Good morning.

The meeting will come to order.

Welcome to the July 31st, 2024 meeting of the Budget and Finance Committee.

I'm Supervisor Connie Chan, Chair of the Committee.

I'm joined by Vice Chair Rafaya Mendelman, and shortly by Supervisor Miranda Malgar.

Our clerk is Brent Haliba.

I would like to thank Corwin Cooley from SFGov TV for broadcasting this meeting.

Mr.

Clerk, do you have any announcements?

Yes, Madam Chair, just a friendly reminder to those in attendance to please make sure to silence all cell phones and electronic devices to prevent interruptions to our proceedings.

Should you have any documents to be included as part of the file, this should be submitted to myself, the clerk.

Public comment will be taken on each item on this agenda when your item of interest comes up and public comment is called.

Please line up to speak on the west side of the chamber to your right, my left along those curtains.

And while not required to provide public comment, we do invite you to fill out a comment card and leave them on the tray by the television to your left by the doors.

If you wish to be accurately recorded for the minutes, alternatively, you may submit public comment in writing in either of the following ways.

Email them to myself, the budget and finance committee clerk at B R E N T dot J A L I P A Hat S F G O V dot or G.

If you submit public comment via email, it will be forwarded to the supervisors and also included as part of the official file.

You may also send your written comments via U.S.

Postal Service or Office at City Hall.

At one Dr.

Carlton B.

Goodlit Place, Room 244, San Francisco, California 94102.

And finally, Madam Chair, items acted upon today are expected to appear on the Board of Supervisors agenda following our summer legislative recess of September 3rd, unless otherwise stated.

Madam Chair.

Thank you, Mr.

Clark.

Uh September 3rd it is.

And so before we call the items on the agenda, I just want to remind the public that for the items that have but budget and legislative analyst report, we will have department presentation, then go we directly go to the budget and legislative analysts, and then we'll have questions and comments, and then we will go to public comments.

So with that, Mr.

Clerk, please call item number one.

Yes, item number one has an ordinance authorizing the execution and delivery of certificates of participation on a tax exempt or taxable basis, evidencing and representing an aggregate principal amount of not to exceed 29 million to fund all hoary portion of the acquisition of the concourse garage, authorizing the issuance of commercial paper notes in advance of the delivery of the certificates, approving the form of trust agreement between the city and county and the trustee, including certain indemnities, authorizing the selection of the trustee by the director of public uh finance, approving respective forms of a property lease and a lease agreement, each between the city and county and the trustee for the lease and lease back of certain property and facilities of the city, approving the forms of purchase contract, official notice of sale, and notice of intention to sell certificates, directing the publication of the notice of intention to sell certificates, approving the form of uh approving the form of the preliminary official statement and the form of and execution of the official statement relating to the sale of the certificates, approving the form of the continuing disclosure certificate, granting general authority to city officials to take necessary actions in connection with the authorization, execution, sale and delivery of the certificates, including termination of the ground lease and transfer of the concourse garage property and related property to the city and county under the jurisdiction of the recreation and park commission, approving modifications to documents and agreements, declaring the city's intent to reimburse certain expenditures and ratifying previous actions taken in connection therewith.

Madam Chair.

Thank you, Mr.

Clerk.

And today we have Wreck and Park here.

Thank you, Supervisors.

Uh Director of Administration and Finance for the Recreation and Park Department, Antonio Guerra, and also with me to here today is Grant Carson from the controller's office of public finance.

We'll be splitting this presentation.

And we also have a representative from SFMTA for any specific questions about garage management.

Well, background about the garage.

The music concourse garage is an 800-space underground parking facility located at Golden Gate Park, serving visitors and institutions such as the Academy of Sciences, the DeYoung Museum, and the Gardens of Golden Gate Park.

And this was authorized in June 1988 by Proposition J, where land was set aside for the garage and allowed a ground lease of the land to the Music Concourse Community Partnership, also known as MCCP, a private nonprofit so that MCCP could construct and operate the garage.

And in November of 2022, voters approved proposition N, which authorized the city to use public funds to acquire and operate the garage.

The operating plan for the garage itself.

And to talk about the financing structure, here's Grant Carson from the controller's office of public finance.

Thank you, Antonio.

Good morning, supervisors.

As Antonio said, the proposed ordinance would also authorize the issuance of up to $29 million in certificates of participation or COPs.

These COPs would be issued to repay the existing construction debt owed to First Republic Bank, which originally financed the garage.

Under the terms of the existing ground lease, ownership of the garage will transfer to rec parks when the initial construction debt is repaid.

The existing construction debt currently has 21.6 million in outstanding principal and accrued interest to be repaid.

It also has a 1.1 million debt service reserve fund, which will be contributed to help downsize the issuance.

As part of the issuance, other subordinate debt owed to the DeYoung and Cal Academy museums will be repaid $825,000 each or $1.65 million total.

$500,000 of COP proceeds will be used to assist with repayment of the subordinate debt, with the remainder being paid from MCCP's funds on hand.

We have the not to exceed sources and uses shown here, which aligns with the supplemental appropriation ordinance ordinance, which was introduced yesterday.

We have total sources of $30.1 million comprised of the $29 million and not to exceed PAR amounts and $1.1 million prior reserve.

Below in uses, we have the $21.6 million payoff of the first republic loan, $500,000 for the subordinate museum loan payoff, $3.5 million not to exceed appropriated for capitalized interest and a debt service reserve fund if necessary, delivery data expenses at $1.05, $1.05 million for cost of issuance, $240,000 for underwriters discount.

Then, as we have on prior COP and bond authorizations, we've built an additional cushion into the NTE par amounts in the form of a reserve for market uncertainty, just to ensure we have sufficient capacity under the authorization to issue in case there's uh something like an interest rate increase.

In this case, including that 3.26 million market uncertainty reserve, our total sources equals our total uses or total sources equals the total uses of 30.1 million.

Uh then here for the estimated financing terms for the transaction as provided by municipal advisor, NHA and NHA advisors in their good faith estimate.