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Committee forwards two Treasure Island sublease amendments amid debate over a utility-rate increase and PUC arrears
Summary
The committee forwarded two related Treasure Island Development Authority sublease amendments with John Stewart Company: a short-term month-to-month extension of the sublease and a separate amendment to raise master-metered residential utility flat rates from about $236.50 to $255 per month (4% annual increases). Officials said TIDA will absorb projected shortfalls; PUC representatives and budget analysts flagged differing cost estimates.
The Budget & Finance Committee advanced two related resolutions affecting Treasure Island operations: a third amendment to extend the John Stewart Company sublease month-to-month pending transfer and disposition agreements, and a fourth amendment to increase a master-metered utility flat rate for residential units from roughly $236.50 to $255 per month effective May 1, with a 4% annual escalation.
Miriam Saez, director of island operations for the Treasure Island Development Authority (TIDA), told the committee the third amendment is a short-term measure to extend property-management services while the Navy-to-TIDA transfer and the disposition and development agreement are finalized. "TIDA is proposing to extend the sublease rather than enter into a new sublease agreement through a competitive bid process because of the short term but continuing need for services," Saez said, adding safeguards such as limits on one-year leases and requirements to maintain certain units vacant for future affordable allocations.
On the utility rate amendment, Saez said the island is master-metered and that PUC bills the project as large customers; TIDA proposed raising the per-unit flat rate from about $236.50 to $255. "Any resulting shortfall would be borne by TIDA," she said, while adding the increase is intended to spread costs across the portfolio and avoid locking into a fixed agreement set at peak prices.
Budget analyst remarks and a PUC representative painted a more complex picture: the PUC—s calculation based on FY2005/06 numbers produced a higher per-unit estimate (around $286.50 per unit by one calculation), and Mr. Rose (budget analyst) said TIDA currently owes a material receivable to the PUC (the transcript records a figure presented in committee). Committee members pressed whether the incremental increase would simply lower base rents over time or shift costs into TIDA operating revenue; Saez and PUC staff said residential bills have been paid historically by John Stewart and that some arrears relate to nonresidential PUC accounts (street lighting and other facilities).
After extended questioning about master-metering, occupied-unit billing and how vacancies are handled in the flat-rate calculation, the committee moved the utility amendment forward without a committee recommendation (recorded as "move without recommendation"), and it sent the sublease extension on to the full Board with recommendation.
What happens next: Both amendments will be considered by the Board of Supervisors. Committee members requested additional documentation about PUC billing calculations and any settlement proposed between PUC and TIDA.
