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tv   [untitled]    May 18, 2011 10:00am-10:30am PDT

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captioned by the national captioning institute supervisor chu: hello, and welcome to the regular meeting of the budget and finance
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committee. we will be joined shortly by supervisor chiu. our klerk today is mr. victor young. mr. young, do we have any announcements today? >> yes, please turn off all cell phones. if you wish to speak during public comment, please submit a speaker card to myself. items that the upon today will appear in the board of supervisors agenda on may 24 unless otherwise stated. supervisor chu: thank you very much. today we have our first day of budget hearings for the enterprise department. we will be hearing the permanent appeals for the national airport. before we begin with that, we have a number of items in the regular agenda that are ongoing items to dispense with. please call items #1 and 2.
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>> item #one. resolution approving amendment no. 1, retroactive to april 14, 2011, to domestic terminal food and beverage lease no. 03-0192 with j. avery enterprises dba klein's deli, and the city and county of san francisco, acting by and through its airport commission. item #two. resolution approving the lease agreement for operation and maintenance of public wireless- fidelity system at san francisco international airport between advanced wireless group, llc and the city and county of san francisco, acting by and through its airport commission. supervisor chu: thank you very much. we have [unintelligible] from the airport. >> good morning. the airport is seeking your approval for amendment no. 1 to our existing lease with j enterprises. they have six years left on their current lease to operate
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two concessions in terminals 1 and 3. due to appear closure in boarding area ee and the construction going on with american moving into terminal t2, they would like to amend the closing of their existing locations in order to consolidate into one expanded location in terminal 3. the amendment before you is to accommodate the new 10 year term and expansion of the deli in terminal 3. it would amend the rent to reflect increased square footage and allow for a suspension of the rent while clients are unable to operate. the airport is also seeking approval to reimburse the
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amortized cost put into the current bases that will now be unusable for a little while. the existing lease pays the airport a minimal guarantee of $66,000. you often see that on the beverage leases. whichever is greater. it is based on gross revenue. it would double everything to $112,000 per year. the budget analyst who has recommended approval, i would be happy to answer any questions you might have. supervisor chu: item number one. >> as indicated, the minimum annual guaranteed for the proposed lease would go up approximately 100% to
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$112,000.731 -- $112,731. there would be no rent for the period that the runner -- renovations are taking place, as well as repayment for the un- advertised cost of improvement. this will not have a direct impact on the airport's budget. as you know they operate under the break-even policy. >> thank you, commissioner. let's go to public comment on item number one. seeing no one, public comment is closed. can we take this item without objection? we have a motion to send this forward with recommendations. item number two?
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>> members of the committee, item #2 is approval of a new lease with the airport between the city and county and the advanced wireless group to provide free wire -- free wireless service. proposing an existing lease that will be replaced by the competitive proposal process. we have had a deal to provide internet access with passengers since 2003. initially it was a pay for service modeled. t-mobil paid a guarantee of $60,000 in the first year, then increasing the $125,000 per year in subsequent years. in august of 2010, the airport amended its release in order to switch to a free access model.
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in which case the airport began to pay between $135,000.100 $25,000 per month to provide at that point what we have heard from passengers have become an expected customer service in airport. this will formally set whitefly availability into place. the new contract is for the initial two years with three one-year options. under the contract, they would pay the airport $300.5000 in the first year of the contract. should the airport exercise the additional option, the annual guaranteed would increase by $100.5000 per year. i can answer any questions that you have. supervisor kim: a was wondering,
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how was the decision made to provide free why fly? >> we started looking at expanding a few years ago when the city was contemplating providing free internet service city-wide. at that point we were under contract with t-global under a pay to use service. we kept that contract in place until it could be modified to be changed. at that point it had become increasingly obvious that passengers expected to be able to access internet for free at the airport. it showed up a lot in the common cards. we did switch the contract at that point and it seemed very thoughtful. supervisor kim: this does not include domestic? >> no, it is airport wide.
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and the rental car center. supervisor kim: have we thought about providing wifi on our own in the airports? >> i know that that was part of the decision leading up to putting up the new rfp, but i do not think it made financial sense. supervisor kim: the advertising, i could not really understand the report in terms of the advertising. what does that mean, that the airport could also do the advertising? >> as a part of their advertising contract with us, they are allowed to advertise on site. there are many restrictions in terms of the size, it can only be on the opening page. there is a component of the contract that would allow the
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airport to also, at some point, sell its own advertising and realize the revenue on the internet opening page, but at this point we do not have any plans to do that. supervisor chu: thank you. supervisor mirkarimi: a quick question, is it completely free to the customers? or is there any kind of charge at all? i know that some airports require $9.95. or you are supposed to go through a service provider. >> this would be completely free. similar to -- i keep using sfgate as a model., they have an advertisement that you can go through. but there is no charge. supervisor chu: let's go to the budget analyst report.
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>> if you approve this lease, the airport will receive about $1,375,000 over five years. this appears to be an excellent deal that the airport has obtained. with t-mobile, the airport was paying? to provide the free white 5 service -- wifi service. now the airport will be receiving revenues. advanced wireless will be offered -- authorized to advertise on the opening web page. that is where they would get their revenue from. overall we think that this is an
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excellent deal, as i stated. and we certainly recommend approval of this resolution. supervisor chu: let's open this up for public comment. seeing no one, public comment is closed. supervisor mirkarimi: motion to accept the deal with recommendation and no that it is rare that a budget analyst uses the word excellent. [laughter] supervisor chu: by notice that also. can we do that without objection? thank you. item number three, please. >> item #3. ordinance appropriating $31,055,000, including $8,104,000 of general fund reserve, $14,851,000 of surplus laguna honda hospital revenues, $1,925,000 of surplus san francisco general hospital revenues, de-appropriating $6,175,000 of non-hospital operations expenditures at san francisco general hospital to fund cost overruns in the department of public health including $20,334,000 at san francisco general hospital and
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$10,721,000 at laguna honda hospital for fy2010-2011. supervisor chu: thank you. >> i think that those of you being with us over the years passed, the health department, it is not uncommon or unusual to wind up with expenditures for salaries that are that appropriated in the budget. there has been a long history of structures -- structural shortfalls in the budget associated with the attrition savings we are not able to realize in a 24/7 setting along
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with pharmaceutical expenditures. in years past, we have also generated sufficient surplus revenues for 100% of our additional appropriations. this is the first year we find that we are unable to do that. we found that we had a situation with one of our revenue sources this year associated with a hospital fee that through state legislation has been significantly reduced and other changes have brought it in significantly short of what was originally budgeted. we do need some funding from the state hospital reserve, from the state budget cut reserve to fund a portion of the supplement. you had a report from the budget analyst.
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there were recommendations that we agree with. i am certainly available to answer questions you might have. supervisor chu: i understand you are in agreement to reduce the supplemental? >> yes. >> as indicated, we analyze projections and our recommendation is to reduce by $1,560,187. our recommendation is displayed on page 8 of the report, where we recommend that any proposed more -- ordinance, that that be the reduction and because this appropriation does contain general