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Subcommittee forwards certificates of participation for Pier 27 cruise terminal; port to cover most cost increases
Summary
The subcommittee moved forward ordinances authorizing certificates of participation and appropriations to finance the Pier 27 cruise terminal, shore-power and America's Cup infrastructure; Port and controller's staff said the Port would absorb project increases and use retained rents and port capital to meet shortfalls, though budget analyst noted a remaining $6.5 million of unfunded Phase 1 needs.
The Budget and Finance Subcommittee heard presentations from the Controller’s public finance office and the Port of San Francisco on a financing package that would use certificates of participation (COPs), reallocated port funds and other sources to fund the Pier 27 cruise terminal, shore power and America's Cup-related infrastructure.
Nadia Saseig of the Controller’s Office described a plan to issue up to $45 million in COP proceeds and to use a lease-leaseback structure with certain city assets as part of the transaction. She said the city would use available interim commercial paper and later take out the short-term borrowing with bonds and that trustees and sale methods (competitive or negotiated) would be determined based on market conditions.
Elaine Forbes, Port CFO, explained project scope and funding: the Port expects to use retained rents (about $3.9 million annually) and port capital to cover increases, and she listed principal project costs including a roughly $23.8 million phase 1 for the cruise terminal and shore-power work. Forbes said construction is already underway and that with the proposed financing the Port would be about $5.7 million shy of fully financing Phase 1; the mayor's office intends to include $4.9 million of general fund monies and other contributions in the mayor's FY 2012/13 port budget to close remaining gaps.
The budget analyst reported cost increases and estimated debt service for the COPs; he recommended approval consistent with prior policy approvals and said the Port has the ability to repay. Public commenters raised concerns about local hiring, transparency of contracts and past port deals. The committee moved the items forward with recommendation.
