Matters. Motion to go back into open session. Second. All in favor. Aye. I make a motion we dont disclose anything we discussed in closed session. So moved. Second. All in favor. Aye. Pledge of allegiance. I pledge allegiance to th e flag of the United States of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. Please be advised use of cell phones and Electronic Devices are prohibited at this meeting. Be advised the chair may order remove from the meeting room for any person responsible for the ringing of a cell phone. Please be adviced you have three minutes to make comments unless a shorter period. Item 8. Public comment on items not listed on the agenda. Any Public Comment . Seeing none, Public Comment is closed. Ey item 9. Executive directors report. I am the executive director. My first item. I am very, very pleased moodys upgraded the port Credit Rating from aa3 to a1 in association with refunding of the bonds. I am excited about this upgrade and thankful to the finance team at the port. When we went into this refunding, i dont think anyone had in mind we would receive an upgrade from moodys. It shows the discipline which the commission has provided to staff in terms of Financial Management with our capital reserve, really carefully setting aside money to tackle the capital backlog with the voters approving prop a was into the moodys consideration that we are receiving external funding and great stable management. The port has gone through a lot of economic cycles. Because we have so many kinds of tenants, it does help the strength of the balance street. I am excited to announce the rating upgrade to reflect the hard work we have done to get there. Second item i would have to have in memorial to stephanieci ncotta. Her father started the wholesale fish company. They are wellknown for highquality seafood. She was born in San Francisco in 1928 and longterm resident. She married in 1968. They had six children. Thomas, mary ann, stefani, joseph and angela. She is the anchor of the family. A calm force. She should be commended for her very successful management of the business her father started so long ago is now run by Third Generation of the family. There is a fourth generation in training. I would like to express our condolences for her passing to family and friends. We will close the meeting in her honor. That concludes our report. Thank you. Any Public Comment on the executive directors report. Seeing none. I wish to comment. I want to congratulate staff on the Credit Rating for moodys. It is most respected in the market. That is significant that the port has achieved that. I think it has been a long term effort. To get these rating changes and increases it happens over time, not overnight. I think that we have worked together and it is a statement to what the staff has done and hopefully with direction from the commission as well. Iit is important since we do hae to raise money in the Public Market that we have a high Credit Rating and that we are able to show we can sustain and fiscally responsible. I want to make a special notation and thank elaine who started this when she was cfo and now she is the executive director and to katie and the finance staff and everybody that contributed to this. It really is a big deal. It helps in terms of cost of capital Going Forward when we try to raise money in the markets. Every basis point we save is one we can am locate to allocate to the capital plan. Thank you. I would like to thank katie for the Credit Rating. She doesnt like to hit the mic. Her mouth gets dry. Thank you both. Also, i would like, madam president , to have a moment of silence for stephanie and her family, a fourth generation doing business here and proud to be San Francisco. If we can please have a moment of silence. Thank you. Any other comments . Katie and the finance team, thank you so much. This is such an honor. The consent calendar so a request authorizes to modify 2809, pier 23 and 19 restroom upgrades. It is to extend the completion date. B request authorization to execute a memorandum of understanding to provide temporary Electrical Service for the sfpuc to provide temporary Electrical Service from building 102 to the 28acre pier 70 mixeduse project. So moved. Second. Is there any Public Comment on the consent calendar . Seeing none, Public Comment is closed. All in favor. Aye. Resolution 2005 and 2006 are approved. 11 00 a. M. Informational presentations on the fiscal year 202021 and 202122 operating budget. I am the chief financial officer. I am pleased to be here with an overview of the biennial budget for fiscal years 2020 and 202122. This focuses on the operating budget. Next is an overview of the proposed two year Capital Budget. Creating a budget is group effort. I want to begin by acknowledging tyrone and maryland for help on the real estate and maritime budgets. I would like to thank our San Francisco fellow for her excellent work on the Capital Budget and, finally, i have to offer my deepest gratitude and appreciation to margaret doyle, our budget analyst. She has really dove into this budget process with me. Her hard work, tenacity and thoroughness throughout this process has really helped us get to this point today. I am glads to the port is entering this budget cycle in a great position. We have key investments in real estate and merit time. Staff will restore facilities and staff is rising to the challenge to ensure a clean, safe, resilyet and equitable port. At the start of every budget cycle, the mayor and controller evaluate the citys financial and economic outlook. Their projections for the next two years indicate while San Franciscos economy continues to grow, the rate of that growth is slowing. Additionally, as a city we continue to face Significant Growth in personnel expenses. Given thics impact of the given the impact of the growth they ask to submit savings of 5 . A selfsupporting enterprise the port must live within projected revenues knowing mayor and controller strongly urged all departments to manage growth of expenses versus growth of revenue. Taking this advice to heart, this budget reflects the ports commitment to prudent fiscal management and economic stability by controlling expenditure growth except for key areas. It includes recommendations for new permanent positions offset by over time savings as well as programmatic positions contingent upon availability of project funding and do not count towards the citywide total. This budget seeks to support the ports growing responsibilities while continuing to allocate resources to address our continuing port capital backlog. The proposed operating and Capital Budgets are integral to implements the ports Strategic Plan. Funding over the next two fiscal years aligns with delivery. This supports the seven goals. Initiatives highlighted include support for parks and open space along and evolving waterfront, funding to continue the work of waterfront resilience. Staffing to advance racial and social equity, funding for Capital Projects to support the maritime and real estate lines of business. Under stability funding that exceeds the ports policy to invest 25 of our operating revenue and capital. I want to note between direct Capital Investment and designation of net revenues to capital the port is investing 57 of its operating revenue in two capital in the next two fiscal years. This budget meets setting aside a 15 operating reserve. The port faces a number of opportunities and challenges in the next two fiscal years including implementation of the pier rehabilitation program, continuing to support Waterfront Development at pier 70 and mission rock, continuing to develop piers 80 to 96 to revitalize maritime assets, advancing carbon reduction to support climate change, planning for the future in the Waterfront Resilience Program and supporting improved trap transportation in the city. Capital backlog of 1. 7 million. The secondary cruise terminal is capped at 15 calls flattening growth until we can deliver a secondary clean power source for the cruise shore. Pier 70 shipyard is under used. We must activate that space. We must provide a clean healthy and safe embarcadero that requires more security and environmental stewardship. The budget is estimated to grow from 159 million in the current fiscal year to 194 million next year through combination of ongoing and onetime revenue. Staff projects the second year of the two year budget will drop to 170 million with the loss of onetime sources and reduced use of fund balance. Operating revenues will support twothirds of the port budget in the next two fiscal years. Half of the operating revenues are from commercial rent. 17 of budgeted revenue is from parking. Approximately 23 from maritime sources including cargo, cruise Harbor Services and fishing. Our operating revenues continue to grow with the projected increase of 14. 4 million between the current fiscal year and fy2122. This growth is driven by increases in commercial and industrial rents especially from new leasing opportunities as well as by strong growth in the maritime portfolio including cruise and cargo. This is offset by reductions in parking revenue. Parking lots are turned over for development and as citation revenue from parking meters drops due to the fact the public has a variety of ways to increase the Time Available on a parking meter and pay for the parking meter. Staff projects operating expenses will increase in the next two fiscal years with growth in salary and Fringe Benefits, work orders from services from other departments. An additional investment in equipment, among other expenses. This budget includes Capital Investments including 52 million in project and 26. 7 million in fiscal year 2122. As i noted earlier. This also meets the Commission Policy mandates 15 operating reserve and 25 designation to capital from operating revenue. The operating expenses are driven by our most important asset our staff. 50 of the budget in the next two years supports salary and benefits for staff. Next largest slice of the budget Inter Department mental work orders, City Attorney and funding for parking meter maintenance and collection. It including funds materials and supplies and professional services as well as security and custodial work. Debt service and equipment are the other two major categories in our budget. This chart provides a quick look at the drivers of growth in the port budget in the next two fiscal years. Salary and Fringe Benefits are increasing due to collectively bargained wage increases as well as increases to retirement and healthcare costs and due to the addition of 11 new positions, which is offset in part by reduction in overtime. Work orders are increasing as we must pay for for insurance premium, Fund AdditionalCity Attorney time, send more funding to sfpd for screws security. We have 22 more cruise calls next year as well as to increase funding to the Public Utilities commission for shore side power. We are seeing growth in other current expenses and are proposing to invest a little more in equipment in the next two fiscal years. I am very excited to note on this slide that these increases are partially offset by an estimated 800,000 in annual debt service due to the 2010 revenue bond refunding. To meet the organizations strategic needs, support mayors priorities and address policy challenges the port proposes new 11 new positions in this budget. 10 f. T. E. In maintenance and one additional position to support the port work to advance racial and social equity which i will describe in the following slides. It includes a variety every assignments to meet changing needs and adds 11 project funded positions to support waterfron waterfronts, Development Projects maintenance of the park and it initiatives. These are all time limited, will be funded by projects and do not add to the ports overall position count. To support the citywide goal of clean and staff streets it includes adding a swing shift to the Street Environmental Services in maintenance division. It will ensure seven day a week cleaning of embarcadero from pier 40 to Fishermans Wharf and allow maintenance in quite times to help staff to be more thorough and reefficient. It will also allow a day shift laborers to concentrate on southern waterfronts and includes a new supervisor for the gardening staff. As we continue to add open space along the port, the park which is seven acres which will open in this calendar year, these spaces must be maintained to make them welcoming, invite youth and meet the mayors goal of vibrant neighborhoods. To support Data Collection and reporting and improve Capital Planning, the budget funds implementation of a new Asset Management system. In support of the ports goal of evolution, equity and sustainabilities and the citywide goal of sponsors healthy neighborhoods, this budget supports development on the waterfronts including the mission rock appear 70 pier 70 projects and includes new project funded maintenance resources for the park, the cost of which will be partially off set by a new cfd over the development. To support the ports strategic goal of equity and meet the mayors goal to provide an inconclusive city. It includes an analyst position for the new social responsibility unit in external affairs. It will be working on a variety of projects and initiatives in the next two years including in contracting, Work Force Development and creep ating creating a race equity plan that was approved by the board of supervisors and mayor in 2019. It funds engagement by waterfront resilience. Funding the planning to engage the community to envision the water front 80 years from now. Finally, by carefully controlling the ports operating expenses and focusing resources on key operating investments, this biennial budget supports the strategic goal of stability. In the next two years they will invest over 106 million in capital including direct Capital Investment and designation to capital through net operating revenue. This investment will address key life safety and state of good repair needs, helping to reduce ports backlog of deferred maintenance and supPort Investments to produce additional revenue over time. We are deep into this budget process. Under the charter, the budgets are due to the Mayors Office on february 21st. Staff will return to the Port Commission for the final approval at the february 25th meeting. If the commission has changes to the budget at its meeting on the 25th. We will work to reflect these changes in the budget system. We will then spend march and april engaging with the Mayors Office, answering questions, providing analysis and making changes. On may 1st, the mayor will submit the port budget along with those of the other agencies to the board of supervisors. The board will hold hearings in may and will take action on the budget in july. This concludes my presentation. I am happy to answer what i am sure will be a number of questions. Thank you. Is there any Public Comment on this item . Seeing none, Public Comment is closed. Thank you, katie. As you know, we had a briefing already on the budget. I am not going to give you detail questions. I want to highlight one thing which we talked about. That we carry about 150 some Million Dollars in investment balances that are managed by the city Treasures Office. I want to make a notation. I would ask the executive board as Enterprise Agency we have no representation on the se the Investment Committee. On the 1. 5 return which is what we have seen, i would ask that executive request that we do have some representation on the Investment Committee of the city Treasures Office so our money that we noted as being managed, im sure very well. We would have some input to that return for every basis point that we could increase that return given we will hear on the capital side how important that is to generate as much money as we can. This is one of the areas that would not take that much effort to improve the return on those funds. That is my comment for the budget. Thank you. Thank you for the private brieferring. I want to make sure the new personnel is the number that is right for us to operate for the coming year and to look forward to the second and third year because the hiring process is a slow pro