202-03) in the amount of $8,450,894 to fund the pier 27 mixed use cruise terminal project. supervisor chu: thank you. we have elaine forbes from the port on this item. >> good morning, members of the committee. the item before you is a release of reserves from a 2003 watermark planned sale proceeds. the total amount of the reserve is $8,450,494. as you know last night, the board of supervisors of how the planning commission certification of the eir. now this committee can move on the release of this research. given that there are several items come before you in the near term related to this project, i wanted to give you an update on the project, sources and uses, what you can expect before the end of this fiscal year. if i could go to the overhead.

i know in the eir and conversation last night, from fiscal feasibility, you are aware of the project, but just to go over, this is the existing site condition. pier 27 serves as a secondary cruise terminal no amenities for the public. pier 29 has several storage space tenants and some office space uses. the proposed project is not only a cruise terminal, but also 1.5-acre plaza. the northeast wharf project fisa, which has been contemplated in our waterfront land use plan for a long time. that is the green space you see on the far right side. there is an 80,000 square foot two-story cruise terminal building that will meet the standards for efficient and safe

passenger movement and will also serve as a safe and events facility. the demolition will also clear the way for a very large tip for access for the day, and also positioning for the cruise terminal. the timing, march 2013. the event authority will have exclusive use of this facility from the beginning and end of the race, from march 2013, and will return the facility to us april 2014. an assistant -- consistent with the mmrp, we will be hooking up offshore power. we will then complete the maritime skindell by october 2014. -- schedule by october 2014. the project has a shortfall in phase two. i am happy to report the shortfall has been reduced $4.7 million since you review the project. we have shifted costs from phase one to phase two related

to design a we need to do now. city costs have decreased by assuming the cost of the pier 27 shed demolition in the amount of $800,000, which used to be at the requirement given authority. we assume these costs because it allowed us to have some control and to deliver the project on time for the march 2013 date. i would have preferred to have brought to you from the beginning a fully financed project and also not to have so many actions necessary to release the funds, but this is a difficult project because the benefits of the project appears -- accrue to the local economy. for the port, it is not a huge cash generator. it is also difficult because of the integration with the america's cup, dealing with the project scope. i apologize we are coming in pieces for the appropriations.

if you will look to this chart, you can see we currently have $35.1 million appropriated. the subject of the release is in yellow, the 8.45. in february, we will be proposing a supplementary appropriation ordinance which is already gone to the capital planning committee, for a total of $5.2 million. this will a corporate fund balance of existing in the ports of accounts, and will be purpose 2010 debt for the project. these protests -- proceeds will be repaid if the bond is successful in 2012. then we are working with the office of public finance, the comptroller's office, mayor's budget office, on our 155 additional contribution to the project. it has been long assumed we would issue debt for $15.5 million. the vehicle has been what we are working on. the mayor's office of public

finance and the controller have agreed we will use a crp, which the port harbor fund will be paid. we will be seeing that transaction in april or may. project proceeds in june. then there is the city contribution of $6.5 million. we are in conversation with the mayor's budget office, and it will be a decision for this committee whether that is a cash contribution. he won the the proceeds in the beginning of the new fiscal year. these are the total sources and timing. we are happy to report we have a complete picture here to deliver phase one. the face to product cost of $30.8 million, we are short on identified sources at this time, at $6.9 million. but we do have a number of potential sources, and i will

say, the fema grant, operator contribution and passenger facility charges of well within our grasp. we are just working out the details of the passenger facility charge. several ports have utilized this is a way to pay the capital improvements. for the 2012 geode bonn, we have been working with rec and park. should the voters not approve that, should a question not be posed, we would be seeking a different funding source for the park plaza, so the park would go on improve until we found funding for the plaza. so it would not be in trickled to the operations of the cruise facility. supervisor avalos: thank you for the presentation. on the top slide, on page 3, you have planned city conditions. $15.5 million financed through

clp's. what other revenue sources did you look at? >> it would report revenue debt. we had assumed that. frankly, the city has a better credit rating. it is cheaper for us if we use that to repay the debt. that is primarily why the clp vehicle is preferred. >> on the city contribution, what is the deliberation there, in terms of financing? >> deliberation is whether the city wants an ongoing obligation related to the $6.5 million contribution, or would prefer to use cash as the city's contribution. it is really a matter of this committee whether they want to take on an ongoing obligation. the controller is in devising the mayor's office on expert -- preferred path. we will have a vehicle, because we are doing a clp, we are putting a vehicle in place for

that decision if it was that. >> if it were not cash, could that be recommended again? >> yes, we would combine the 16.5 and 2.5 for a new issuance. part of which the harbor from would repay, part of which the city would repay. supervisor chu: related to the financing, i know some time ago, we had always seen this number, 6.5. it is not a new number. we always have questions about how we would eventually do this, how the number would change. i know the project has come down by $4.7 million. why hasn't our general fund contribution gone down by the same level? >> with the project's cost coming down we just reduced cash -- a shortfall to phase two. before we had a feasibility study of $12.2 million in the shortfall. supervisor chu: if the 4.7 reduce cost was not fair, we

would see the shortfall of the 6.9 be more like 10-something? >> that is right. if you would but, i could go over potential sources to phase two. we have a list of sources that we are successful to getting ab64 passed last year in the legislature. but that gives us the ability to capture the state share of -- associated with the america's cup i ftp with a total body of that, that present valley is about $8.9 million. that is a good potential source to the face to shortfall. we are also looking at several different opportunities. we have enough time and sources identified that i'm confident we will be -- have a complete plan for phase two of the project. supervisor avalos: you do not anticipate a lot of competition for the source of funding? >> it has three intended uses,

the cruise terminal project, shore power, and a 20% allocation for parks and open space. i am basing my number on 80%. the competition would be between the cruise terminal and short power -- for power. -- shore power. supervisor chu: with their options to close the $6.9 million shortfall, these are fairly large numbers and would more than cover the 6.9. do we have any sense of how feasible, which ones are long shots? >> ab 64 is not a long shot, it is a good source. we do need to make a financial test to meet a financial test with the california infrastructure financing bank which basically shows the tax benefits of the state of the

america's cup event is more than the up to $1 million in shares that we would captured through the ifd. the reports that the comptroller's office did, their economic show the america's cup event would far exceed its $8.9 million. i feel that we can meet that test. it is a very good source. for the future revenue opportunities, we have been working on our business plan for the cruise terminal, and how much we can expect to earn from special events. this site is a special event then you. without impacting our cruz operation, i think $5 million annually worth of debt is a very conservative estimate. that would mean basically five other thousand dollars more in annual net revenue from this facility -- $500,000 more in annual net revenue from this facility. i think that is a good source. new funding sources, we have not

made much headway on that, in terms of additional grants. reallocating funds from other capital projects, that is how we close the phase one gap. our capital repair and replace the budget is so oversubscribed, it is something we can do, but it has a cost to the port in terms of opportunity to repair our assets. the benefit of the positive bit environment -- in phase one, we are seeing the bids come in very close to the engineering estimates, which we are pleased about, but i think they have done a good job in understanding the bidding environment. by the time we build phase two, that may not be there in the same way. that is a softer source. then we can always defer the improvements. that is something we would have to face if these other sources do not come into focus for us. supervisor chu: on your face to component, there is that $9 million from the 2012 go bond

anticipated. if that were not to go forward, if not approved by voters, you would assume we would hold off on the recreational open space improvements? >> that is right. we would immediately seek other forces -- sources of funding for the park plaza. it is an important amenity that the cruise terminal has the entrance, being a park plaza, for the public enjoyment. the cruise terminal not only serves the passenger facility to generate economic benefit, welcome visitors, but also is a public amenities, because there will be the open space improvement on the tip, which we think is important. that said, if the question is not opposed to the voters, bond measure not passed, we would have to find funding and park improvements would wait until that funding was secured. supervisor chu: you talked about this in terms of the project cost coming in, where the cost

estimates were. we saw the cost of the project went down by $4.7 million. do we anticipate any other opportunities to reduce the cost to the project? >> at this point, no. >supervisor chu: in terms of the city contribution, this is something i still have questions on. 6.5 is not a little number. then again, we have seen this before. supervisor at the los talked about different financing methods, whether we pay that in cash or we will live up somehow. going back to the question about the 4.7 in reduced cost, what the court did was ruled that into reducing the shortfall in phase two. given what we know, in terms of some of the options for financing the shortfall, knowing that some of these options are good sources, conservative sources, that exceeds the 6.9. is there opportunity to reduce that contribution level? >> unfortunately, the cash

needed now for phase one and costs are certain. the phase two sources are not in place at this point. so there is no way for me to say yes to that question at this point. the reduction in the project cost was overwhelmingly driven by a reduction in the cost to demolition, which used to be on the event authority's ledger. when the port assumed those costs, it was a much lower estimate then we have assumed for the that authority. the overall picture of phase one changed their little. the cost over all is lower on the project, and the event a party is not contributing to the demolition of shore power, building. supervisor chu: i understand for phase two there is no way be can expect passenger facility charges, for example, because we do not have the cruise terminal up. i understand there is a matter of timing for different resources for funding.

i understand we need to work on moving forward with pier 27 quickly. the question is, if it is a matter of up front loading of cost, expenses for the city, do we have an opportunity to reevaluate how things get paid for past phase one of the project? >> yes, i think we have an opportunity to really with the payment sources. if the city were to issue debt with the port in a cop, we could look to other sources of payment in the general fund, should these other sources come in, become certain. supervisor chu: thank you. if there are no questions from the committee, why don't we go to the budget analyst's report. >> on page 4 of our report, we report the phase one budget of the pier 27 cruise terminal project is $62 million. that is shown in the attachment

on page 7 of our report. table to on page five of our report provides details of the funding sources for this phase one, including the subject requested $8,450,000, which was previously placed on reserve by the board of supervisors. on page five, we point out, as shown in table 2, if the board doesn't approve 9,000,500 to $4,457, that would include the release of reserve of $8 million as well as $603,000 in interest earnings. i believe that was approved by the board yesterday. then the board of supervisors would have appropriated $33 million. that is about 53.1% of the phase one budget of $62.3 million for the pier 27 cruise terminal

project. we recommend you approve the request and release of the $8 million. the reserve by the board of supervisors. whereas a recommendation now shows your final determination pending the final appeal, you have already done that yesterday at the full board. we have an unqualified recommendation to release the reserve funds. supervisor chu: thank you. when we open this up for public comment. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. supervisor avalos: motion to release. supervisor chu: motion to release those reserves. second. without objection. item for. >> item 4. ordinance re-appropriating $1,846,265 of general fund reserves for state revenue loss to backfill federal funding reductions to hiv/aids programs at the department of public health in fy2011-2012.

supervisor chu: we have a representative from the department of public health. for your presentation, can i asked julian from supervisor wiener's office to read a statement? i believe the supervisor wanted to be here but has a conflict with an mtc meeting he is attending. >> thank you. colleagues, i am currently at a meeting of the mtc in oakland and am disappointed i cannot bear personally to advocate for this funding. today, the committee is considering a critical and life- saving supplemental that continues and identifies those living with hiv aids. this appropriation will prevent an almost immediate reduction of services resulting from federal grant from the care act of funding. i asked the committee to support this legislation and i want to thank mayor lee and supervisor campos and a lot de for their

work. sandridge cisco has fought this disease for 35 years, sometimes alone, back in the day when we had a president who refused to say the words hiv aids. over time, our government began to the knowledge the disease and supports to fight it. even with state and federal support, our city has always stepped up to ensure sentences to was to get part to insure critical services for residents ascent -- affected by hiv aids. given the destructive budget bigger in sacramento and washington in recent years, we need to be even more self- reliant. one of the most import sources of funding for hiv aids services is the ryan white care act. things two-hour ravenna's and hero nancy pelosi, our funding remained intact for two years. leader policy carried unending wanted to maintain the funding long past when any other normal official would have been able to do so. but funding cuts have now come

and we have to respond to it. in the current fiscal year through june 30, we will lose approximately $1.8 million in ryan white funding. the appropriation before you would bechtel that amount from our state federal reserve accounts and would allow us to continue funding lifesaving services. next fiscal year we anticipate a cut of 4.2 $5 million. yesterday, i called for a hearing to discuss how to approach this devastating reduction in federal funding. i know we will all work are to address it and to fulfill our obligation to those living with and at risk for hiv aids. thank you, and i ask for your support. >supervisor chu: thank you for your statement. why don't go to the department. >> thank you. greg white appeared department of public health. thank you for considering this item. as you know, our ryan white funding of about $25 million per year, we were recently informed that we would take a reduction

in our funding effective march 1, 2012. that funding is primarily the stop loss portion of the funding. it is equivalent to about $4.2 million to the city. the appropriation before you is a level of funding sufficient to replace that lost funding through the end of the fiscal year. the thought process here is that we are on a very tight timeline. notification of the loss of funding was received by the city within the last couple of months. that does not leave us much time to react and respond. the hope here is to be able to appropriate money to get us through the end of the year. then there is a larger policy questions, discussion to be had with the mayor and board of supervisors about the way things

look, going forward, that can happen as part of the budget deliberations and in the context of your other decision. this funding would allow us to remain all through the end of the fiscal year and to keep those services intact. the budget analyst has looked at our initial legislation that was submitted and made some recommendations. we agree with those recommendations, and thanks to the budget analyst for identifying that correction. the amendment proposed in the budget analyst report is -- again, we agree with that, will be sufficient to keep us at the level of funding we are currently at through the end of the fiscal year. happy to answer any questions. supervisor chu: questions about any federal maintenance of effort impact on this allocation. the federal government often makes us maintain a certain level of funding for certain projects in order to receive any new funding. how would this be considered? would we be able to meet the

maintenance of efforts requirements simple because our budget for the department of public health will go up by that much anyhow? could you explain that? >> very good question. that has been a question surrounding this. as you know, the stop-loss funding has been in jeopardy in several occasions in the past. occasionally, the funding has been protected, but each time we face the question, and amendment of the effort issue has come up. in the past, the way the maintenance of effort formula was calculated was based on our level of general fund contribution to these services. an increase in our general fund appropriation, assuming there was an ongoing increase, would have increased our maintenance of effort requirement. as of a couple of years ago, there was a change in how the maintenance of effort for the is

calculated. set of criteria that we used to determine our level of maintenance effort. that calculation will remain stable. the level of general fund appropriation in and of itself does not increase our maintenance of effort requirement. we are now allowed, after the change in how the threshold is calculated, to make an additional appropriation without resetting the base line. our base line will remain at the level that is currently and any level agreed to by the county and federal government. supervisor chu: thank you. let's go to the budget analyst report. >> members of the committee, on page 3 of our report, we state we estimate the reduction in the requested -- in the federal ryan grant funds for the four-month period, requested from march 12001 -- 2011 -- therefore, we recommend you

amend the proposed ordinance to reduce the appropriation by $272,138. to our record amount of 152472. you propose the ordnance as recommended. supervisor chu: i know many of us are aware of the portfolio services provided through these programs. for the public identification, what would this $1.5 million due from the period of march through june? what would it be for? >> a chevy health services. basically, it would prevent us from having to implement quickly andcut across the board0 of our providers, with no additional intent. >> -- supervisor chu: great.

what kind of services are provided? >> primary medical care, support services that would include anything? benefits to hospice care, etc.. supervisor chu: does it include hospice services? >> there is a medical case management connected to housing, but it is separate. supervisor chu: thank you. let's item that some -- let's open this item to public comment. we have three spiked -- three speaker cards. [reads names] >> hello, my name is mike smith. i am the president of the hiv aids provider's network, the consortium of nonprofit agencies that provide services to people with aids in san francisco. i would like to thank the mayor and the supervisors for moving

forward with this so quickly. as the department has stated, based on the new numbers from mr. rose, these funds are very necessary and will allow us to maintain safety net services for people with hiv for an interim as we work collaborative the with the city to look at what to do over a longer period of time. without stepping out on behalf of the city -- without the stepping up on the behalf of the city, we would be looking at a variety of cuts to a number of programs that the city takes great pride in presenting. it would be very disruptive to just cut those back for four months, if there is no longer term solution in the new year. staff would be laid off and changes would take effect that would be hard to reinstate when there might be opportunity for a longer-term solution.

be very much appreciate the support on this motion. supervisor chu: next speaker, please. >> hello. my name is lee jewel. i am one of the cochairs on the hiv council. i am also a person with hiv. i have an aids diagnosis. i rely on these care services. i know how important they are two members of our community who are most at need of these services. i hope that you will support this amendment. we do understand that this city is facing very hard times. the economy is bad across the country. we have continued to face reductions in our grants, year after year. this would be a substantial blow to us. we look forward to your supporting our amendment. supervisor chu: thank you. next speaker.