high conviction rate. we can positively identify perpetrators of any kind of crime. another thing that we have been doing in our vehicles is partnering with community-based organizations on delivering messages around how to be an effective bystander and one of the things we ask all bystanders to do is to report. it is with data that we can understand where director of resources that data can also be used by the police department and the courts in order to apprehend people who commit acts of violence or other crimes child on transit. >> director lai: that's quick question on the travel van. that's such a cool and great idea. is there a schedule posted on the website? >> director tumlin: not yet.

we're in the process of finalizing draft locations. we're eager to hear from all of you and especially from community about where the van will be most needed. the van is going to be most effective if we can partner with community based organizations who can promote that it's there and help bring people out so that we can deliver services directly to our customers. >> director lai: please live feed their location when they're out and about. >> director tumlin: we will. if you have detailed questions, our revenue program manager is available. we can also connect with you with diana hammond if you have ideas about different locations. >> director lai: thank you. >> chair borden: thank you. director eaken is next. >> vice chair eaken: thank you. i wanted to pick up on director

lai's questions around the transit ambassadors program. i really love this idea. we received the board a letter this cycle asking about more security on our vehicles. i think the ambassador's program is a wonderful model. i wondering if you can help us understand roughly for the size of a team, how many of our lines we have the capacity to serve, what these of ambassadors. there's something going on that's creating discomfort for passengers and the operator cannot deal with it. they are busy doing their job which is operating the vehicle safely. may be you can help us understand, is our vision to have 100% coverage on our lines for these ambassadors and also what's involved in training them and really as bystanders, what can we do, what other volunteer

opportunities? there's so many people -- you can feel on the vehicle, everybody wants this to be a safe enjoyable ride. they are like some small element going on that's creating discomfort for many people. may be just little background and we can take this up at a future briefing too. >> director tumlin: tom and julie, dilled you want -- did you want to speak? >> this is tom mcguire. you asked about the number of people deployed in the different ambassador roles. starting the first week of february, we have between 6 and 10 teams each of which has three staff members on it. it is a mix of our fare inspectors and transit ambassadors. they are working between 7:00 a.m. and 9:00 p.m. we do vary the hours little bit.

they are covering two things. they are covering the lines that director tumlin mentions, particularly the one in california as well as other lines. they are working at some base locations. majority are on stockton street. they are anywhere from 18 to 30 people working during those 11 or 12 hour windows every day. >> our vision as we build out, hopefully in this upcoming budget, customer experience program, we could build on and essentially double transit ambassador pool with the additional folks reporting to the customer information officer with the really deep in how to

take customer feedback. and to points. this. they would have the guardian deescalation training that current folks are getting. they would build on our ability to be in more places more often. >> chair borden: we are starting to get into detail that's not agendized today. if we want to have a report back later, that would be great. thank you. >> vice chair eaken: thank you. that's all for me. >> chair borden: great. director hinze, did you put your hand up a second time? you good? with that, we'll open up to public comment. this is an opportunity for members of the public to comment

on the director's report and the corresponding questions or comments made by directors after. >> director hinze: i did see director yekutiel have a question. >> director yekutiel: my question was asked. thank you. >> chair borden: if you like to speak please press 10. >> caller: hello. my name is michael. i'm calling regarding the customer information system project that was listed as part of the agenda for the director's report. i don't know that i heard any comment about it. this was an $88 million project that was awarded to sfmta in

june 2020. at the time, when m.t.a. made the proposal, they were projecting that the project would be completed and launched by end of 2021. this didn't happen. they are currently projecting end of 2022 if there are no further delays. i have two questions and one request, what was the reason or reasons for this delay? the second question is has the m.t.a. board in monitoring this project all along. i looked at the agendas for board meetings since june 2020, i didn't see this listed as status update from m.t.a.

may be there's been some monitoring behind the scenes. my request is i hope that the current information system, the one that is run by u.m.o., will remain in service with at least the current level of reliability and accuracy until the next gen customer information system is fully rolled out and tested. i would love to have some assurance of that from the board. thank you very much. that's it. >> chair borden: thank you. are there any other additional callers? >> caller: this is david pilpel. sorry, i joined late. i had issues here. i will communicate any issues with the minutes to board

secretary. on staffing as you've discussed, staffing needs to be a huge challenge for the agency and other city departments and around the world. i would strongly encourage the use of retired muni or m.t.a. employees through proposition f that was passed by the voters some years ago. i believe there may be some limitations or restrictions on the number of employees that can be used in that way. there may be some m.o.u.s. i would strongly encourage those provisions to be considered and perhaps even before that, if you can negotiate a side letter on some of those, so that you're

able to bring folks back who may have retired and willing to work full time or part time up to the 960 hours limit. at this point, anybody with a driver's license that's qualified to drive would help the system. i don't think whatever amount of r.d.o. or overtime work that's offered that people are taking that up because people are scared and not willing to work more than required and have all kinds of constraints whether it's child care or coming down with the thing or having a family member or quarantine. all kinds of issues. finally on next bus, the existing next bus feature on the phone used to have a map feature where you could show other vehicles on the line and some

months or may be couple of years ago that feature stopped work. that feature on the existing next muni app that could be great and helpful as the replacement customer information system is progressing. thank you for listening. >> chair borden: thank you mr. pilpel. next speaker please. >> caller: thank you again. good to be back with you. i'm calling from the 702. lots of good things. i'm looking forward to getting the van ness routes open back up and being able to enjoy that better what i see a better service.

no more blockages. i used the van ness service quite a bit in my day. the mobile van, i'm looking forward to that. i wish we done that sooner. we should use that a lot. we want to spread the message of muni to the masses and make it easier for people to get their fares. i want to use that not as a platform to take money -- and to be ambassadors to help people to be em-- empowered with the program. teach a person to fish and you feed them for life. i think that's the way it went. as far as staffing and service, that's very important. i think we have to look very hard as to those who are coming up positive for covid.

what their vaccination status is. we have to find out how are people getting covid? are people wearing their masks as they should be doing? i wear masks all the time and definitely on buses and trains. we have to dig done to find out why people are getting covid and whether it's happening on the job or not, thank you. [ please stand by ]

>> thank you any additional comments ? >> no thank you for your comments. moderator, or their additional calls on the line ?>> you have 2 questions remaining. >> next speaker please. >> i'm calling to talk about the recommendation that no

action be taken at 46 and lincoln. i want to stronglydisagree with that . this road is dangerous. we had somebody by their on a road protest there and it was quick and effective. the road capacity is more than needed already. traffic goesfast. the least you can do is put a crosswalk at a stop sign their . we've had too many traffic deaths already and i can't believe the mta is making a recommendation after people died. you need to takeaction every time something like this happens, thank you . >> thank you, next speaker please. >> you have one question remaining . >> you are now unmuted. >> caller: i'd like to bring to your attention that over 200 businesses shut down on the line impacting thousandsof

people . this is comical, really comical that you want to cut that agreement on april fools' day while paying no attention that even though you're supposed to do good work, you did lousy work and then youwant to make a mockery of it . i'll address it on my blog. it's been over two years since we've had the pandemic and i want to bring to your attention that i see many seniors that have to walk up the hill three or four blocks. this is wrong this is simply wrong . so i suggest that some seniors

accompany those who have made these bus stops or those who have a stake in having this bus stop put in a place to walk with them. the hill three blocksand see how the seniors fair . your board, i know some of you all have to haveempathy . this is, the city was named after st. francis of assissi who hadempathy . >> are thereadditional colors on the line ? >> you have one question remaining. >> next speaker. >> caller: my name is alice and i live in the outer sunset in district for. i was offended to hear there's no recommended response to the fatal collision that happened at 36 and lincoln.

lincoln is a fast, dangerous road that prevents easy access for most of the block and i would love to see a stop line and additionally a road sign as my comrade earlier in the call. >> does that conclude your comments? >> yes. >> thank you forcalling in. additional calls online ? >> you have zero questions remaining. >> we will closepublic comment. director , are there other things you wanted to clarify about the 46 or anything else that was questions? >> not unless the board once to weigh forth on these topics. >> with that we will close this item and move on to our next one. >> item 8, citizens advisory

board. >> welcome mister jan. >> michael chen, citizens advisory council chair and to give you the report for the february meeting we reviewed the budget and a very compressed time a summary of what the board saw in the budget workshop had a lot of questions . no resolutions to the board at this time. we plan to address the budget before the board does an approval in april. and that is the end of my report. >> thank you, where there any specific topics they are most interested relatedto the budget ? >> there was some discussion around let's see. interest around where to find revenue, parking meters.

especiallyaround costs . arcing meter rates. understanding institutional passes and possibly more revenue around there. let's see, and there's some discussion about fair increases that were proposed in the budget and also interest around some of the outreach that should be happening i believe this month around budget priorities going tothe community . >> grace, well thank you for your service. directors, any questions for mister chen ? >> seeing on i will open it up to public comment. that is the opportunity for members of thepublic to comment on the advisory report, that is item 8 on our agenda . if you'dlike to be put in the queue press 1, zero. any colors on the line ? >> you have zero questions

remaining. >> with that we will close public comment and thank you for being here. we are eager to hear about some ofthe priority areas . we see they brought an even larger representation of the city and we would be eager to hear their sentiments on i dida trade-off and decisions we need to make . >> thank you. >> with that we will move on to our nextitem . >> item 9, public comment. >> this is the opportunity for members of the public to begin their comments on items not on today's agenda . but are in the subject matter jurisdiction of sf mta. if you have a comment on the matter on the agenda all in during thecorresponding item . otherwise , now is your turn to speak. please press 1, zero to put yourself in thequeue . are there colors on the line ? >> you have zero questions remaining. >> with that we will close

publiccomment on to our next item . >> item number 10, consent calendar. these items considered to be routine and will bevoted on by a single vote unless a member of the board or public wishes to consider an item separately . if you wish to address the board press item 1, zero and identify whichi am you are speaking to . item 10.1, requesting the controller to allot funds and draw warns against such funds available or will be available in claims against the sf mta, increasing superior court number cg 2158, 9652 filed february 5, 2021 for $88,500. i am, stephen ramirez with a number cg c215948 filed on february 26, 2021 four $1000. item 10.2, approving various routine parking and traffic

modifications as listed in the agenda items a through z. item 10.3, authorizing the director to establish a special event transient parking rate retroactive to february 5, 2022 for 24 days not to exceed two hours with a floor of zero dollars per hour at the portman square garage funded by other city departments. 10.4, adopting findings under the state emergency services asked to allow remote meetings during the covid emergency, continuing meetings and directing the secretary to agendaitems within 30days . that includes the consent calendar . >> ic director hinze has a comment. >>. [inaudible] since covid covid is on 10.2, it's always pleasant to see our bike stop

removal. i know staff has spoken about the aspirational policies to remove all flaxsouth . we talked about it recently but at some point i think it would good to maybe have a hearing or somehow your back now as to where we are other than where we are on plans moving forward on that. i know we have the support of the board of supervisors which is always a good thing. so a follow up on that would be appreciated at future meetings. >> erector lai. >> thank you chair, a quick question. do we need the number of days for the remote meeting findings

given that we are returning on march 10 i think? this is just an outside, all-inclusive extension. >> yes, and i did put a in the resolution that added a line to whatever the direction is from the mayor's officeand the administrator . >> thank you. >> president: ic director eake . >> i also wanted to comment on 10.2 and just want staff on addressing the issues raised and director hinze's request for a little more discussion on this topic. >> president: any additional comments on our consent calendar at this time? seeingnon-we will open itup for public comment . any of the items under section

10 with thesome points on our agenda . if you'd like to speak press 1, zero . are there colors on the line ? >> you havetwo questions remaining . >> president: firstspeaker . >> sorry i didn't get internet. i live indistrict 6 and i'd like to ask item 10.3 be severed . i appreciate that sfmta is looking to support our small businesses but i hope we're back. a few months after we did this in medians where again giving away free parking while he asked some of our most transit dependent writers on lines like the 30 and the one whoare facing or transit service to pay full fare . so the staff report seems to amount to a justification for free parking anywhere in the city . it takes us in the opposite direction from all our transportationpolicy etc. and obviously the process here when you do things like transit lanes or biplanes , they only

happen after an endless chain of surveys, public meetings and routinely canceledand watered down when people object. but the stakeholders engaged here only includes thechamber of commerce and city staff . you constantly second-guess yourself asking if it's okay to follow the first policy . yet explicitly seeking to write more car traffic to a neighborhood that none of the stakeholders consulted even included asking residents whether they want more cars in the neighborhood . director tomlin likes to pose rhetorical questions about whether or not the city will hold up to its values . i appreciate that but all too often our values die quietly in the consent calendar or when projects disappear without explanation so i hope that if we're going to do things we seek to increase vehicle miles traveled that we can at least the explicit about thatand acknowledged what we're doing iswithout even providing an equivalent discount for muni writers >> thank you, next speaker .

and now moderator, arethere additional colors on the line ? >> you have one question remaining . >> you are nowon unit . >> canyou? >> yes i can . >> i had an item for general public comment, item 9. you went through that very quickly and i couldn't get to the phone fast enough. can i make every comment on general public comment first and one consent? thank you. item 9 general public comment. there was an item at the board of supervisors finance committee meeting last week, a relatively routine item on state-funded transportation projects authorizing amaster agreement . and i commented on exercise of delegated authority from this board to the mca. director, there was a resolution from 2006 that authorized that exercise of authority . i'm not in general crazy about

delegating authority to staff, but to the extent that that exists and i respect that and understand that in the absence of that delegated authority that there would be a number of grants resolutions that would come before you and that would bogdown the calendar even further. i understand that . i just think there should be some sort of public reporting and not just a memo to you that's buried in a folder that i could leave through and nobody else would find orsee or care about .but where i'm going with this is i think there should be some kind of public record perhaps quarterly on with a chart showing the exercise of delegated authority by the director of transportation whether it's for a grant agreement or a contract modification or whatever other actions are authorized through

exercise of that delegated authority. that would be useful for the public to see what's going on. i would also be interested in that but i did have some discussion about that with joel goldberg after the meeting and he was going to be what he could do on that but i wanted to raise that for your consideration. that's on item 9. can i move on to the consent calendar? >> very quickly, you're running out of time. >> on the consent calendar on 10.4, i don't think you need to pull it but let me make my comments on 10.4. no objection to making the findings, i would notice the brown act and not the state emergency services act. i would make reference to the 45th supplement which came out last thursday and the letter from chief of staff sean

ellsbury. i believe going back to in person and hybrid meetings it's going to create all kinds of confusion and complications in terms of technology and vaccination andall kinds of things . good luck withall that behind-the-scenes .i would encourage you to encourage amending the resolution rather than 30 days limited to 19 days which would bring you to march 7 because right now as it reads it says for the next 30 days meetings of the board will occur exclusively by teleconference. that runs in conflict with the mayor's directive which requires meetings including the mta board starting on march 7 the next meeting on march 15 is only 28 days from now and not 30. so i just think as a matter of law and practice, it may be despite the language in there

about the city administrator that i would encourage you to consider amending 30 days down to 19. and if all those things change, then a new resolution at your next meeting on the first or the 15th would absolutely be in order. those are my thoughts, thank you. >> president: thank you. >> you have zero questions remaining. >> with that we will close public comment. any additional comments before we move on to a motion on the consent calendar? director hinze you are muted, director hinze. >> i did put my hand down. >> president: with that ... >> i'd love to move the item, chair boarded. >> is there asecond ?

all in favor of secretary, call the role. >> on the motion to approve the consent calendar, director hinze. [roll call vote] >> the consent calendar is approved, thank you. >> president: next we are on our regular agenda. >> item 11, update on the building progress program authorizing the director of transportation to execute the agreement for the retail yard development project with a term not exceeding 568 days and potential termination payment will not exceed $9.99 million and approved by the board of supervisors a continuation payment of $4 million .

>> president: you're taking us through? >> thank you chair borden, acting chief financial officer and progress program manager which is my normal job. today i know the board has been asking for several months on an update on our facilities program and kind of elements of development so i'm going to cover that todayand talk about one of the specific projects , the potrero yard. quick update asmany of you are new . the building progress program in 2017, the goal of the program was to modernize our aging facilities across san francisco . improve the resiliency of all our facilities soresiliency to climate change, technology changes across the city . then finally because this is a little bit different than our normal transportation project it's a fixed site, making the

mta abetter neighbor with regard to the design of our buildings and urban design of the neighborhood in which they are . or programs within the building progress program overall include our modernization program whichincludes the reconstruction of many of our full operating transit yards across san francisco . i'm not going to gointo specific projects . the electrification program in which we are completing our final report, a brief on that today with regard to the transition of our physical plans to be prepared to move towards battery electric bus. the cable car barn program in which we're looking at a renovation of the major infrastructurewithin the cable car barn and the barn itself . our joint development program her we have joint development either as part of our yard modernizationprogram looking at development opportunities at our garages and some of our parking facilities across and francisco .

regular capital program and facility condition assessment program managed by our building maintenance team that are implementing repairs across all our facilities . improving those pieces of our workforce. just some recentprojects to be aware of. we did at about $50 million project completely reconstruct our warehouse . this is where we don't a brand-new overhead maintenance line facility for our maintenance there. this facility is a fully resilient in case of an earthquake it canoperations are important, the prior facility was not . we also the plans of the building so you'll see the storage rack, this is our major storage and logistical facility for all our major parks and suppliesacross all our facilities . the bancroft project is where our operations staff and street division work. a lot of ourshops . we renovated that building where the staff there, created anew space, updated the roof . added a welding shop and then

we opened phase 2 of the creek maintenance yard which was the first major yard space added in probably more than a decade, probably around 20 years but fully opened that with the phase for our growing transit agency. in 2016 to prepare for this we get a full physical walk-through condition assessment of all our facilities. that report showed that we had about $60 million in backlog repairs so we had about 60 acres across san francisco, 1.6 million and the building space and in the future we managed the program year-over-year we know we replaced hvac needed to berepaired and an ongoing program of $143 in repairs across our location . you'll see examples so major campaigns we havebeen working on the past couple of years are

improving the spaces for sfp enforcement , parking enforcement team by seventh street. we did $1 million of improvement in thatlocation and until their headquarters is completed . we've been doing a campaign of reconstructing rooms across our major yard as an example of that . a lot of our systems do not function so you will see an example of the major work we did at the grignard placing the heating system location and then we continue to do that across our locations in san francisco. the modernization program is a larger program, it's a $2 billion capital program and it was originally designed to provide the space needed for the growth of the league so we know san francisco was growing. we transit service needed to increase the physical plans for our fleet needed to grow. that resulted in the assessment and development of project scope. that is the modern nation part of that.

as we moved to electrify the fleet we integrated the schedule and technology to electrify the fleet at the same time so the potrero yard will have storage for our electric fleet.we also are working to advance kirkland and change that a little bit later on how to do that and where we can, have to help finance the capital improvement costs to update these facilities. as i said before and as part of the geo bond and other programs it is hardest for us tofund the renovation of our facilities across san francisco . it's one of our biggest gaps with regards to repair the we have to look at innovative ways to fund some of these projects and that would be potrero. the program itself was designed around lessons learned from prior projects and programs so project sequencing, how we do that is coordination with other city departments. we have a multi-department for

you and for the management taking financial management. we do cost estimating so we have a professional cost estimator at the department of works that does regularlyupdate our cost estimates . outreach and engagement so i think work we've done around the presidio yard and overall program andthe potrero yard has been outstanding and the team has an amazing work there . visual management, you have a master schedule so we're going to annual data on that now. different types ofproject delivery, managing projects and constantly managing risk . for the potrero yard project we have a workshop where we consider all the risks with different modelsthat we reviewed . just an example of the outreach plan,we concluded in 2018 we continue to do regular schedule updates . we do have a multi-departmental

fw through 2025 with the planning department, office of economic workforce development and housing department of public works which funds staff locations that are part of our integrated team. we also have technical work and this was one of the lessons learned . we deliberately hire people in advance to keep parallel tasks on schedule so wf before electrification, fwc a4 environmental. just to give you an update on the specific projects, muni metro east is at 100 percent design so we're waiting on the master developer and then hopefully we will be moving forward with getting a project for construction . potrero we are atdeveloper selection so we will learn about that today . presidio yard we completed our planning site programming .

one of the lessons learned something that we took from the fleet program was to develop specific performance specifications for the operations each of our yard facilities and taking those performance specifications and working with architects and urban designers on specific design andtechnology and then kirkland you'll see that arrow there . we are recommending that we're going to be shifting the sequence and actually working on parkland first almost immediately to modernize that facility to be our first full electricfacility for work .so you'll see maybe metro here to remind the board ask for acres on the eastern portion of our metro east rail yard. josie over by the design here some of the new trolley facilities.it will include an operations building which is something we do and i'd liketo thank our capital program construction division .

one area of innovation is that we worked on designs that can be used in any location. for six vehicles or motor coaches, this will standardize the design and make it easier for us to upgrade feasibility in thefuture and also allow them to be flexible in the type of fleet that we have any particular location . here's just alot of work done this year at the review completed 95 percent almost at 100 percent now . we've got that for a building permit so this project isready to go and we hope to bring the construction elements of this project to the board in april or may . >> sospecifically on the potrero yard modernization , where asking the board if the full team is here to review and approve to form the free development agreement of the project which is part of the predevelopment space . so just to remind you of the yard is more than 100. serves nearly 400 mta and has

16 bus dayssensors 130 vehicles . the line that run out the potrero yard prior to the pandemic but like we said, some of our largest like 14 mission come out of that yard. there's about 102 muni writers per day. we will be making this a facility that willsupport 213 buses when it's completed . i am a modern use 17 maintenance days and it will certainly hundred 29 employees, 380 of those being aggregators. part of the reason is we're making this location for trains. >> just for transportation objectives we want to provide infrastructure for buses. absolutelyimproving that for our workforce. consolidating functions so our

operations and training operations will look to this location once it's completed . the joint development has a general goal that we want to absolutely improve the neighborhood. they're in the mission and potrero hill and in thearcuate rfp that our baseline affordable housing is part of the joint department at 50 percent affordable . we'd absolutely make commitments in our post man to make a responsible investment betweenparents and can absolutely be a leader in sustainability of that building . wewill see some of the artist renderings of the potential project .significant amount of work done by the team. i would liketo thank the city who really led and was our project director on this . she did a fantastic job. a geo bond project manager but she allowed her work and our public works project manager today they got us to where we are today and did an outstanding work to get that moving . we have our vir completed. our ministry draft done and reviewed and gone through the process so the next step is for

us to move forward with the redevelopment agreement, the predevelopment face before moving on to the final project. five major public events we give tours of the facility. again our outreach team led by bonnie crow is absolutely amazing. we set up a neighborhood working group for this project that meets regularly from fall 2018. i presented that two weeks ago on monday. we continue to do virtual meetings around the qr process. we've been meeting with local business enterprises and breaking them and we continue to do tables and we continue to do yard work in 2010. so just with a quick milestone really big things happened this yearrrsp was released . i would like to thank the board for its support of special legislation for this particular project . so the mta board supported that

last spring, board of supervisors adopted special legislation for the potrero project in april. we went look forward to the planning commission tracking environmental impact reports . historic preservation commission , the comment period closed. we did an update on this process with the board committee november 23 and then on december 30 we drafted three proposals from our shortlisted lead development team. the next steps today we are again asking you to execute predevelopment agreements so essentially setting the term for the predevelopment phase . it's in spring we will complete the review of the rfps and collect that preferred proposal to be lead developer. we hope to moving forward next year the latest but in the summer, look forward with the expansion of the metro east and then by 2024 we would like to

start construction of the potrero yard. here's just some action the mt board has taken a lot of history on this project and i would like to thank the board for its support and the public . this has been very complex project what we'vedone good work today so at associates f wta, project application , getting together. to support both the mta board of board of supervisors on the use of this development procurement method for the project rfq and rfp out. the support of the board of supervisors and our legislation. just to quickly cover kind of the nature of the deal and the project itself how the public-private partnerships work .is there is a component which the mta is responsible for, housing and commercial components, the developers responsible for and

there is common infrastructure as part of the project both housing component and /air component. thelead developer would finance the new facility and operate a housing component and maintain the common infrastructure components of the project . there's a finance tomaintain component which is critical because we do not have the financial resources to pay for all the capital improvements upfront and we will make an upfrontcapital contribution . this risk transfer is transferred to the developer as part of this so i'm sure we will get into some of this discussion about that today with the team . then again, schedule management has been critical to this project as always as a person on the team's mind so that is in the process overall. so the rfp process was a three-way technical design and intensive commercial negotiation to settle the terms of the free development agreement so if you want to make clear that the teams that were shortlisted as part of the rfp process that there was extensive discussion with each

of those teams on the elements of this settlement agreement again, it is important we lockdown the terms and that we moved to immediately execute the agreement on completion of thereview of the rfp. again, the pda phase , once the agreement is executed it includes public outreach the management and delivery plans for the project, housing development approach schedules to the facility so that would be considered due diligence and design for the bus yard accounting component commercial and financial structuring we will go forward to the board of supervisors with the final dar and special useddistrict and entitlement . and then there will be a design don't relating to contractor procurement editors first during this phase and we will be through the final project agreement . so two elements that came out of that discussion and that process between the rfq and final proposals.

we received at the end of the december include the integration of the termination agreement, there was lots of discussion about that. we have made the determination agreement the maximum amounts we are allowed under the legislation ofthe board of supervisors . i'm not going to go into the amount, it's just under $2 million . a continuation payment was something brought up during this process . as noted, the leaddeveloper when they are selected will have a huge financial stake in the project . it will be funding a lot of the cash related to this project so based on pacific milestones we haven't we have included its determination payment is not executed, a paymentcontinuation , kind of a milestone payment of $4 million during the course of this project . that is it. i tried to be clear and i've tried to be fast. the entire team is with me here sothat includes our city attorney , ourcounsel , project managers.

anybody want to talk to you about the project is here to answer any questions we have a nice lineup of people asking questions and we will start with director heminger. >> i do want to apologize to my colleagues at the outset because i have a bit to say about this item but perhaps others do as well. it's a pretty big deal. and at the end of my issues and questions, i would like to ask you to consider continuing this item for another 2 weeks for a subsequent meeting so we cando more due diligence on the project . first of all i want to commend staff for pursuing an innovative procurement proposal here. i think at various stages, with various projects we've been asking for them to try some different approaches to the traditional design build . and i guess what i could say is

sometimes you haveto watch what you asked for because i think instead ofwaiting into the pool , jonathan and his team have jumped right into the deep end . and i'm hoping he's a good swimmer. just to give you a sense in my judgment howsignificant approach this is , especially given where we are comingfrom , the procurement method itself is called a design build finance maintain model. and where usedto design build . which is straightforward and it's been going on in this country at least for 70 years or longer. thefirst two of those elements , design and build. when you put them together you got a design build project which is a form of public-privatepartnership , but it's probably the one that has

the least amount of difference between what we do conventionally with design, bid, build. this proposal before us goes well beyondthat . it includes a finance components which is really a way for the private sector to get some skin in the game but as ithink we all know the private sector doesn't give you money for free . they expect to be paid back plus profit. and then finally there's a maintenance component to this procurement which means that you're not just procuring somebody to build yourproject. your procuring somebody who's also going to stick around and maintain it for you according to certain standards .i can certainly understand why jonathan thinksthat's so important . in addition to that just sort of base level of complexity and risk , with procurementmethods

you've gotthe fact that this isn't just one yard . it's 2 yards . that the procured developer will not just be developing potrero will be expanding metro east to handle thepotrero trolleys during construction . and you just don't have 2 bus yards, you've got a housing component on top of it and housing of course is never controversial in san francisco . and it's not just an mta project,it's a partnership with dpw . we've had some recent experience with that on van ness and i think it's fair to say we've got some lessons to learnabout partnership their . and i think that's why as a result of all these complexities what you've got to attach to the calendar today is a 250 page three development agreement which is sort of like the appetizer.it's not even dinner.

and that tells you i think how significant this action would be. so maybe i could just ask a couple of questions and ask for some additional information i think i hope we will benefit from jonathan, why we start with the budget to start with. my understanding is that when you include the project, you include the metro east project and you throw in a housing project, you're in the territory of about $1 billion of budget, is that correct? >> that is correct. >> what would be helpful to me i think is to see that budget broken out by project and also the to highlight the contingencies that were included in the budgetestimate as well as escalation . and construction information. colleagues, i think you'll remember we discovered throughout our odyssey on the

central subway that they actuallystarted building the project with like a nine percent contingency . and that was laughablytoo low. so here'sour chance . to figure that out right . with another billion-dollar project. secondly jonathan, is there a pro forma on the transaction that we could see his enlightened human talk and not martian? >> let me ask and attempt to address that with our team from era. there are going to be elements within each of the proposers responses. we actually did work with hatch to do some original pro forma surround development options on the site with the objective to raise revenues. this is what we want to do, we want to pay for the capital

plus have a long-term funding source for the agency for transportation service . on this particular project because of the nature and because it's in the mission and because of the need of housing in the city, the agency made the decision this would be a net zeroproject . so we will pay for our infrastructure but we are providing our property for that housing component but do you want to add to that? we can share with you the report that was done on the project. which was the initial proforma that was done for this development . >> maybe it's too just to expand onthe question . as i understand it, and look. public partnerships often involve the creation of a revenue stream that can be used to pay back the project participants. in this case as i understand it jonathan, just leaving the house and aside because that's

where not exposed to that, is that correct? >> you want to take that one? or are we? >> project manager with public works, that is one of the objectives of themany project objectives . being so multidimensional there's upwards to 15 to 17 project objectives. one of which is to the extent feasible generate revenue to offset the capital cost to build the project. but to your original question, can you see pro forma. unfortunately you cannot see any of the proposed pro forma at this time. as it's the middle of the proposal process and i cannot disclose any of that information of course but as jonathan said they had studied the feasibility pro forma to demonstrate whether or not this was doable and it was from industry experts coming from hatch and to build on that, you can build on the type of things we would expect to see in the pro forma in relation to ...

>> maybe i could cut that short because i'd like to take a look at that work by hatch if that's something you canprovide . okay. getting back to the question of revenue stream here, my understanding is that this will be structured as our participation as making and availability payments to the developer over a period of time. is that right? >> correct. >> that's in the loop of there being a revenue stream that the developer couldcapture. he's going to go out and borrow money. let me give you my understanding and you can correct me if i'm wrong . >> he's going to go out and have money to build this thing. essentially paying his debt

service over time according to a fund source that i'm sure you will tell us you've already got. >> i will let him add details but yes, we will have this budget for the cost of the availability payments as part ofour normal operating . >> and do we have to the ballpark sense of how much that's going to be per year? >> yes. we do run regular estimates and when we were looking at the risk register we needed to consider the financial capability to makethose availability payments . it is not firm because we will make a capital contribution upright. the higher capital contribution we make up front will reduce what the long-term paymentswill be. did you want to add anything on the structure ? >> yes, hello.

i'm with the advisory team in san francisco and advising mta on the project. board member heminger, we did conduct both a financial analysis of the bus yards component which is that component that will be paid by the mta through the availability payments and eventually amilestone payment at completion of construction . so it's a combination of both milestone payments and availability payments that makesup that revenue stream that you were referring to . the mta would be, it would make to the developer to pay back the investment and to pay for the ongoing facility maintenance of essentially the shell of the facility . separately there would be separatefinancing which would

be that of the housing . that would be the normal type of housing financing that you would expect for a project of that type and nature in san francisco. those are two separate financings. the housing financing would be payback from the normal housing revenue you wouldexpect . financial pay , financing sources for affordable housing. >> but that's all sealed off fromthe mta . >> correct. those are two separate finances and that's why the procurement method has to allow for those financings to be harmonized if you will under a single procurement process. >> as a construction matter they are not separate because we're building housing so if the yard is late in delivery so is the housing. >> that's why we have what we call the lead developer is the

entity that leads the team that is delivering the project as a whole and that lead developer 's infrastructure developer so we purposefully select as required we're selecting the teams based on that lead entity being an infrastructure developer of the type that he has the expertise and expertise of delivery infrastructure including and then they have together in their that they bring all the expertise notonly for engineering, construction services and so on but also for housing development . so the lead developer will be the entity responsible for the integration of those two components. >> i get that. jonathan, back to you again. can you give us all ballpark estimateof what the available

payments might be ? >> i think again outside what the final contribution is it would be the end of construction i would estimate it in the $30-$35 million per year amount. >> that will have priority in our budget process because it's essentially a form of debt that we are going the developer. okay. then the upfront payment, the capital contribution. do you have again an estimateof what that might be ? >> i think i would guess again 180 to 200 million would be estimate on the upfront capital payment. >> and what's the cost of the potrero yard, with the estimate ? >> i would say in the480 . just where constantly updating cost estimates the last one has a component over 500 million.

>> is upwards of $800 per square. >> to put a metric on it in terms of the cost we're looking at in today's market. >> is the developer chipping in any of its own equity or is it just all get that we're going to help them pay back ? >> go ahead ignacio. >> typically in availability payment transaction of this nature party has a high credit rating such as the sfmta, the contribution would be in the order of 10 percent of thetotal project cost . the 10 percent would be equity and 90 percent react. >> that's heavily leveraged, right? >> that is because it is not exposed to market risk.

in the housing components where you have revenues that come from market rent and soon . typically the leverage is lowe . the equity, it's really lenders open up determines what those hearing ratios are.it depends on the risk profile of what the project is andprimarily the revenue source . and making availability payments by the mta which is a highly rated, the credit rating sfmta this is a highly rated agency. therefore the leverage can be higher than if it was a housing project. >> that does raise the question and it's sort of afundamental one . given the fact the mta is highly rated, it can borrow money at cheaper interest rate than the developer can. why are we using the developer

to basically take out a loan when we could sell that ourselves? you're committing a revenue stream of availability payments which could just as well be a debt service stream for mta that. >> that is a good question and evaluating ... i will say on public record i was originally against this way and i thought we should pay for it a normal capital projects. again, during our risk workshop we considered numerous methods to financethe project . one that we considered were debt limits so this becomes an operating payment that we make regularly versus the impact it has on us seeking debt in the private market so our own credit rating and also the debt limits the mtahas spent on itself. that's one element we consider . we are in discussions there

have been talks about adding to be a part of the financing which could get us a lower and for better rate. honestly when westarted this process , interest rates minus what might happen in the next quarter or year were athistoric close . so who knows whether or not the race we could have gotten versus anybody else would have beensubstantially different . i think you will all be part of the terms we discussed towards the final project agreement there are definitely things you are taking into consideration. as i said we've not made a final decision on the capital payment itself. to your point directorheminger we take on the revenue bonds within a certain window . thenagain it would increase the upfront payment . so we will talk about it over time. >> i think in addition to the

pro forma with whichever you provide us which is going to be a pretty vanilla assessment of whichway to go on this deal . i think it would be helpful just to geta sense of how we toggle back and forth between the availability payments and your capital contributions . and presumably they will be in somekind of relationship with each other and it would be good to see what that is . how high one could get and how low the other could get . turning now to the termination and continuation payments, i think you said the termination payment is as high as we are allowed to have under the authorizing legislation . is that right? >> do you want to take that one? >> yes, carol wong, deputy city attorney. the continuation payments are scaled depending on the pba

phase this gets toterminated. it can go up to the $9.9 million mentioned in the calendar item . that's also a charter requirement so it gets to the charter restrictions wehave their . >> this would be for a determination of convenience. >> it would be a determination for anything other than a lead developer in the fall. so if we get to the mta board or get to the board of supervisors with a formal agreement and the decision is no that's a terminating event and may qualify for the terminating payment . >> so is broader than convenience . >> but it is also a conclude. >> is required to be covering actual cost they've incurred or is it somethingthey're entitled to on top of . >> is based on the actual value of the work project we will be getting from them so we haven't offered for a dollar amount and their actual cost. >> but your i guess we have the

ability to keep that work product if we terminate. >> they decided to us. >> what otherdeveloper will rely on somebody else's work product to do anything . >> i think in terms of the work product they're actually doing here as i understand it is a50 percent consigned that we would hope to useas well as our due diligence . so due diligence of the project . it's approval with the planning commission. >> it strikes me that maybe a pretty dicey proposition. the next bit of due diligence jonathan i was hoping we could get. given the fact that not only the mta but as far as i understand it the city and county of san francisco has very little experience with this complex a public-private partnership sort about the gat

. i think it would be helpful for the board to have some comparables around the united states or elsewhere if you want to go abroad. to just sort of give us the sense of how others have done. on some of the key deal points. how they are structured the financing to the extent that some of them are old enough how the maintenance responsibilities are going. and so on. i think that would be helpful to us because we are sort of starting out here where other people have blazed the trail so it would be good to hear from them and their approach and see what we can learn. >> is not co didn't prepare a lot for that that for us. we can provide you both report on the procurement method of which there were numerous that we considered prior to making the decision this specific one.

ignacio had us because the staff had numerous meetings to talk with other entered and you will provide that information. >> on all of these due diligence items jonathan, do you have mercy on us as policymakers and i mean to the extent you're not dropping 300 page book on our desk it really would be helpful for you to synthesize for us what you think the key lessons learned are . i think the last one, the last couple of questions i wanted to ask pertains to the letter we received from one of the other shortlisted terms that the letter discloses has been dropped from the list. is that right? >> that's something director that again we're not at liberty to talk about since we're in the middle of the proposal

process . >> theysent us a letter saying it happens .>> why do we have to address the current legal situation and the status. i think it is she is probably thebest one to address the nature . >> the first question i have isn't the question, it's just repeating a question that this developer raised which is i believe we're doing something unusual in that we're you're asking the board to approve sort of a template of a project of a development agreement, a predevelopmentagreement before we select three developer . and typically that would go the other way around. so i was interested in your thinking about why you're doing itthis way and not that way . >> sure and i think jim and ignacio feel free to stepin. to be clear , in this method we

put out an rfq where we were clear about what was required in december about what it would take to qualify to be shortlisted for this particular budget. we then as part of the rfp process we are veryclear on the requirements . we have numerous meetings with each of the teams. to discuss what they would have regarding requirements including this redevelopment agreement. hours and hours of meetings. and we heard some of their concerns and expressed some of them and completed an agenda to the rfp prior to the deadline. and some things we didn't agree to. part of the reason we're asking the board to approvethis agreement , redevelopment agreement now is we feel it's that staff is important to

lockdown the termsthat we agreed to that process . and the final essentially sample pda that we had attached to the rfp so the developers know what they wereresponding to . we want to have a stable process and we do not want to reopennegotiations on the terms related to this agreement . city or town, you might want to inform the board about any, i'm going to call them non-substantial changes but their administrative changes that would occur essentially the terms of the agreement for thisphase are fixed once the mta board approves the agreement . >> idea is that we've actually the formal agreement is actually prettymuch the final form . there specific details that the project proposal that we will be adding. wewill be adding thename of the

proposer. we will be adding their financial proposal . we will be adding their technical proposal . these are all how they are telling us theywill be doing it. there kind of all , i know we give you lots of materials. there's also proposal commitments they're making as part of their proposed which are above and beyond the minimum required. we will be preparing an exhibit that lists all of them, we want to make it very clear that we'reexpecting them to offer this item . the authority that we're asking you to give his there's a very narrow limit to the type of changes that can be made. if you add in those missing factual items but nothing can bedone for you substantially increase mta's obligation . we're basically not changing the other items of the

agreement. >> but my doing it in this order and i understand that may have some event for us, you're also asking this board to sort of by a pig in a poke. we're buying a form of predevelopment agreement and the staff is going to go out and decide who that is, not this poor. right? >> selecting through the rfp process, they initiate an rfp for the exact standards of what has to be submitted and how they get selected so selecting through that process as you would do for any other rfp. >> typically the winner comes to theboard to get through . in this case it's going to be the three finalists for two or however many we've got. >> it would be the one that's being filled in. as part of thecalendar item they did let you know .

>> can i jump in there carol. one clarification that director which is that the agreement doesn't commit the mta to the final agreement for the design and maintaining of theproject . it's only for the predevelopment service and please correct me if i'm wrong but that final step will be separated action by you, by this board.for that final formal project interstate. >> and isn't that where the board of supervisors sort of rejects itself on discontinuation idea? >> they come into different situations. there's a continuationpayment you're talking about that that they reach a certain entitlement milestone were calling it where there would be an additional payment to them .

if we would like to havecan continue the board that would require the boards approval because obviously you're going the 9 million . the later kind that we through this whole predevelopment process we negotiate the project agreements of delivering the project . everybody agrees to and it goes to the sfmta board. that one will go to the board of supervisors because the cost obviously will go another $10 million over 10 years. >> we could reach a place where the supervisors are willing to go along and then mta has to pay a termination fee. >> but with many projects. >> iunderstand that . but this one staring us right in the face. okay, madam chair i do appreciate the time i see a lot of other hands. so i'll subside for now. >> i think there's a lot more

questions,director deacon is up next . >> just two questions today. one we have a maximum termination payment a minimum termination payment we're signing up for . >> it is higher than the original iknow that much of the land . >> the initial graduating scale of the possibletermination points . how they correspond to the three phases within the pda phase. that event with a progression of the technical and then advancement of all the rest of the terms that built into the project agreement so the initial one is at 4.99 million. graduates to 7.99 and then a total of9.99 as a maximum at

the final termination point. >> is the 4.99 type to a certain threshold of work for this ? >> exactly so that if they don't get to that milestone with those approved were products in place and it gets prorated back to the point that we have to determine based on the amount of work has been completed form the prior in this case zero to that point of termination in this case 4.99. >> and then my second question is just there was a little rendering i think in the staff report. i couldn't exactly tell four or five stories, i have no idea if it's accurate or just an illustrative rendering but it made me think about how we are maximizing thedevelopment potential of this site. i wanted to make sure we're doing that . >> i was going to say we did work closely with theplanning department . they essentially provided us based on design, we didn't want a massive project in the

mission. there's a process across the street so the planning department worked with us to create what would be considered a maximum envelope that was reasonable to integrated both to the rfq and rfp.so it was a partnership working between urban design team planning department. we also had a fee part of our february workshop which we did with the public in the mission. discussed how large a project the public was going to accept. we've worked on this very closely with the working group and with the public in the mission on that project. >>. >> this is the project of robust committee outreach that was deployedupwards of three

years ago now and getting in front of the community , having open workshops and just asking the question what works here. they saw the maximum billable envelope and that is what established the project description that was set forth in the application to start the whole process. even despite the fact we have yet to select a developer.the developer is charged with sitting in thatbillable envelope .>> i understand all that. just recognizing this is a relatively unique and rare opportunity and it's connecting the sfmta overall payment for transit service so i want to make sure we're pushing the envelope to check the developmentpotential as much as we are able . can you confirm that was done

or do we just bill to one of the approved code wecan build to . >>. >> in fact what we are anticipating will require a special use district to exceed the height limit that's zone for that site. we're trying to see what's available to be integrated and be respectful and improve and provide a value at the same timemaximizing the housing . >> i would say we maximize the development opportunity. it is a modern expanded bus facility with new training facilities for our operation. as a matter of policy though director, as director heminger

said wherejumping into the deep end of the pool . it'simportant we develop expertise to do this well . this is our first go at this but that future opportunities we want to take the approach you're talking about and look to maximize that revenue-generating opportunities on our properties . this cycle will be more difficult. we've got a park right next door. there is mixed-use all around the neighborhood so it gets a little bit different but we have other sites where there are more opportunitiesand we're looking to do exactly what you're talking about, maximizing revenue-generating opportunities . >> it's a bit of atough answer . butyou're basically telling me you're not necessarily maximizing the development

potential of the site . given it's such a substantial property and a unique opportunity . >> i think between as tim said what was acceptable to the neighborhood in which we are a neighbor, what was accessible to the planning department for good urban design and maximum amount of housing units wecould ask the mission which was a policy priority at the city level . at the cost that costs the mta zero to get a bus yard i think we maximize the opportunity withinthat framing . >> thank you madam care. >> it's always obligated when youtalk about development here . director yekutiel. >> i think director yekutiel was performing. >> the hand is showing the order that people raisethem . >> i know a lot of questions have been asked. i do have a fair amount of

questions and i'll try to make them short. you said jonathan that it's costing us zero but in response to steve's question you mentioned something like $30-$40 million a year and payment. how much is this project actually costing? >> the $30-$40 million in payment is for the bus yard componentof the project . housing component costs us zero so we're essentially making that space available for a city priority to add. >> we're getting a brand-new bus yard for zero. the bus yard will cost us $30-$40 million per year. >> i meant the housing component of the project plus added housing is not costing the mta anything. >> i remember thinking this was going to be arevenue-generating project for us , we would make money from housing, did something change ?

>> not on this project. we have other opportunities in the city where we think the amount of development within the city and available property and how it works that we will generate revenue. i think at least 2018 19 it was always, we made it very clear to our partners in the city among the city family that we would not use transportation dollars to subsidize development not related to transportation . so in this case the priority for the city is to add the maximum amount of housing on this property and so that is within the inflow that we have and also to maximize , have a floor of 50 percent of those units be affordable . >> use of the maximum envelope, how many is below that? >> i think it still 544. >> 575.

that's quite a lot.>> i want to make sure i got all the numbers right. i know these are estimates but $110 million one-timecapital, 30 to 40 year or how many years ? >> the way we should look at that is that is if the mta did the bus yard on its own. that is the bosscomponent of the project . we are not participating financially and the housing component of the project . >> i get what i'm trying to get a sense of his for the next board of directors in 14 8years what bill are we leaving them with ? i'm planning this outwhat are we leaving our successes with your in terms of the bill . the way we have been left with the central subway. we had a $23 million changeover for that so i'm trying to figure out what that looks lik . >> one is that the capital payment again when construction

is complete the initial capital payment is for one $80-$200 million level and then the second is availability payment over timewhich essentially the financing of the project . 10 correct me if i'm wrong but it's also our contribution to the maintenance of the joint infrastructure sothe joint infrastructure elements of the building itself . then one positive component is that the nature of the infrastructure , like i think there's a requirement to build things at the end of the 30year payment needs to be at a certain level of conditions . doesn't degrade over time. it mustmeet certain performance developments at the end of the period of the agreement . that is probably director heminger said it was something i was interested in. that is one of the key elements in making this decision to make

sure the core elements of the building and the shared infrastructure would be well-maintained throughout the agreement. thoseare the elements ofthat availability payment . if not, you can correct me if i'm wrong . >> that is correct and that elements of long-term maintenance is significant over 30 years . it's composed of the ongoing routine maintenance of the building. lost the renewal. for instance in year 20 when a hvac unit has to be replaced, that would be required so that at the end of the 30 year term the facility, the bus yard facility is in turn through the mta and a specified condition which is typically it's in the 85 percent of its remaining life. so that effectively you're

getting a brand-new facility but it is at a much higher standard than it would be had there not been renewed. >> i guess that's somewhat encouraging. a spot. one last question about money which is how is this plumbing happening ? can you confirm the source of the cityfunds for the project . where exactly is that coming from. and part of the reason i wanted to ask this is i know this is going to be unique but sometimes it's just a shortfall between the development is done and it starts. that becomes an issueand where the money comes from becomes a liability . so what is the source of the cityfunds ? >> as of today, the current source of city funds is the transportation field pass and our operating funds they are as i said repeatedly ,

part of the reason that we're using this particular method is because there are no significant capital funds for our facilities and don't have our federal funds, they can be used for this particular purpose.the sales taxes exhausted . there's no more sales tax until the authorization occurs for this type of infrastructure. the agency has to centrally old buildings and we need to replace them. so it will be the availability payments would be for our operatingdollars which is our normal enterprise funding sources . and the capital payment will use part of cip plus which is the next item on the agenda like the agency will have a large capital payment on this facility project. and we need to start the planningto have those dollars available in the fiscal year 2627 . >> okay. two specific questions about the redevelopment agreement

contractit was long and very complicated . the only two questions that had to start on this point is a 16 and talked about what was the lead developer's cost versus us and one was if there project site conditions revealed that their due diligence investigation differ materially from the conditions imposed by the rest of the document that would be their cost so this gets to my question about and this is an issue with two of our most recent projects in this exact thing there is a difference investigation down on the project site from what the reference document that is given to the developer are. so that to me feels like we are not protected if during preconstruction or something different. there are unforeseen conditions or something different on the ground we didn't expect.

is that the caseor are we protecting ourselves in a way that we work in the previous large projects . >> i'm going to let jim and carol take that one. >> that's a great question. every time we did there could be things we didn't know about. we did early due diligence we did our june technical investigation. wedid an environmental site assessment , two-faced part investigation. and investigated the whole site to the extent that we could and then we further charged the developer and the pda term to do more. and during that time if they discover more than that could increase the cost. we don't want tosay carte blanche you have everything . we don't want them to set their price on what could potentially be an incomplete amount of site investigationbecause you , we as the city break a premium for

numbers. we are trying to right size the risk and allocate it in the right way so that we give them the opportunity to do additional siteinvestigations . and if they come up with conditions , then we will have a base set of data to utilize that cost in comparison to their financial proposal and just about as necessary as if it were a quantity adjustment. so by the end of this due diligence and prior to the contract procurement we will have ideally everything exposed.and then that is essentially takes us to the end of a pda term. >> real. >> ,are you inquiring to the specific kind of due diligence and that's one of the issues that size is a hole that so that we can see the certain width of the pipes, saying we need to do xyz, a bnc based on some of the other projects you have?

>> we don't prescribe their method of site due diligence . >> so potentially they could go inthere and say wedid our due diligence . we looked at the site . we think this is the site requirement. this is what we found. and we've done our assessment which seems what you saidis everything we could so it's not like we didn't day underground and recall anything . potentially they could come back and say there's all this stuff happening on theground. we had no idea it was going to cost so much more where does that put us in terms of risk ? >> you would have toestablish a contingency for that . at the endof site due diligence on our part and at the site due diligence on their part , they will have procurement. wehave exhausted all of the investigation that needs to happen underground .

recognizing this isn't a linear corridor like vanness, this is the site that hasn't been developed on since the existing facility was built in 1915. so there is an element of recognizing really the risk profile of thisparticular parcel .but i'm not sure if i'm getting an answer to your question. >> i guess i'm just wondering ifwe've learned from the mistakes of the last two major projects that required some kind of expiration . and then were we written in those protections in the settlement agreement? >> i know i'm glad that she does. so as consent, we did our own due diligence in advance. we have done our own. i've seen it. at least sixcost estimates on this project. we recently did another one . that includes contingencies in it and i think for the board to ask the appropriate pse's to

consider risk is correct. right.but they're always going to be rests and again, we spent the whole day doing a risk register for this project to consider all the various things that could occur and we have a response to each of those if they occur. these are the right due diligence questions for the board. to answer yourquestion director , we did our ownreport. we did the best we could . wedeveloped estimates . we continue to update those estimates. but of course the lead developerwill want to do some of that themselves . which is legitimate and the answer is to make sure there's appropriatecontingency for unknowns . that could materialize .go ahead. >> just to add a couple of things director. one is that the site due diligence part of the work during the redevelopment agreement phase. it was perhaps different than

in a more commissionable construction project. is that this is being done under the major redevelopment agreement is you have to think of it more as a partnership over a collaborationbetween the city and developer team . whereby the contractor is not yet onboard at that point in time.so the city and developer, you have a common interest in identifying what those carries the site and identifying what are those risks. so as to establish the conditions of the bids for the contractors, the design deal contractors that would occur later in theredevelopment agreement . so then the city and developer will work together to prepare the rfc that will go to the contractors . >> do we have drawings of what is underneath the ground? >> that's what tim was

referring to in terms of the prior technical investigation that were very expensive. i don't remember him, how many were made but there were multiple borings. there already is a good thing today and this is confirmatory duediligence at the supplement . plus in addition to that, with some additional items related to hazardous materials for example for the demolition of the existing old existing buildings and so on. the point being all of that site due diligence will be developed in such a way that together with the commercial provisions of the agreement , will set the stage for the procurement of the contract at a later stage. and for instance, one of the elements that would likely be part of that would be establishing a baseline technical baseline for

determines what risks are being transferred through the design build . which risks that are not in the best interest of the city to transfer because the risk that they're referring to by contractor might put on that red risk might be not be in the best interest of the city to transfer that risk. >>. [please stand by] will

>> do we change lesson learn from central subway where there's not a 40k a day base

fee? >> we're not doing that. >> only page 29 it talks about the housing commercial to delay completion of the infrastructure facility. when do those need to be done? is there a requirement housing need to be finished? is there a scenario in here where we get a it done and it's ten years before the housing gets done? >> no, it doesn't have to line up perfectly. the p.d.a. does design a method which we have flexibility to allowing the housing to be completed past the completion of the bus yard if in the event, the funding strategy of the housing developer and the affordable housing developer it get public financing awards in

place to maximize affordable housing. if it is determined, that completion of housing doesn't perfectly align with the completion of the bus yard, we have the ability to separate the close and therefore separate the completion of housing from the completion of the bus yard. you have 213 buses coming in and out of the facility every day. we defined the interphase risk, you may do this and you may capitalize on the flexibility, to the extent that you do not violate the interphase risk. you cannot impose, otherwise present safety issuer if the bus operations and maintenance.

>> i'm looking at what could possibly go wrong. the housing -- 50% affordable. it's unclear how much money they'll be able to make. it's possible that they'll finish the bus yard before they finish the housing. there's a certain amount that they are allowed to do to build the housing while there's an active bus yard on it. it could delay the housing by a bunch if they need to swing beams overhead. couldn't that delay area of generating revenue because we need to operate a bus yard? can they sue us if that? >> we have a hard stop on

requirement for completion of the bus yard. which is early 2027 >> i want to clarify, the predevelopment phase is the predevelopment phase to deliver the bus facility. those future agreements when they come to you, are going to have contingencies built out and how we're going to handle that. that's all to be negotiated at this point. >> director yekutiel: thank you. i appreciate that. you try to find a balance specific enough without going to

the nitty-gritty. i have one more question on the p.d.a. how we're making sure of all inner workings of this? you have housing development on top of active bus yard, water, electricity, distribution. i imagine it's complicated. is that written in the p.d.a.? >> the design needs to be integrated all at once. if they are shared building system, all of that need to be developed all at once. >> director yekutiel: can you explain to the board why this is worth half billion dollars? it's a lot of money. it sounds like lot of this was discussed before the pandemic. now it's 2022. we're facing a different financial situation including substantial drop in our amount of people taking our systems. why are we doing this?

>> jeff, do you want to try this one? >> director tumlin: i can step in. we have been running a deficit for quite some time. what that means, we have been gutting maintenance in order to be able to run our service. one of the many places where we have experienced many decades of deferred maintenance is our potrero yard. which is not only seismically unsound, it also has antiquated facilities that means that the function of that yard, which is maintaining our fleet is ineffect. -- inefficient. we're wasting tame. this is a perfect example one of the many places where we can use our capital money in order to improve our operating efficiency

and also deliver a much higher quality workplace for our workers. both for the actual work of the maintenance of our vehicles but also welcoming place for our bus operators to come back home to. we don't have a place for our operators can have a meeting or be able to have their lunch in a basic dignified setting or have functional lockers. to see what our front line workers have to face when they start work on morning or start work whenever they are starting work. >> if you have not done the tour of the potrero yard, we're happy to provide it.

it's the streetcar facility that was made a trolley coach facility that is well beyond its youthful life. we need to be prepared to have infrastructure in place for battery electric bus. the storage that we need to have and the technology required to do that based on our -- forget growing the fleet, converting the fleet. >> director yekutiel: what we're spending m.m.a. to handle these buses in the interim. we're spending $1 billion on the project, i'm wondering -- i know this is a bit late to the game, is this really the best way to serve this mean? >> director tumlin: yes. potrero is not the only facility

that we have that is long past its useful life. the expanded surge stage unlocks our ability to address maintenance. very difficult to do maintenance on a facility while it's in active yard. it's much more cost effective to clear all the work out and either rebuild in the case of potrero or repair. we'll be able to do depending upon our availability of capital money, it's one of the things we're doing to position ourselves for federal infrastructure dollars. one of the reasons why we're super eager to renew our general obligation bond to provide local match or federal money to help us upgrade our antiquated

infrastructure. >> director yekutiel: thank you very much. >> chair borden: thank you. director lai? >> director lai: thank you, chair. thank you everyone who is still with us. i know this is very grueling. i love that all of my colleagues have already asked really fantastic questions. i'll try to consolidate lot of what i want to ask and defer some of them because it sound like we might have a follow-up hearing. may be i'll start by just saying that i think the comments or questions from the director so far is certainly stemming from a place that i share which is a bit of skepticism because we have track record in pursuing major projects.

the fact we're doing something very new even compared to other transit agencies -- we're not the experts at it. the heightened chances of error is definitely real. we talked about the risks and cons doing this model. could we quickly recap on the pros of this? i know we have-conversations around this. i want to frame it in the context of why we're gunning for this. i think may be jonathan or director tumlin, somebody, who has followed this for a while, if you can step in and remind us of -- touch on the time sensitivity and time certain,

efficiencies. talk about the max bid price which hasn't been mentioned in the conversation yet. inform us and the public about the pros of why we're pursuing this model. >> let me kind of add on what director tumlin responded to. what he was hinting at the modernization program. our master schedule looks at all the sites. they are all contingent on one another. we consider the growth of the fleet. in ten years, there's expectation we'll have more service and more vehicles. the electrification of the fleet that we have that infrastructure in place to convert to battery electric. we're on a very tight timeline where at some point, the space that muni east is insufficient, that's our entire fleet. considering growth, service

requirement, technology and timing, we only have so much time director tumlin said, to close down a yard. the sequence of muni metro east, potrero yard, presidio yard and swapping around kirkland, base the on that aspect. that was part one. i do want to remind the board, that future point in time, that muni metro east will be required for the expanded lrb fleet. that four acres only available to us for so long until the lrv fleet gets so large. sequencing, scheduling and time has been a core component of the building progress modernization program. that's first and foremost.

second, when we considered the timing requirement, meaning we have this window of time, we need to electrify by this date and this much space. we considered different delivery models and method within the schedule and time constraints that we had which would be the best option. we spent multiple days debating those options. >> from a schedule perspective, which is one of the major considerations, given the policy

direction of incorporating housing as a joint development and the need to go through the environmental review process, whereby, you have to have a project and you have to have a project. the only way really to resolve the schedule related to that is to have a process whereby you can incorporate the input of a developer team that has the capability both of delivering the bus yard and the housing so they can work with the city team to develop the design of the project up to enough level where we can be certain that's a

feasible housing element. there's a bus yard that meets the technical requirement that the m.t.a. set for the corporations at the bus yard and the performance of the bus yard. that is the project that gets environmentally cleared. once you get through that threshold getting environmental clearance and getting all those approvals under california system, then, we're in position to finalize the procurement and get final delivery contracts. trying to resolve all of those different issues is really what drove towards predevelopment agreement. there's another aspect of that. that speaks more to the process in order to achieve a schedule. there's another aspect of it, which is what is the outcome and

why is that outcome in better interest of the m.t.a. i think the answer is that, in addition to keeping the scheduled goals, in this process, it's essential that in order for the housing to be financially feasible and successful in its operations. it has to be fully integrated, not only in its design but also in operations. that process of integration has to also ensure that there is what we called the elements of the infrastructure shared by the components that are well maintained over time.

final part has to do with risk management. they can deliver projects on time and on budget. three examples are long beach civic center, long beach courthouse and uc merced cam ca.

they are in the infrastructure space of building vertical building infrastructure. not roads. all of those three project have had successful history of delivery. all that history are lessons learned. documentation that we have worked with public works or working with m.t.a., working with the legal team, the city attorney's office as well as the legal team has experience in these types of procurements. will continue to incorporate those lessons learned in terms of what are those commercial terms and conditions that will ensure that we have some time budget delivery.

that risk transfer is one of the main benefits in which extends to -- [ indiscernible ] >> thank you for the robust response. the gist of it, we're pursuing this format because we believe, or the agency staff believes that other people other than m.t.a. can potentially deliver a complicated project faster and better for us. that's sort of what i heard. because we have such an

aggressive basically no go date that we have to complete a project by a certain time to make these decisions quickly. staff basically saying this is the best path forward. go ahead and address that. >> thank you. i would may be to get closer to the problems that we're solving, to translate the theory and to practice and to your original question. how did we end up with this model. we started out looking at with the help of europe and joint development projects such as this. we're trying to do is deliver two really dispirit asset classes. that is infrastructure industrial bus yard. either which we know we have to do. combined them into one project.

we have quite something little bit different. we looked at several different paths to start off with. we went through a really rigorous process by which we said okay, let's generate a road map here. how do we get to the end result that we're expecting for a bus yard that's on time and under budget. that's objective number one. the billion, the second half of the billion is housing cost. how do we do this? do we do a hard bid? do we do not a hard bid? i would say if there was no housing, if we kind of put aside

the housing of public land initiative and said, this is just capital project, this is a city investment, this is a public project. we can do a hard bid. we can go straight to design build now with the design criteria that we have. it's developed well enough where we would have full confidence to do that. we would be going to market as a traditional design build project. >> director lai: understood. thank you so much for reminding us of priorities in this. which is to deliver the bus project. i would challenge the fact that i don't think m.t.a. is capable of developing the housing. you said that we know how to do both. i don't think we can do both. the city has not been the business self-producing housing for quite some time.

i think your point is well made here. i'm going to go into what i actually am concerned about, which is like the action in front of us. i think i share some of the sentiment this is uncomfortable action item because you're asking us to consider terms. when i don't know what i'm buying. i have no transparency into what the product is. i have no idea if these terms actually match up with whoever is the winning team, which we have three, i guess two teams of. for all i know, may be they are so different that these terms may not quite match up. we're trusting that the city attorney's office navigated that. nonetheless, it's just little unconventional has director heminger said. you're asking to agree to term of purchase before we know what we're buying. i have two focuses here. one, i want to make sure that in

the predevelopment set of terms, we are protecting the agency against risk. we know what we're getting into. i don't know that we do. it's our first time doing it. again, i'm going to push on that little bit. the second part is that, to me, which is at this point this time, we already gone down this path quite far. my second area of focus is to make sure these terms here in front all of us collectively, actually gives the winning team, whoever that may be, the maximum chance of success in delivering this project. i have some serious concerns over the time line that we're setting, in whether or not we're really setting all of us for success here. i will launch into that and hopefully i won't take up more of the time than we need to. first of all, one of the risk questions for m.t.a., i heard lot about how to compensate the

work and pay as we go model if for some reason we have to exit out of this arrangement. can you talk a little bit about how we're offsetting our own risk in terms of let's say, you talked about the city attorney, the conditions as default. can you describe broadly what those default terms would be. for example, nonperformance, i assume would fall under default right? >> that's right. >> it's pretty much standard. it's nonperformance. other one is bad behaviors.

>> director lai: let's say the development team falls into default with the terms do we have the ability to claw back some of the continuation payments? >> yes. the continuation payments are not due if there's an event of a default. continuation payments for actually achieving the entitlement milestone. >> director lai: if they -- [ indiscernible ] it's paid 50% of fee i think. >> the continuation payment is not clawed back if they are later in default. they would have reached all entitlement milestone. the rationale, staff decided, we have an entitled project that's worth value. >> director lai: okay. i understand we're setting the

hopefully, the framework and the terms in this predevelopment agreement before us. what if we select a team and we realize that through that process, the terms don't quite match up with the developer would agree to or they can perform under? what happens then? are saying that we will never reopen the predevelopment agreement and what will be the path if we had to adjust this? >> the terms in what we're requiring them to do if it's not feasible to that extent? there are safety valves to make project changes. [ please stand by ]

>> then staff of or the group then that team development staff says we can't agree to the terms, what happens then? >> let me start this one off. and, good. so i want to be clear about the process. many of the people in this meeting now met to talk about the nature of the requirements in responding to the r.f.p. itself. carol, i'm going to describe it as a draft or template. >> let's say forms. >> okay. fine. the form of the p.d.a., the

each of the teams through those hours of discussion provided feedback on what would is and would not be acceptable. we evaluated it as a city again doing our own due diligence about what we thought was possible or feasible. we heard when there was consistency across the teams, this is a real concern. we decided to make some changes. one of those was the milestone payment. which we went through a lot of work to be able to do. i believe and carol or sid can correct me if i'm wrong, but they essentially needed to certify as part of their proposal that they would comply with the terms of the p.d.a. so they were aware they would agree to the terms that the board would adopt. part of the reason -- go ahead, sid. >> director, this is sid

jimenez, the city attorney's office. you're saying what if we select a developer and we can't reach terms with that developer, what would happen? there are a couple of options. we could do a best and final offer and go back to two of the proposers and then they would have to submit. we would have to get back with the proposers and figure out what would work here and submit a proposal at that point. >> i have a question related to that? would that qualify the proposers as well or would that include people only still in the running? >> i'm not going to answer that question right now. i don't think we have an answer to that right now. >> i think that's good enough. thank you for answering that question directly. that's exactly what i'm looking for. i just want to understand what that process looks like at that point. so let's continue talking about the timing because, you know, we have this tricky situation where we really need to start

construction where we're backed into it. we need it complete by 2027 or 2026. and so we've got to start construction by two years away from now, 2024. so that leads the development team two years to basically finish the design once they're selected and so far they probably just have a concept design or something. so they've got to go through d.d.c.d.s. they've got to get through all of the entitlement like discretionary approvals and they have to get permits because i think the way it's laid out in the terms is they have to be ready construction in 2024. now, i haven't built but i've done some construction projects and i would say like on a regular day, like once even if you got approval from the entitlement which normally takes more than a year for larger projects, the permitting itself could take a full year

or more. so can we just talk a little bit about our degree of certainty that we can actually comply with the time frame that this is feasible and i'm going to give you a hint here like if you guys can bring in departmental m.l.u. any kind of reinsurance that is provided for our development partners that this will actually work. like can you talk a little bit about that? >> so i'll talk about it and then tim can talk about the feasibility of the schedule itself. so the inner departmental m.o.u. includes the requirement that the mayor has set out in one of her executive directives in the review of housing projects that both the permitting and environmental review needs to be met within an expedited time frame. part of the reason this is to some extent attractive for the development team is the city has advocated for its own project. this is not a private

development, this is the city family working with the city family to try to advance this project, get the entitlement and work done which very often is a high level risk for any developer. right. but in this case, it's a city project. tim, do you want to talk about just the overall schedule and the feasibility. >> sure. and director lai, that is one of the primary pros to this delivery model to getting back to where they left it. having one single counter party that takes us from constructual design. commercial close and then onward to permitting the project, getting full construction entitlement and breaking ground, that is very much one of the pros of this delivery model. we don't have -- all the subsequent deferred procurements are through the lead developer and there's consolidation there from one step to the next that we hope

to take advantage of. >> okay. and i think in reading the, you know, city department m.o.u., which guarantees a 22 month approval time frame which sounds great if it's within the 24 months that we're allocating i guess, cutting it a little close. i did notice that a couple of departments were not signatory to this agreement. so, for example, can we talk a bit about what we think the risk profile might be and what it would take for us to actually include them into the m.o.u. because i think that would be necessary. >> yeah. authorities having jurisdiction. fire department, d.b.i. and regulatory approvals are what we defer to a lead developer. we as the city can't represent a design that isn't ours. they have to represent it and apply to d. b.i. for those

construction permits, but that's the sole reason why and we don't have control nor influence over those authorities having jurisdiction. >> well, i mean, we did provide an m.o.u., right? that other agencies most partnered agencies on this have participated in to say, yes, everybody will review it under an expedited time frame. so i think -- i think it was planning oewdd.b.w. but the agencies missing so i think this is a request that i think apart of our responsibility, we need to bring those city departments along to ensure that we are setting again, our collective team up for success. maybe i'll follow up with how that could work off line, but that is where i'm heading with this. i want to maybe now talk a

little bit about how are we guaranteeing the fooezbility in terms of the cost. as i understood, the structure of this r.p., the responding teams actually do not have a j.c. on their team. so how do we know that the pricing and the performance that they provided to this election team which the board is not privy to is indeed accurate and matches more or less up with whatever past we've gotten from our own independent consultants. >> yeah. director lai, we're asking the developer in their financial proposal to tell us what they're propose engine terms of a fixed budget limit and it's a budget limit. it's not the final price. obviously, as you pointed out correctly, we don't have the design builder on board. that's getting back to the concept of that would be a hard bid and we cannot do a hard bid

here, we need the developers to get here, get into an agreement and develop their housing further before we can establish an integrated full design and then go to market and get final price which folds into close. what are we asking for right now and why do we have within this for this individual one and only solicitation we gave the flexibility for teams to fail this requirement with either cost estimating expert ask we stated a preference for general contractors to serve as a c.m. consultant in that regard. we've kind of borrowed an

element to establish a price right now when it matters most when we have competitive attention in the solicitation and that's the six budget limit. >> okay that's great. there are relevant skill sets from cost estimators and construction folk who is are involved with the team. the think my last question has to do with bringing on the design builder because if i understand correctly we're going through complete s.d. before we bring that in and i think in a normal course of a project, it's not -- it wouldn't be abnormal to do a pricing exercise at multiple stages to confirm where you're headed. maybe 75% or 100% you do it and

then you do it again. it sounds like in this case if we are calling this a design build which i'm not sure we are are we bringing in the builder early enough because that was one of the mistakes i think we made. >> right and then you brought in the c.m.g.c. upwards to 90%. >> i don't remember. in this case, we're bringing them in at 100% s.d. which amounts to 20% design. so it is that sweet spot. you don't want to bring them in too early because there goes your reliability in that bidding. and all the rest has yet to follow. we are finding that sweet spot in terms of needing, not being able to have a hard bid, but

also establishing a budget to design to and, you know, they're designing to that budget. we're keeping our performance requirement as they are stated in the design criteria which very much is structured like a design build procurement which points to the bus yard and i think as i say this, i think it would be a helpful xaers to walk through the technical criteria projects. one of eleven divisions. >> i think you answered. you did already earlier, but thank you. thank you, chair. >> one quick thing, director lai is in hard bid whether it's design build, design build finance or design build maintain procurement is good practice to go to a hard bay situation with a design that's in that range that we're

talking about here depends on the project, but that's not unusual. and here, it coincides with the comments we made earlier about the ceqa process and ensuring we have financially feasible housing projects in conjunction with the bus yard. so that's kind of the sweet spot that he was referring to. >> also, we do have conditions proceeded to this procurement and it's not only getting to 100% s.d., in other words, 25% to 30% is also in completion, but we also have to have confidence in the ceqa certification. and then oh, no in the process of getting ceqa certification, there's a big adjustment and there goes your liability in that final programs. and i think i touched on those

three things, yeah. a design that's biddable, ceqa certification and an l.b.e. plan are the three main tenants of what would amount to successful procurement. >> i'm going to talk to you all for a second. back to director's lai's questions. what happens when we can't come to terms with the selected proposer. which is $5 million. so in addition to resorting to a best and final offer option, we could call in the bond. the bond, one of the requirements in the r.f.p. is that the proposers sign on to the terms and conditions in this p.d.a. currently as it stands and if they don't, they try to change immaterially,

then there's that option. sorry about that. >> that sounds okay. >> that's great. i'm glad you mentioned that. thank you. >> did jonathan want to speak to that also? his hand is up? >> actually, because i think the questions are wrapping up. what i do want to say is i actually appreciate all the questions from the board on this project. this is good due diligence of a major capital program that the m.t.a. is delivering. the questions are appropriate. i think what you've heard throughout today's presentation and discussion is we took a lot of the best practices and lessons learned from other projects both in san francisco and nationally and tried and spent a lot of staff time, i

mean you're -- i can understand the frustration because you're getting like three years of work in a single meeting in a 200-page document, but what i'm hoping you're getting from all the participants and people who've been working on this project the in-depth thoughts they went through in considering this process, these steps, consequences, and risks. and it is absolutely appropriate for the board to ask a question but i appreciate it because then we don't have the issues that we've had in the past with big projects that the agency has delivered. so i see it as positive. you know, director hemminger asked to take in everything you hear today. to continue plate everything you heard today before taking the action. i do want to stress that final point that's come up, we really do want to lock down the terms.

from a staff perspective, we think that is important to continue with the process, with the integrity of the work that has been done to date and to keep the project on schedule. so i did want to close it back. i see others have as well. >> i want to speak. i haven't had a chance to speak. i will be brief here. we still have another question from director hemminger and director hundredsi. i see major problems being developed. for people to meet the time lines and the benchmarks needed. i have my question really is related to the project teams that we're considering. they don't have enough of a track record of all working together or on these types of projects. that's my biggest concern is capacity of the team's bidding, their work together, how we're evaluating all of that, because their expertise in this is predicated on their past experience.

we've learned a lot also from the central subway on past practices contracted that we worked with there. so i just want to make sure we have the right people teed up to help us do this portion of the process since it feeds into the bigger portion of the process which is the actual contract and build. and maybe you can talk about the approval process. >> i think you hit and you might want to expand. that was the hardest part of this project and in the design and the procurement process. as tim said, we are meshing two pieces of infrastructure and two different delivery types and expertises into a single project. and that has always been the highest level of risk for the project that this type of infrastructure has not been built before. do you want to expand on how we dealt with that.

especially the design of the r.f.p. and the teams we required for the proposers in the r.f.q. process. >> sure. >> chair borden, that's where we began. you hit it right on. in the pre-qualification phase, we went through an extremely rigorous filtering process to narrow the four teams that submitted a statement of qualification down to the three short list of teams. and so each one in their own respect is an expert within that with which they do. demonstrating the proper capital and that could be sources that are available and also the designer. as it were in and of itself a consortium of bus designer. as well as housing designer.

and so i think suffice to say we did prioritize history of working together although each one in their own regards is an expert and professional in the requirements we have and that's where the benefits of having one single counter party. is so important to get that organization correct so that those interface risks are really on the lead developer's side. so they they are coordinating their team. to put a finer point on it in our r.f.p., we have a project management submittal to coordinate all of this. tell us how you're going to do that and why you're going to be successful and we're evaluating them on that. i don't know if i got your question. >> i think you did. i guess the question is that after you select the developer, i know we're approving this

contract. do we not have another approval until the next big portion is approved. how does that work? >> yeah, that's right. after we select the developer. whether this selection is approved now, we're just inputting it. it's the product of a three-way negotiation that was over nine months up to 36 hours spread across evenly across all three short list of proposers and this is what we have. we're essentially inputting the fill on the blanks. it's the receptacle that will determine the process and the outline for everything that's to follow and the p.d.a. firm and once they get through all those work products, that project agreement is what comes back to you with all of the actual terms of the deal. so that's the final price, it's the housing program, it's the performa, it's the financial model. revenue sharing to the extent that it is there. that is very much this deal and

not what is put before you right now which is the form of the p.d.a. >> if i could just add to that, tim, director boarden. one of the things we have learned is the fact of what is causing this action now. the fact it's not in the best interest of the owner to be in a sole source negotiation of the terms of the development agreement at a stubs at that pointive level. but you only have one team across the table from you. and that describes all these extensive one on one meetings you've been given the same opportunity to do so. if you state in the proposals that they are agreeing to the terms of that final form of the

development agreement that was published one month prior to the proposals, the proposals and with that proposal security backing that commitment is why it's so important to do that. in order to precisely avoid sole source negotiation that will extend for a long time and will most likely, you know, leave you in a less good position than otherwise. >> yeah. and the benefit of preapproving it now which disincentivizes the possibility of further negotiations. it rather incentivizes going rapidly from select institution. >> so after they complete the p.d.a., does that mean that that project team automatically

gets the larger project or is there another kind of r.f.p. process based upon that new document? >> no. this is the selection of the lead developer and their core development consortium. and later comes the deferred procurement for the design build contractor. that is the big contract. that is the next opportunity, but essentially, it's a sub agreement under the lead developer and then alongside that, design build agreement is an infrastructure facility maintenance agreement, that's the facility maintenance, that's the maintenance scope similar concept there. >> and those are by far the largest contributors to project costs. the design build contract and the maintenance build contract. separately, you have the financing cost which will also be subject to, you know, a competitive, it's of a different nation but it's

effectively a project that lowers debt for the project. >> great. i'll move on because i will let director hinzi speak and then you can speak after her. >> and i'll be very brief. i think my question somewhat relates to chair borden. i feel good about it, but it does strike me in the comments of the directors and in this conversation and hearing you talk about our approach here is that we are sort of hitching our wagon so to speak to this one developer and then they're a team and then when they subcontract essentially the

design build portion we're hoping that the folks will be around to maintain and the yards and the next 30 years so they can turn it back to the m.p.a. and it's in a state of repair. so can you talk a little bit about sort of in general to the fact that it does seem like we are hitching our wagons to like one -- this one developer and then they're subcontractors and what sort of protections we have against the sort of general risk of this approach. >> yeah. great question. this is the one award this is the one that leads to the

others. so what are we doing to mitigate hitching the wrong horse. there enlies part of the risk transfer. so if you were to consider the alternative which is, you know, having multiple agreements aside of each other, then you have two independent counter parties managing two potentially desperate scope of work, then who owns that risk as well. and so that's a complete -- that's what we're really trying to avoid here and if the lead developer gets selected, we enter into a p.d.a. with them and then we proceed through all of the milestones that are spelled out in the p.d.a., that would be append dix b1 for those to look at. and it walks through each milestone which is consolidated within three phases and each one of those has an incremental approval. so even though this is the one

selection, we have incremental approval that gives them the authority to proceed from one p.d.a. phase to the next. in other words, we don't give the lead developer one and say good luck, see you in 2027. we have three more n.t.p.s, one for each respective phase with a corresponding termination payment should they fail to meet the expectations and that's our recourse which is to invoke the termination payment at any one of those three moments. did i answer your question? >> director: i think so. then, for example, if something were to happen, their corporation and they were whatever, that would invoke sort of what gets to director lai's question about what we could do in that sort of sense. [please stand by]

>> director hinze: thank you. >> chair borden: we'll have director heminger close it out [ laughter ] >> director heminger: i do appreciate your patience. i'm not going to abuse the privilege here. i'm going to ask one more question. i'm wrestling with this problem. trying to figure out a way to solve it without blowing up your process. let me suggest two ideas. what if in addition to approving the form of this p.d.a. now, we also, this board, acts to approve winner after you recommend it. that's one option. second option is, if we don't act now at all? you clearly -- you are the guys who written the p.d.a.

agreement, not the board. to the extent you need some sort of incentive for them to know that they should proceed to not further negotiations but signature, i think you achieved that objective if we don't take an action today but just take the action after you recommend award. the first idea is two bites at the apple. the second idea is just biting the apple at a different time. you don't have to answer it today. if you want to think about it. i probably prefer you do that. i do think that's one of the things i'm wrestling with. it's not so much merits of the case. it's that we're used to doing business where we got the final say and even though there will be saves along the line, before we get to construction, this is the one that's in front of us.

>> you making a motion? >> director heminger: no. i want them to think about that. the motion i would like to make is that we continue the item to our next meeting so that the board can continue to do its due diligence before it votes on this transaction. >> chair borden: is there a second for that motion? sound like the motion is dying. >> i'll second that. >> chair borden: is there any discussion? we won't vote on it until after public comment. anybody wants to give a pro or con argument about that. i think if we're going to continue it the next meeting, provide specific instructions to staff as to what we need to be

able to vote on it on consent next meeting. >> i'm very happy to support continuing this to the next meeting. >> director yekutiel: we expressed variety of concerns. if there's some way that those concerns could be responded to or come back. these were all the things you were worried about and here are responses to it. here's why you should be worried or shouldn't, it will be helpful. i don't want to create hundreds of hours of staff work. >> chair borden: sound like there's a middle ground bringing another action along the way. director hinze, do you have another question?

>> director hinze: i have a question that might lead to a suggestion. to director heminger's idea of reapproving this agreement now approving the winner, was the plan all along to do that? would that be a new thing? we were going to approve the changes. >> honestly, i think i would like to take director heminger's offer to think about it. only because i think i need to consult with the city attorney about it. the standard contract process, let's pretend we do design

build, what the board really approves is the authorization of the expenditure and the terms of the contract like the administrative code lays out the process to the low bidder when -- win the contract. there can be performance for history considered when you make a decision. in the same process, let's say we do two part. you lock down the term but then you're asking for a veto based on there's r.f.p. process based on legislation that you as a board agreed to and the board of supervisors that would determine who the winner is based on criteria.

if you approve to form the p.d.a. we'll come back to report anyway after the fact. i do want to consult with the attorney about how that might be structured before i give an answer. >> director hinze: we have to open up to public comment to let colleagues know i will be in supportive of the continuance. >> chair borden: great. for members of the public who like to comment on this item, we are talking about the -- it's for the potrero modernization, lead developer agreement without lead developer name. if you like to comment on that and opine on the topics that the directors have been discussing, press 1, 0 to put yourself in the queue. are there any callers on the

line? >> caller: this is david pilpel. good or bad news, i'm still alive after that lengthy discussion. that was good and draining discussion. there are many issues and risks here. for whatever reason, i wanted to compare it to the late 1960s and the early 1970s when simfric was the funding source for local match for the grants since the urban transportation has been created part of the great society program. there wasn't local bond money.

some examples, more recently are the 24th and utah property. i don't think muni was fairly compensated for that transfer. the geneva upper yard where we took street card tracks where lrvs could be stored. in the process of turning into a housing project and muni did not get fairly compensated for that. now we're going to end up spending millions to expand track storage at m.m.e. to make up for what was left at geneva yards. transit got shortchanged.

one thing i heard that the budget workshop will work on the core. should an agency with huge issues and uncertainties that cannot even deliver basic transit services now be doing this. i agree you should put this off at least two weeks and how best to proceed in the future. thank you for listening. >> chair borden: thank you. are there any other additional callers on the line? we'll close public comment. directors, this matter is now back before us. we have a motion and a second to continue to our next meeting. is there any further discussion?

please call the roll. >> clerk: sure on the motion to continue to the next meeting. [roll call vote] thank you. the motion passes. >> chair borden: that brings to our next item. >> clerk: item 12 presentation and discussion on the sfmta process of prioritization of capital infrastructure needs and advocacy strategy to secure funding. >> chair borden.

this is our first follow-up in our budget process. it's going to be pretty busy meeting from now until the end of april. i think this was a follow-up to your board workshop and question that i know many of you have been asking at least over the past six months about how we're going to fund all the things that we want to do. one of the core questions that i think came up at the board workshop, we wanted to make sure we followed up, how does the sfmta identify capital infrastructure priority. how do we design that list of projects that we advocate for? there are two core elements that we use to make that

determination. one is the 20-year capital plan which came to you in november. that reflects all of the capital needs that the sfmta has for the transportation system in san francisco. like everything that this agency is responsible for within that system. financially, unconstrainted lot of you asked, what will it take. the capital plan is both to reflect the cost of what it will take without any financial constraints. the other thing is our annual state of good reparroter which is very databased. it focused on the existing infrastructure and condition assessment and costs on the things that we need to keep in good repair. those are the two core planning documents. one is done by the street division and planning section, the other done within the finance information technology division, my division and asset

management unit. here you'll see the data that we use. what is all the infrastructure we have? what components make up huge parts of infrastructure. we have $15.6 billion of infrastructure. the core elements we look to for this data is, where do we have significant risks in the infrastructure. again, this is the condition score. five is brand new. nothing that we have is brand new. again, as noted in what was reflected, in the general obligation bond program it did get approved by the board of supervisors, facilities is an area where we have a lower score. we have a higher number of percentageful infrastructure in that core condition. parking and traffic is our lowest score at 2.30. lot of that has to do with our

parking infrastructure and traffic signal. other systems and vehicles are largely non-revenue fleet that we should definitely be investing more in. this is a point of data by which we make that decision about. potrero and presidio are over hundred years old. same data is showing facilities and our parking and traffic infrastructure are those things way behind.

lot of our federal grants and funds and sources are directed to that infrastructure. you'll see how that works shortly. this shows all the things we like to fund. the capital plan reflects $31.3 billion of capital needs. kind of what those things are. restore and -- not only -- adding red and green lanes to our street.

this is another element that we look at. where is the need, where do we need to make investments here, you will see, facilities show up again. streets show up again as elements we need to make major investments. you'll see restore are also elements of that. the c.i.p., despite what we think, it's really how and when in the sequencing. the 5-year c.i.p. is not necessarily meant to be a prioritization document. we do want to use data and we want to inform you the board to the best of your ability to make sure the funding is going to the right place and has the highest public impact. five-year c.i.p. take intoaccount all of these thing.

the five-year c.i.p. adds that fiscal constraints how and when. how and what fiscal year will the project be funded and what phase will we fund. then, those are the elements of the data like what elements of the data do we take to make she's decisions. then, how do we take that data and make decisions on what to fund as we develop the 5-year

c.i.p. there are two things. one we have called the weather map. we've called it the weather map for ten years. it supposed to tell you a storm is coming. the risk analysis, which is i showed you, the agency has these commitments and we need to follow through on what they are. the weather map, i will go slow. it's a lot of information. we take the data from the 20-year capital plan. that reflects unconstrain needs. if we were to submit up the pie amongst everything, how would that pie be sliced. strictly based on need. we take the revenue sources and those largely -- i told you this before -- lot of the revenues in our five-year c.i.p. how they are used are decided by those

agencies that fund us. the federal government has very specific requirements on how their grants can be used. the san francisco proposition k sales tax has 43 expenditure plan line items. the amount allocated is designated for that type of infrastructure. lot of our grants is designated for specific things. the distribution of our revenues for project has to do about the regulatory or legal requirement. what the weather map does, it show what is we should fund. meaning if we can use the dollars wherever we want, meaning the funding agencies tell us how we can use them. we do have some discretionary dollars. when we look at the weather map, it's how we kind of decide with the discretionary dollars where we need to fill gaps or tray to

match infrastructure backlogs. the state of repair is bad. we need to start investing in it or we really should be putting more of our discretionary funds to take care of more of this need. here's a 5-year c.i.p. this is the capital requirement of the project. when you put that together, you get this. this is the weather map. column one is the capital needs from the capital plan. the $35.1 billion. that's the distribution amongst the campaign programs. the percentage of needs reflect, okay, unconstrained and based on the need that we have for the transportation system, this would be how it would be distributed. this reflects the percentage of need amongst all the things that we said we would like to do. if you split that up within a five-year c.i.p. window, we would need $8 billion c.i.p. to get to all back within a 20-year

window. the current five-year c.i.p. is $2.458 billion. you'll see where the dollars are distributed and the dollars are largely distributed by what the funding agencies tell us we can use the money on. the next column, that's what the funding agency say, that's percent of c.i.p. revenues. you'll see the delta and after that, the last column, which is the one we considered is the percent of need met. when you look at that specific column, transit -- which are formulated and based on investment in state of good

repair. you'll see fleet. 62.57. through the federal government and through the metropolitan transportation commission, lot of the federal funds that come in the region and local sales tax match are dedicated to those two things. it's appropriate for a transit agency to have large chunk of funding dedicated to those things. we have had problems in the past funding the expansion of the fleet to meet the service need. we do not have the entire needs met. those are two of the largest areas we cover. you'll see the rest of the categories are all in the teens. transit optimization and expansion, streets 14%, facilities 13%. we say, we have state of good repair need like traffic signals and facilities. we also have a huge vision zero policy need based on where we

need to put the dollars. we're only meeting 14% of need. we're only spending 7.6 of our c.i.p. revenues when we should be spending more like 14.6% of our revenues. we use this in helping us decide when we have a general obligation bond when we have other programs and the money can be discretionary where we should try to allocate those dollars. to remove risks and try to have the maximum amount of public impact. this is just the analysis we go through. i wanted to share it with you in case you have questions. second element is the risk analysis. we have major street corridor projects that are through significant levels of design that do require additional investment. lrv4, the legal situation might pose some risks to those

projects you heard about potrero yard modernization. it's not funded in the c.i.p. there will be capital commitment some time in the future on that. our facility renovations, we have continued improvement and we don't have dedicated dollars for those. when we take the analysis part of it, what is our advocacy strategy to add to the 5-year c.i.p.? we have a revenue constraint in the 5-year c.i.p. development impact fees are down. general obligation bond 2014 bond largely allocated to projects already. there are no future bond issuances. we did shift $150 million of prop b to the operating budget. that $150 million came out of capital. we shifted $10 million a year of our development impact fees to come in on a year-to-year basis. that's another $50 million that

we took out of capital and put in the operating budget long-term. we are in a very low period in revenues. however, we're also in a window where there's tons of potential between the general obligation bond that will be on the ballot between sales tax reauthorization that will be on ballot in november and the infrastructure bill, there are opportunities to increase that. these are those options. we'll call that c.i.p. plus for this cycle. we will include that in your adoptive 5-year campaign improvement program. we think the range of revenue that can be added to the c.i.p. as soon as one year, somewhere between $300 million to $1 billion. it depends on how good we are as securing these resources. one g.o. bond is on the ballot. sales taxes reauthorization is moving forward.

lot of the categories that fund our infrastructure are exhausted in the current 30-year sales tax program. we have no more dollars for fleet. we're running out of money for paratransit. that's an operating need. facilities is exhausted. there are no more sales tax dollars available for that. hopefully that will -- we think -- i want to stress this. a huge amount of the money in the infrastructure bill is actually competitive grants that will be decided in washington d.c. there were increases in the formula fund. big dollars are through competitive grants that will be through fhwa, through the u.s. d.o.t. secretary's office directly and through the federal

transit administration in washington d.c. we do think just based on our prior success, we could addly $280 million to the 5-year c.i.p. to successful competitive grant. we are making some adjustments to revenue. we're going to get the money for this project or we're not. in a normal 5-year c.i.p. cycle, we do get about $210 million. that is normal for us to be that successful in bringing that kind of revenue through competitive brandt responses. the range is $300 million to $1 billion. here's kind of the strategy behind c.i.p. plus. currently, we do anticipate through the state that they will

designate a component. we signed on a regional letter that we're asking for 75% to be designated to state transit assistance. 25% to the tircp program with a trailer bill that will open up the eligibility for other projects that the m.t.a. has. we're also within the region and with m.t.c. advocating how the additional bump-ups in federal formula funds should be used. we're asking for additional flexibility beyond the standard restrictions that exist within the existing programs within the region, transit capital priorities. we're owed our performance in the past on using the grants -- we're owed $40 million. overall, there's a cap on what a transit agency can get in the region and we're hoping that because there will be more federal funds that cap can be

increased. we're workingen that now. on competitive grant, $210 million will be pretty normal within the 5-year period. we do think based on our success rate, we can bring in another $280 million or more. there's the federal capital investment grant. i want to talk about that. we'll be giving the policy and government committee an update on this particular item an action in our initial recommendation next tuesday. just to give you a sense of competitive grants, the agency typically has a success rate of around 50%. for every two grants we put in,

we do get one of them. you'll see the number of applications in our success rate over the past three fiscal years. some years, we put in lot of grants. i expect we'll be putting that many with all the new programs happening owe the next couple of years. in some years we do pretty well, $87 million, tircp will be an opportunity. good $20 million is pretty normal for us. over 5-year c.i.p., that's $100 million. the staff they do a great job advocating on behalf of this agency. these are the grants we have upcoming. tircp, will be going into the second time for $25 million planning for the presidio yard. you have no money. we're going to put in a grant, active transportation at the

state. we have significant numbers of grants lined up. we are continuing to evaluate all of them and prepare applications on behalf of the agency to advocate for our priority. talking amongst my team and our director of government affairs, we have a huge advocacy campaign that we're moving forward with. for c.i.p. plus, these are the things based on data and gaps that we think are the policy priorities for us to attempt to fully fund. under each of these blue statements, you'll see specific sources as part of c.i.p. plus that we are actively advocating for to get more dollars to those

specific needs. you will see safety improvements on our streets have some largest list of funding sources that we're advocating and trying to bump up dollars for. as is moving towards e-bus and our infrastructure. consistent with what the data is showing up. happy to take commentsen this particular element. i think all the staff at the m.t.a. are curious to hear the board thoughts on this. thanks. >> chair borden: thank you. directors are there any questions? >> director hinze: this is a question, would you like to hold on until public comment. >> chair borden: this is not an action item.

>> director hinze: i'll go on. thank you, jonathan. i largely agree with your priorities. for me, funding vision zero is always one of my priorities for as long as i serve on the board. it's good to see that. it's good to see that we both actively have applications in the pipeline are always going to be looking for money for that given the deadline we've imposed on ourselves on vision zero.

one thing that stuck out to me was the upgrade for our cable car program. i think that's a need that doesn't necessarily get talked about in the public but should. especially given all the issues that we've had there. last time we had an upgrade there, i think now senator feinstein spearheaded that. finding money for that is going to be difficult i know. in general, i concur with all of your priorities. our value -- per dollar value, i

think vision zero is one of the best things this board can fund in terms of getting things for our buck. i met with you yesterday, i requested whether or not kind of assumes some of the components c.i.p. plus passing. >> chair borden: director heminger? >> director heminger: you heard enough from me today. i will be quick with jonathan. >> chair borden: everybody can speak as much as they want. [ laughter ]

>> director heminger: you certainly don't mean that now i hope. [ laughter ] jonathan, you're a bit of dynamo today. that's all i can say. i noticed on page 19 of this presentation, you mentioned the train control upgrade couple of times. i certainly would second that emotion. that's a really important project. i know bart has done a really excellent job in positioning it for a lot of federal money. train control is what runs the train. if we don't get that in place and soon, i know we're going to see service continue to degrade. what you didn't have is the potrero yard. although adding the housing component to it is sort of big pain in the ass lot of ways, i think in terms of attracting

discretionary funding, the fact that we are trying to use our assets to get the housing crises as well as our transportation needs, should be pretty attractive. i know you said that you're going to need to line up the capital piece that milestone payment before we enter in the construction contract? >> that is correct. >> director heminger: we don't have a whole lot of time to do that if we can keep the schedule that's in there. i guess the last one i would mention is the cable cars which again, were a showcase for attracting federal funds right before the democratic national convention san francisco. they worked out well. i think that's another good indication that's one that look good on the road. that's all i got.

>> chair borden: any other directors want to make comment. we'll open up for public comment. this is time for members of the public to comment on our capital plan and advocacy related to it. this is not an action item. we're not taking any action. if you like to give feedback, press 1, 0 to put yourself in the queue. first speaker. >> caller: good afternoon. i'm the executive director -- i want to thank jonathan for the presentation. at walk san francisco, we are very grateful that we serve not only the g.o. committee and the prop k. we all know, we can all see it on the city's c.i.p. that street

is doing it religiously to get the smallest place of the pie when it comes to funding. we're seeing that it ranks high. prop k funding is one of the most flexible we can get. where it stands today, street budget is only about 6% of the total prop k budget. since our seniors and people with disabilities are always 50% of our annual traffic related fatalities. we are seeing year after year that programs are woefully underfunded. i want to ask this board to encourage the agency to continue to fight for more of the prop k

funds for streets. as an advocate, we can only do so much. we need the city agency to advocate for that. thank you so much. >> chair borden: thank you. >> caller: this is david pilpel again. to follow-up on the last comment, i like to see not equal but a more equal distribution of the pie here. whether it's the discretionary amount of pie for the total amount of pie. there were lots of acronyms in the slides, towards the end. i found it difficult because the ten state good repair categories and 10 capital plan c.i.p. categories don't line up. they are different terms.

they are different things in them. it will be good if those categories were the same. i see state of good repair as a need of the agency versus enhance and expand which i see as wants. given the constraints, i would do the needs first or only at this time and then see about the wants. from all the graphics here in the slides, it looks like parking and traffic, for example, has $1.765 billion in assets with more than 50% deemed in poor condition. it's not clear to me how much of the capital plan or c.i.p. would go to parking and traffic assets due to those different categories. just using the $3.83 billion in backlog on slide 6 and $2.5 billion in investment on slide 9, 12 and 13, that seems

to be about 65% across-the-board. i would start there and apply 65% to the backlog assets, tweak that based on any funding restrictions then identify unfunded needs of roughly $1.33 billion and the additional wants. enhance and expand stuff. if i'm not understanding this correctly, somebody can correct me now or later, i can follow up with other appropriate m.t.a. staff to learn more or correct my math or understanding. thank you for listening. >> chair borden: thank you mr. pilpel. are there additional callers?

>> caller: hello. i inadvertently i was not able to make a comment on item 11. would it be possible to make comment on item 11. >> chair borden: you couldn't get through. >> caller: i wait the on the line for two and a half lines. >> chair borden: that's fine. go ahead. >> caller: good afternoon directors. we put together a bid for the potrero. our bid cost several million dollars and involved over 100 consultants. sadly our bid was rejected by muni. it is important that you understand this p.d.a. allows muni to cancel the agreement at any time with maximum payment of

$14 million. other bidders may have different terrific perspectives than we do. if they are willing to sign the p.d.a., god bless them. if they request significant changes we would ask the project to be reopened and our bid be considered again. i would note that as mandated, we carefully maximized our housing opportunities. if muni allows the select lead developer to exclude this requirement, it represents a material change from the project core objectives. in conclusion, mission housing who built thousands housing units. emerald is the only firm in san francisco that successfully done project like muni. our team includes many san francisco firms with substantial

local experience and design, construction, community outreach. we have built billions of dollars of projects in the city combined with our p3 developers. we are more than capable completing this project. if muni is unable to include this interesting, we asktor readmitted to the bidding process. thank you so much. >> chair borden: thank you. are there additional callers on the line? with that, we'll

close public comment. are there any additional comments that directors have on this topic before we close the item? seeing none. we will close this item and move on to the next one. >> clerk: this places on item 13. discussion and vote pursuant to admin code section 67.10d as to whether to invoke the attorney-client privilege and conduct closed session with legal counsel. >> chair borden: this is on public comment on us going into closed session. if you're in the queue to make a comment on this, please 1, 0 to add yourself to the queue. are there callers on the line? hello mr. pilpel.

>> caller: yes, it is. on the closed session matters, i had time since you had the long discussion about potrero. i looked up the case numbers. i don't think the second case number is correct. the purpose of the disclosure requirement and the brown act and since ordinance is that. so that members of the public can look up the cases that are referenced and figure out what they were about and whether the settlement is a good idea and make any comments that they may choose to make. if the case number isn't fully disclosed with the names of the parties and the date filed so that someone cannot look at it up, then that thwarts the purpose of that disclosure

requirement. the question that you may want to put to counsel whether the description for the second case is sufficient for you to discuss it today or if it requires another continuance. that's my concern. i have no comment on the substance of either proposed settlement. thank you for listening. >> chair borden: thank you. city attorney, would like to address the concern that mr. pilpel raised about the number, the correct number? i'm not sure if it's correct or not. >> good afternoon. this agenda has been reviewed by our office. i don't any reason to believe that it's the wrong case number. i think that we are okay to

proceed into closed session. >> chair borden: with that, please call the roll on us going into closed session. please take the motion. >> director hinze: i move we go into closed session. >> director yekutiel: i second that. >> chair borden: please call the roll. >> clerk: on the motion. [roll call vote] thank you, the motion passes. the board will now go into closed session. please click on the meeting invite. thank you. >> the board met to discuss the

city attorney and devoted item a, notitem be . item 50, motion to not disclose informationdiscussed in closed session . >> moved to not disclose. >> second . >> on that motion director heminger. [roll call vote] >> thank you,that motion passes . >> we are adjourning today. have a great evening everybody. goodbye.

dev mission's goal is aiming to train young adults, youth so we can be a wealth and disparity in underserved communities like where we are today. my name is leo sosa.

i'm the founder and executive director for devmission. we're sitting inside a computer lab where residents come and get support when they give help about how to set up an e-mail account. how to order prescriptions online. create a résumé. we are also now paying attention to provide tech support. we have collaborated with the san francisco mayor's office and the department of technology to implement a broad band network for the residents here so they can have free internet access. we have partnered with community technology networks to provide computer classes to the seniors and the residents. so this computer lab becomes a hub for the community to learn how to use technology, but that's the parents and the adults. we have been able to identify what we call a stem date.

the acronym is science technology engineering and math. kids should be exposed no matter what type of background or ethnicity or income status. that's where we actually create magic. >> something that the kids are really excited about is science and so the way that we execute that is through making slime. and as fun as it is, it's still a chemical reaction and you start to understand that with the materials that you need to make the slime. >> they love adding their little twists to everything. it's just a place for them to experiment and that's really what we want. >> i see. >> really what the excitement behind that is that you're making something. >> logs, legos, sumo box, art, drawing, computers, mine craft, and really it's just awaking

opportunity. >> keeping their attention is like one of the biggest challenges that we do have because, you know, they're kids. they always want to be doing something, be helping with something. so we just let them be themselves. we have our set of rules in place that we have that we want them to follow and live up to. and we also have our set of expectations that we want them to achieve. this is like my first year officially working with kids. and definitely i've had moments where they're not getting something. they don't really understand it and you're trying to just talk to them in a way that they can make it work teaching them in different ways how they can get the light bulb to go off and i've seen it first-hand and it makes me so happy when it does go off because it's like, wow, i helped them understand this concept. >> i love playing games and i love having fun with my friends

playing dodge ball and a lot of things that i like. it's really cool. >> they don't give you a lot of cheese to put on there, do they? you've got like a little bit left. >> we learn programming to make them work. we do computers and programming. at the bottom here, we talk to them and we press these buttons to make it go. and this is to turn it off. and this is to make it control on its own. if you press this twice, it can do any type of tricks. like you can move it like this and it moves. it actually can go like this.

>> like, wow, they're just absorbing everything. so it definitely is a wholehearted moment that i love experiencing. >> the realities right now, 5.3 latinos working in tech and about 6.7 african americans working in tech. and, of course, those tech companies are funders. so i continue to work really hard with them to close that gap and work with the san francisco unified school district so juniors and seniors come to our program, so kids come to our stem hub and be exposed to all those things. it's a big challenge. >> we have a couple of other providers here on site, but we've all just been trying to work together and let the kids move around from each department. some kids are comfortable with their admission, but if they

want to jump in with city of dreams or hunter's point, we just try to collaborate to provide the best opportunity in the community. >> devmission has provided services on westbrook. they teach you how to code. how to build their own mini robot to providing access for the youth to partnerships with adobe and sony and google and twitter. and so devmission has definitely brought access for our families to resources that our residents may or may not have been able to access in the past. >> the san francisco house and development corporation gave us the grant to implement this program. it hasn't been easy, but we have been able to see now some of the success stories of some of those kids that have been able to take the opportunity and continue to grow within their education and eventually become a very successful

citizen. >> so the computer lab, they're doing the backpacks. i don't know if you're going to be able to do the class. you still want to try? . yeah. go for it. >> we have a young man by the name of ivan mello. he came here two and a half years ago to be part of our digital arts music lab. graduating with natural, fruity loops, rhymes. all of our music lyrics are clean. he came as an intern, and now he's running the program. that just tells you, we are only creating opportunities and there's a young man by the name of eduardo ramirez. he tells the barber, what's that flyer? and he says it's a program that teaches you computers and art.

and i still remember the day he walked in there with a baseball cap, full of tattoos. nice clean hair cut. i want to learn how to use computers. graduated from the program and he wanted to work in i.t.. well, eduardo is a dreamer. right. so trying to find him a job in the tech industry was very challenging, but that didn't stop him. through the effort of the office of economic work force and the grant i reached out to a few folks i know. post mates decided to bring him on board regardless of his legal status. he ended his internship at post mates and now is at hudacity. that is the power of what technology does for young people that want to become part of the tech industry. what we've been doing, it's very innovative.

helping kids k-12, transitional age youth, families, parents, communities, understand and to be exposed to stem subjects. imagine if that mission one day can be in every affordable housing community. the opportunities that we would create and that's what i'm trying to do withit. >> shop & dine in the 49 promotes local businesses and challenges resident to do their shop & dine in the 49 within the 49 square miles of san francisco by supporting local services in the neighborhood we help san francisco remain unique successful and vibrant so we're will you shop & dine in the 49 chinatown has to be one the best unique shopping areas in san francisco that is color fulfill

and safe each vegetation and seafood and find everything in chinatown the walk shop in chinatown welcome to jason dessert i'm the fifth generation of candy in san francisco still that serves 2000 district in the chinatown in the past it was the tradition and my family was the royal chef in the pot pals that's why we learned this stuff and moved from here to have dragon candy i want people to know that is art we will explain a walk and they can't walk in and out it is different techniques from stir frying to smoking to steaming and they do show of.

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>> good morning everyone. i am mayor london breed. i want to welcome you today to talk about the election last night and the results as well as talk about today being the first day that we have lifted some restrictions as it relates to indoor masking. last night, during the race the voters sent a clear message, a clear message as it relates to the school board and the need to begin the process to refocus on our children and on what is most important in their lives and what is most important for the future of our schools in san francisco. i want to take this opportunity to thank the parents and the as