SAN FRANCISCO AIRPORT COMMISSION MINUTES

SAN FRANCISCO AIRPORT COMMISSION MINUTES June 6, 2017 9:00 A.M. Room 400 - City Hall #1 Dr. Carlton B. Goodlett Place (400 Van Ness Avenue) City and County of San Francisco EDWIN M. LEE, MAYOR COMMISSIONERS LARRY MAZZOLA President LINDA S. CRAYTON Vice President ELEANOR JOHNS RICHARD J. GUGGENHIME PETER A. STERN IVAR C. SATERO Airport Director SAN FRANCISCO INTERNATIONAL AIRPORT SAN FRANCISCO, CALIFORNIA 94128

Minutes of the Airport Commission Meeting of June 6, 2017 CALENDAR AGENDA RESOLUTION SECTION ITEM TITLE NUMBER PAGE A. CALL TO ORDER: 5 B. ROLL CALL: 5 C ADOPTION OF MINUTES: Regular meeting of May 16, 2017 17-0119 5 D. SPECIAL ITEMS: 1. Retirement Resolution - Cmdr. Kenwade Lee 17-0120 5 2. Retirement Resolution - Off. Herbert Carney 17-0121 6 E. ITEMS INITIATED BY COMMISSIONERS: Privatizing Air Traffic Controllers 6 F. ITEMS RELATING TO ADMINISTRATION, OPERATIONS & MAINTENANCE: 3. Modification No. 1 to Contract 8981 - Construction Services for Runway 10R-28L Overlay and Reconstruction and Taxiways F2 and S Project Golden Gate Constructors, A Joint Venture 17-0122 6-9 4. Modification No. 3 to Professional Services Contract 8768.41- Project Management Support Services for the Airport Hotel Project - PGH Wong-MCK JV 17-0123 9-10 5. Modification No. 8 to Professional Services Contract 9185.9 - PMSS for Terminal 1/ Boarding Area B Redevelopment Program T1 Partners, a J.V. 17-0124 10 6. Execute a Letter of Credit and Reimbursement Agreement with Sumitomo Mitsui Banking Corp., New York Branch, to Provide a Letter of Credit 17-0125 11 7. Accept Proposals for International Terminal Duty Free and Luxury Stores Lease 17-0126 11-14 8. Amendment No. 9 to Post-Security Master/Duty Free Concession Lease 99-0035 - DFS Group 17-0127 11-14 9. Reject Sole Proposal for Contract 50118 Operation of the SFO Medical Clinic; and, 17-0149 Modification No. 4 to Contract 9088 with Dignity Health for Operation of the SFO Medical Clinic

to Exercise the Final One-Year Option, 17-0128 14-16 10. Accept Proposals for International Terminal A Historic Restaurant Concession Lease 17-0129 16-19 11. Accept Proposals for International Terminal A Food Hall and Café Concession Lease 17-0130 16-19 12. Issue a RFP for Professional Services Contract 50107.01 for the Management and Operation of Airport Public / Employee Parking Facilities 17-0131 19-20 13. Modification No. 5 to Contract 9239 with SF Travel Association, and 17-0132 Modification No. 4 to Contract 9270 with Hill+Knowlton Strategies 17-0133 20-21 14. Accept Proposals for International Terminal Newsstand and Specialty Retail Concession Leases 17-0134 16-19 15. Accept Proposals for the International Terminal A Coffee Kiosk Concession Lease 17-0135 16-19 G. CONSENT CALENDAR OF ROUTINE ADMINISTRATIVE MATTERS: 16. Award Contract 10647.61 - Construction Services for International Terminal Building - Roadway Expansion Joints Repairs and Storm Drain Gutter System Replacement Project - Schembri Construction Co., Inc. 17-0136 21 17. Award of Contract 50127 to Cooperative Personnel Services (dba CPS HR Consulting) 17-0137 Contract 50128 to The Hawkins Company and 17-0138 Contract 50120 to Ralph Andersen & Assoc. 17-0139 22 18. Award Contract 50117 - Assess Solar Power Generation Potential at SFO, Phase 1 - Ocular Glint and Glare Hazard Analysis of Candidate Photovoltaic Panel Sites - Sims Industries 17-0140 22 19. Award Contract 50139 - Financial Modeling & Assessment of Business Strategy Proposals - AVK Consulting, Inc. 17-0141 22 20. Modification No. 3 to Professional Services Contract 8872A.41 - PMSS for Consolidated Administration Campus Phase 1 Project MCK Americas, Inc. 17-0142 22-23

21. Modification No. 1 to Professional Services Contract 8981.42 - CMSS for Runway 10R-28L Overlay and Reconstruction and Taxiways F2 and S Project - AECOM Technical Services 17-0143 6-9 22. Modification No. 3 to Contract 8995 - Federal Legislative Advocacy - Smith, Dawson & Andrews 17-0144 23 23. Modification No. 2 to Contract 9271 - Software Maintenance Support Services - Intergraph 17-0145 23 24. Bid Call - Contract 11044.76 - Construction Services for BICE Office Relocation Project 17-0146 23 25. Modification No. 2 to Contract 9351 - Veterinary Services for SFPD Airport Bureau K9 Unit San Bruno Pet Hospital 17-0147 23 26. Approve Grant to United Service Organization 17-0148 24 H. NEW BUSINESS: I. J. K. Taxi Drivers CORRESPONDENCE: CLOSED SESSION: ADJOURNMENT: 24-25 25 25 25 Minutes, June 6, 2017, Page 4

AIRPORT COMMISSION MEETING MINUTES June 6, 2017 A. CALL TO ORDER: The regular meeting of the Airport Commission was called to order at 9:00 AM in Room 400, City Hall, San Francisco, CA. * * * B. ROLL CALL: Present: Hon. Larry Mazzola, President Hon. Linda S. Crayton, Vice President Hon. Eleanor Johns Hon. Richard J. Guggenhime Hon. Peter A. Stern * * * C. ADOPTION OF MINUTES: The minutes of the regular meeting of May 16, 2017 were adopted unanimously. No. 17-0119 * * * D. SPECIAL ITEMS: No. 1 was approved unanimously upon a motion by Commissioner Guggenhime and a second by Commissioner Johns. 1. Retirement Resolution - Commander Kenwade Lee No. 17-0120 Resolution thanking Commander Kenwade Lee for 36 years of faithful service to the City and County of San Francisco. Mr. Ivar Satero, Airport Director... we are pleased and proud to present the amazing career of Commander Kenwade Lee. He has been with the Police Department for 36 years and has spent 10 of those years with the Airport Bureau. Commander Lee has had an impressive career at the Airport and has been instrumental in driving alignment in our cultures and having that focus on the passenger experience while ensuring the safety and security of our operations at all times. He s been at SFO during all of those important activities and changes in our Airport over the years... during Asiana he was a strong advocate for how the Asiana crash was handled and the passenger experience during that tragic event. During the protest he provided a calming influence and tremendous leadership while he was Acting Commander. We are so pleased with the work that he s done and proud of his work and we re Minutes, June 6, 2017, Page 5

glad we can acknowledge that. Unfortunately, Commander Lee could not be here today. No. 2 was approved unanimously upon a motion by Commissioner Crayton and a second by Commissioner Guggenhime. 2. Retirement Resolution - Officer Herbert Carney No. 17-0121 Resolution thanking Officer Herbert Carney for 39 years of faithful service to the City and County of San Francisco. Mr. Satero... Officer Carney is here today. Herb has also had an incredible career with the San Francisco Police Department. He s been with the Police Department since 1977 and he s had 19 years with the Airport. It s been a pleasure working with Herb over that time as well. I remember starting at the Airport just around the same time as Herb and he showed the care with the Airport and the concern for passenger safety at all times, watching out for the passengers and ensuring the safety of our operations. He s had a lot of really wonderful assignments in his career and I think most notably the care are a wonderful workforce for us and help keep all of our traffic moving so well. He was also part of our SWAT Team and a weapons specialist. He was with the plain clothes detail, ground transportation detail, and he was instrumental in the launch of Segway Operations for the SFPD. Herb was a recipient of the Command Staff Officer of the Year in 2008. He s had an incredible career. Commissioner Mazzola congratulated Officer Carney. Officer Herbert Carney... I just want to say thank you. It s a pleasure to have served the City, and definitely serving the Airport. It s been exciting, inspiring and motivating. Every day was exciting just to drive in and see people eager to leave, eager to arrive... and the leadership. It s been a pleasure. Commissioner Mazzola... it s a pleasure to have you. Thank you, again. * * * E. ITEMS INITIATED BY COMMISSIONERS: Commissioner Crayton... Although privatizing Air Traffic Controllers isn t policy yet, how would it be implemented and how would it involve the Airport? Mr. Satero... we ll prepare information for the Commission. * * * F. ITEMS RELATING TO ADMINISTRATION, OPERATIONS & MAINTENANCE: Item Nos. 3 and 21 were called together and approved unanimously upon a motion by Commissioner Johns and a second by Commissioner Crayton. Minutes, June 6, 2017, Page 6

3. Modification No. 1 to Contract No. 8981 - Construction Services for the Runway 10R-28L Overlay and Reconstruction and Taxiways F2 and S Project - Golden Gate Constructors, A Joint Venture - $5,000,000 No. 17-0122 Resolution approving Modification No. 1 to Contract No. 8981, Construction Services for the Runway 10R-28L Overlay and Reconstruction and Taxiways F2 and S Project, with Golden Gate Constructors, A Joint Venture, in the amount of $5,000,000 for a new contract amount of $40,957,146, with no change to the contingency amount or contract duration. 21. Modification No. 1 to Professional Services Contract 8981.42 - Construction Management Support Services for the Runway 10R-28L Overlay and Reconstruction and Taxiways F2 and S Project - AECOM Technical Services, Inc. - $800,000 No. 17-0143 Resolution approving Modification No. 1 to Professional Services Contract No. 8981.42, Construction Management Support Services for the Runway 10R-28L Overlay and Reconstruction and Taxiways F2 and S Project, with AECOM Technical Services, Inc., to increase the contract amount of $1,100,000 by $800,000 for a new contract amount not to exceed $1,900,000, with no change to the contract duration of one year. Mr. Geoff Neumayr, Chief Development Officer... Item No. 3 requests your approval of Modification No. 1 for Construction Services for the Runway 10R 28L Overlay and Reconstruction and Taxiways F2 and S Project with Golden Gate Constructors, A J.V. of Granite Rock and DeSilva Gates in the amount of $3.5 million with an increase in contingency of $1.5 million for an early completion incentive. Modification No. 1 to Contract No. 8981.42 approves an increase to AECOM for Construction Management Support Services in the amount of $800,000 and increases the contract amount to $1.9 million. The modification to the construction services contract increases the contract amount by $3.5, establishing a new contract amount of $39.5 million and revises the contingency amount to $4.3 million. This contract provides for the rehabilitation of Runways 10R-28L to maintain operational operability and to construct the new Taxiway F2 to improve operational efficiency. The project started on February 21, 2017 with nine planned runway shutdowns starting on March 31, 2017. Due to unanticipated weather conditions, two of the planned weekend closures were postponed thus pushing the schedule well into the Minutes, June 6, 2017, Page 7

summer travel season. On May 11, 2017 we advised you of our intent to rephase the project and provide an incentive payment to complete the runway closures prior to the summer travel season starting on June 8, 2017. To accomplish this, four phases were consolidated into two and the work was performed over the Memorial Day weekend which was not a planned work weekend. The past weekend the work required an additional shutdown and closures were successfully completed. No additional weekend daytime closures will be required for this contract. This modification of $3.5 million provides for the cost of acceleration and combining of phases, including cost for premium time, for weekend and holiday work, advanced material purchases, additional mobilizations of equipment, cost for opening standby batch plants in case of a plant failure, and additional supervision to manage the work. The $1.5 million incentive is so the contractor can assume the risk of completing the work as discussed. This was similarly done in the recent Runway Safety Program. The AECOM modification provides additional staffing to support our construction services group, to take care of the re-phasing, and to provide additional materials testing that we could not support during this accelerated schedule. I would like to take time out to thank a lot of people that were involved in this very difficult project starting with Ivar who really challenged us about a month ago to get it done before the June 8 th travel season. He challenged us to come up with a solution to make this happen. It was a true team effort. On Memorial Day weekend and this past weekend we processed almost 2,000 trucks in each of these weekends through our checkpoint. If it wasn t for our ITT department who developed an application to check all of those drivers, we would not have been able to provide safety and security. It was an amazing piece of work over this weekend. Also, our amazing Airfield Safety Officers worked with our airline partners and made sure that we were able to get all of those trucks across operational taxiways. There were no security or safety incidents that occurred during these weekend closures. And a big thanks to Business & Finance who had to really accelerate and make sure we had all of our payments in because of the amount of material that we expended over these past two weekends. This truly was a team effort on a very complicated project. We estimate the savings to the airlines to be over $27 million for this accelerated schedule. The Airport is also saving an estimated $1.4 million in extended general conditions that would have resulted in a longer phasing of closures. The single biggest benefit was that our passengers would not be inconvenienced during peak summer travel. This project is Federally funded and therefore there were no local enterprise subcontracting goals in either contract. Both contracts are modified and funded from the approved Five Year Capital Program. Commissioner Crayton... why didn t the original contract begin with a DBE participation goal? Minutes, June 6, 2017, Page 8

Mr. Neumayr... typically we have an incentive program for DBE but we are not allowed to put DBE requirements in the project management services at this point in time. We do have goals that we can establish but they re not contractual mandated goals because it is a Federally funded project. Commissioner Crayton... so in essence we do have the ability to look out for DBE or LBE, correct? Ms. Sheryl Bregman, Airport General Counsel... Federally funded programs do not have those goals. Mr. Neumayr... we can t enforce the DBE or LBE program on Federally funded contracts. We just say that this is what we want and then we work together to try to achieve it and for the most part we ve been very successful. We have to take the initiative to make it happen. Commissioner Johns... this was money well invested and the fact that we finished when we needed to and not have further congestion. I think that the Airport s communication with the airlines, according to the feedback I got, was well done because we did have some snags, particularly with United in the beginning. I commend you for this and I think this is a good plan. Mr. Neumayr... thank you, Commissioner. That means a lot to all of us because it was a struggle to get there. Thank you for your support Item No. 4 was approved unanimously upon a motion by Commissioner Crayton and a second by Commissioner Johns. 4. Modification No. 3 (Annual Renewal) to Professional Services Contract No. 8768.41- Project Management Support Services for the Airport Hotel Project PGH Wong-MCK JV - $3,500,000 No. 17-0123 Resolution approving Modification No. 3 (Annual Renewal) to Professional Services Contract No. 8768.41, Project Management Support Services for the Airport Hotel Project, with PGH Wong-MCK JV, in an amount not to exceed $3,500,000 for a new contract amount not to exceed $9,000,000 and a new contract duration thru June 10, 2018 Mr. Neumayr... this authorizes Modification No. 3 which is an annual renewal for Project Management Support Services for the Airport Hotel Project with PGH Wong Engineering and MCK, a Joint Venture to increase the not to exceed amount by $3.5 million and revise the total not to exceed contract amount to $9 million, and extend the contract an additional 12 months through June 10, 2018. The forecasted amount is $13.7 million. Staff will continue to return to the Commission to renew this contract each year based Minutes, June 6, 2017, Page 9

on the consultant s performance. This contract provides Project Management Support Services for design and construction of the Airport s new 351 room hotel which will include meeting spaces, ballrooms, dining facilities and other amenities including a fitness center. This modification is for the second year of services and provides for continued Project Management Support Services that include both preconstruction and design management services, project control for both cost and schedule management, and construction management and inspection services. The City s Contract Monitoring Division has approved a 22% LBE sub-consultant participation goal and the PGH Wong - MCK, Joint Venture has committed to meeting this goal. Item No. 5 was approved unanimously upon a motion by Commissioner Guggenhime and a second by Commissioner Crayton. 5. Modification No. 8 (Annual Renewal) to Professional Services Contract No. 9185.9 - Program Management Support Services for the Terminal 1/Boarding Area B Redevelopment Program - T1 Partners, a Joint Venture of Parsons Transportation Group, Inc., The Allen Group, LLC and EPC Consultants, Inc. $4,533,243 No. 17-0124 Resolution approving Modification No. 8 (Annual Renewal) to Professional Services Contract No. 9185.9, Program Management Support Services for Terminal 1/Boarding Area B Redevelopment Program with T1 Partners, a J.V. of Parsons Transportation Group, Inc., The Allen Group, LLC, and EPC Consultants, Inc., in an amount of $4,533,243 for a new not-to-exceed contract amount of $28,261,000 for services thru July 7, 2018. Mr. Neumayr... Modification No. 8 is also an annual renewal for Program Management Support Services for the Terminal/Boarding Area B Program with T1 Partners, a Joint Venture of Parsons, The Allen Group, and EPC. This increases the contract not to exceed amount by $4.5 million and revises the total not to exceed contract amount to $28.3 million and extends the contract an additional 12 months thru July 7, 2018. The forecasted amount of this contract is $32 million. Staff will continue to return to the Commission to renew this contract each year based on the consultant s performance. This contract provides program level support for the Terminal 1 Boarding Area B program. This is for the fifth year of services and provides for continued Program Management Support Services that include program level control services for both cost and schedule management, design management across the entire program, and construction logistics and phasing coordination between projects. The City s Contract Monitoring Division has approved a 20% LBE sub-consultant participation goal for T1 Partners and T1 Partners is committed to meeting this goal. Minutes, June 6, 2017, Page 10

Item No. 6 was approved unanimously upon a motion by Commissioner Crayton and a second by Commissioner Guggenhime. 6. Authorization to Execute a Letter of Credit and Reimbursement Agreement with Sumitomo Mitsui Banking Corporation, New York Branch, to Provide a Letter of Credit Supporting up to $100 Million Principal Amount of the Airport s Subordinate Commercial Paper Notes 17-0125 Resolution authorizing Execution of a Letter of Credit and Reimbursement Agreement with Sumitomo Mitsui Banking Corporation, New York Branch, to provide a Letter of Credit supporting up to $100 million principal amount of the Airport s Subordinate Commercial Paper Notes for a term of five years, and approving certain related actions. Mr. Leo Fermin, Chief, Business & Finance Officer... in order for us to issue Commercial Paper we need to have Letters of Credit in place. This provides purchasers of our short term Commercial Paper with assurance that we have liquidity in place to pay the principal and interest on these notes when they become due. Previously, you and the Board of Supervisors approved an increase in our Commercial Paper program from $400 million to $500 million to support our Capital Program. We currently have $400 million in letters of credit in place and now we need another $100 million to reach the $500 million level. This item before you approves the execution of $100 million Letter of Credit with Sumitomo Mitsui Bank to get us to the $500 million level. Item Nos. 7 and 8 were called together and approved unanimously upon a motion by Commissioner Guggenhime and a second by Commissioner Mazzola. 7. Authorization to Accept Proposals for the International Terminal Duty Free and Luxury Stores Lease No. 17-0126 Resolution approving the revised lease specifications and proposal requirements, and authorizing staff to accept proposals for the International Terminal Duty Free and Luxury Stores Lease. 8. Approval of Amendment No. 9 to Post-Security Master/Duty Free Concession Lease No. 99-0035 with DFS Group, L.P. Minutes, June 6, 2017, Page 11

No. 17-0127 Resolution approving Amendment No. 9 to Post- Security Master Retail/Duty Free Concession Lease No. 99-0035 with DFS Group, L.P. Ms. Cheryl Nashir... I m here this morning seeking your approval to modify the RFP for the Duty Free and Luxury Stores lease and to seek authorization to accept proposals. Our current Master Duty Free concession lease expires December 31, 2017. This lease with DFS Group has been in place since the opening of the International Terminal in December 2000. Earlier this year we issued an RFP for the Luxury Stores Concession lease. All or most of the 11 locations in this lease will be used to sell duty free merchandise for which exclusive rights are given. The business opportunity and key business terms were presented at an informational conference on April 4 th. Ten duty free operators from around the world were in attendance, in addition to 21 other airport retailers. The industry sent in numerous questions and requests for clarification and modifications. And among those are the eight that were listed in your memos this morning. While the industry requested that we lower the Minimum Annual Guarantee (MAG), lower the minimum investment requirement, change the way we calculate rent, add term and exclusivity rights, we recommend retaining the language originally published in the RFP. One change that was requested that we support is inserting language that will allow us to lower the MAG when we move into the central retail plaza if duty free square footage decreases. We don t know yet when we ll be moving into the plaza, or if, and we don t know what sort of square footage will be available to concessions there as it s not planned yet. It s very unlikely that six or seven years from now when we may move into the central retail plaza that we would need less space than we have today. This is just an assurance to the industry that they will have some protection should something unusual happen and their square footage is decreased when we make this big move. Proposals are due September 15, 2017 and we anticipate to be before you with a recommendation for award in November. Commissioner Johns... has that changed or it is the same? Ms. Nashir... it s quite an increase in this RFP. Presently our MAG is $27 million and in this RFP we re setting it at $42 million. Commissioner Crayton... the space is going to be larger and it s going to be in a new location, etc. I know the economy has improved since the time of the previous MAG so having said that, you re telling us you re putting in safety measures to provide something for the new tenant, or whoever it is, but that s a considerable jump in the MAG. I m a little concerned that since it s such a high MAG that we have the appropriate vetting of all of the interested parties to make sure that they have the capacity to handle it. Ms. Nashir...yes. Financial documents must be submitted with proposals that our Finance department and the evaluation panel will study. We ll have a very Minutes, June 6, 2017, Page 12

heavy hitting evaluation panel on this opportunity because it s so important. Commissioner Johns... I don t recall in the past you re having brought back to us some of the comments and/or responses from this sort of meeting about RFPs that are coming up. I do appreciate seeing the commentary and your reasoning and why we re moving forward with this. I know we had another item that was similar to this so I do appreciate that. I m assuming that we did our vetting and that the comments gave Staff and you the opportunity to respond and we can now move forward. Ms. Nashir... correct. Commissioner Mazzola... we re looking at 11 leases here? Ms. Nashir... there are 11 spaces under this one lease. They may all be duty free or there maybe one or two that are duty paid, but it s still luxury products that will be sold. Commissioner Mazzola... the one winner would get the 11 spaces? Ms. Nashir... correct. Commissioner Mazzola... you mentioned that 10 of these candidates out of the 26 operate in other airports around the world. Ms. Nashir... correct. Commissioner Mazzola... do they get extra points when they go to the evaluation panel because they operate in other airports? Ms. Nashir... I think the nature of this business calls for, and our minimum qualification requirements call for a duty free operator of a certain size. There is not one that is based in San Francisco, however I think it s very likely that these large international firms will have local partners on their team. Commissioner Mazzola... you see the same names when you go through airports, correct? Ms. Nashir... yes. Commissioner Mazzola... it s pretty much the same people across the country. I m not abroad very much and it seems to me that some of these folks have a monopoly and I m not sure I want to be a part of that. I m not sure I want to see the same person get another spot, and another spot, and another spot, but I actually don t know what I m talking about. I just hope that the evaluation panel provides a level playing field. Ms. Nashir... yes. Minutes, June 6, 2017, Page 13

Commissioner Crayton... I disagree. As an Airport, it s our job to look at everybody that sent in a proposal and I want it to be a fair process, so your comments are biased to me. If you make a comment like that just because someone is in other airports that we don t see them as positive, that isn t a fair assessment. I would be very concerned about making a statement like that. Do you understand what I m saying? Ms. Nashir... I do. Commissioner Crayton... I think we need to be very careful about that because that s very prejudicial and I don t want that to happen in this country. I think the Airport has always kept that in full view when they make contracts. Do you understand what I m saying? We have be very careful about that language and that assessment. Commissioner Mazzola... let me clear it up because I think Linda misunderstood me. I was making a David and Goliath argument. Mr. Satero... if I could just add to this before you vote that this is a live RFP and it is in a quiet period until we are through with the process. Ms. Nashir... related to all of this is seeking approval for Amendment No. 9. to the DFS Group Lease, our current operator. We need to extend the lease six to nine months beyond their expiration so we can finish this RFP properly. We will be coming before you with award in November for the next Duty Free contract. After that, we go to the Board of Supervisors and then to our Design Review Committee, and construction documents need to be developed. We need to allow enough time to do all of this practically and with prudence. We need to turn this lease over to the next Duty Free operator mid next year. We can t award in November and expect the tenant to occupy the space on January 1 before they ve had a chance to get their designs through our process. So I m seeking authorization for Amendment No. 9 to hold over the current lease during that time. We will increase their percentage rent or grow from 20, 25, or 30% on Duty Free sales to a straight 30% on all Duty Free sales, we re going to reduce their premises because some of their premises are the subject of other RFPs that are out, and we ll leave the MAG as it is today. DFS Group has agreed to this amendment and they ve also committed to retaining all their current staff during this holdover period. Item No. 9 was approved unanimously upon a motion by Commissioner Crayton and a second by Commissioner Guggenhime. 9. Rejection of the Sole Proposal Received in Response to the Request for Proposals for Contract No. 50118 for the Operation of the SFO Medical Clinic; and, Modification No. 4 to Contract No. 9088 with Dignity Health for Operation of the SFO Medical Clinic to Exercise the Final One-Year Option, Minutes, June 6, 2017, Page 14

to Allow for an Inflation Adjustment to the Annual Management Fee, and to Increase the Total Compensation Payable by $1,800,000 No. 17-0149 No. 17-0128 Two Resolutions: (1) rejecting the proposal submitted by Dignity Health for Contract 50118 for operation of the SFO Medical Clinic; and, (2) approving Modification No. 4 to Contract No. 9088 with Dignity Health for operation of the SFO Medical Clinic to exercise the third of three oneyear options, to allow for an inflation adjustment to the annual management fee, and to increase the total compensation payable by $1,800,000 for a new not-to-exceed amount of $8,163,858. Mr. Fermin... the current contract to operate the Airport Medical Clinic has been in place since July 1, 2012. Last November you authorized us to conduct an RFP process for a new contract. We received one proposal from the incumbent, although we did receive inquiries and sent the RFP document to two other medical organizations, one in the Bay Area, and one from another state. This contract is basically a cost reimbursement contract with a fixed management fee. The proposal we received proposed a management fee that we believe was much higher than what we considered to be fair, especially since this is a cost reimbursement contract. We were unable to reach agreement on the management fee and we now request that you reject the proposal received and instead, exercise the final one year option to extend the contract to June 30, 2018. The current operator, Dignity Health, is amenable and has assured me that they will continue operation and their high standard of quality patient care. They are aware that we will commence a new RFP process this fall. I will return to you in November for authorization to commence the new process. Commissioner Johns... are we pleased with their services up until now? Mr. Fermin... yes, we re very pleased. Commissioner Johns... and you did extensive outreach but got no one else to respond? Mr. Fermin... correct. Commissioner Johns... I think there s a telling statement here and I would appreciate you really looking into this carefully. You seem to be quite far off in the administrative fee that they re requesting and that we feel comfortable with. I think you ve come up with a decent resolution but the fact that nobody Minutes, June 6, 2017, Page 15

else responded is telling us something. I look forward to hearing back when we decide what to do next year. Mr. Fermin... the last time we did an RFP process we only received one proposal as well. And the one previous to that only received one proposal. Commissioner Johns... the point is that you are pleased with their services so now it s a matter of how much. Mr. Fermin... absolutely, and our patients are also very pleased. We conduct ongoing surveys of patients that receive care at the Clinic and the satisfaction rate is always above 90%. Item Nos. 10, 11, 14 and 15 were called together. The items were approved unanimously upon a motion by Commissioner Crayton and a second by Commissioner Guggenhime. 10. Authorization to Accept Proposals for the International Terminal A Historic Restaurant Concession Lease No. 17-0129 Resolution authorizing staff to accept proposals for the International Terminal A Historic Restaurant Concession Lease. 11. Authorization to Accept Proposals for the International Terminal A Food Hall and Café Concession Lease No. 17-0130 Resolution approving the revised lease specifications and authorizing staff to accept proposals for the International Terminal A Food Hall and Café Concession Lease. 14. Authorization to Accept Proposals for the International Terminal Newsstand and Specialty Retail Concession Leases No. 17-0134 Resolution authorizing staff to accept proposals for the International Terminal Newsstand and Specialty Retail Concession Leases. 15. Authorization to Accept Proposals for the International Terminal A Coffee Kiosk Concession Lease No. 17-0135 Resolution approving the revised lease specifications and authorizing staff to accept Minutes, June 6, 2017, Page 16

proposals for the International Terminal A Coffee Kiosk Concession Lease. Ms. Nashir... I m here seeking your approval to accept proposals for Item No. 10, Historic Restaurant concession lease, Item No. 11, the Food Hall and Café Lease, Item No. 14, International Terminal Newsstand and Specialty Retail Concession Lease, and Item No. 15, the Coffee Kiosk Lease, all located in the International Terminal. An information conference was held on April 5 th and far fewer comments were collected on these leases than on the Duty Free lease. There weren t many requests for changes regarding the Historic Restaurant. There was a comment made that limiting it to Historic San Francisco restaurants that have been operating for 28 to of the last 30 years in the City preempted other successful Bay Area businesses from proposing. We recommend leaving the language as is because we re going after specifically local iconic for our traveling public. For the Food Hall and the Café concession lease, which is right next to the Historic Restaurant, we received the same comments because for this Food Hall, which will have three separate concepts in it, we ask that they all currently be operating in San Francisco. We wanted to create a San Francisco Row in this part of Boarding Area A. And again we received the comment... aren t you preempting other successful businesses. But again, we recommend retaining the current language and just allowing us to try this, at least this first time to see what we come up with in Boarding Area A. A request was also made to give extra points in the evaluation criteria for operators who are already at the Airport. This was requested on all three of the food and beverage leases, but we recommend not giving extra points to current lessees. One change we are seeking to make for the Food Hall lease is among those three concepts we ask for coffee, Asian food because we don t any on that pier, and the third category which we said could not be burgers or sandwich centric. We have burgers coming with Gott s Roadside, and sandwiches are something most restaurants offer, at least to a limited extent. However, we did get a comment from an operator in the City who has a grilled cheese concept which is very trendy concept for the Food Hall. It could be anything else, it could be Indian, it could be chicken, it could be many things but we would like grilled cheese to be able to be in the mix. That s the one change we re asking for. We received a comment for the Coffee Kiosk asking that the term be extended from 7 years to 10 years, and we recommend changing the term from 7 years to 8 years. There are two-one year options that come with this and it would be in reflection to the increase in construction costs we re seeing. This is a brand new location that could be a costly infrastructure run Minutes, June 6, 2017, Page 17

for utilities. The Newsstand and Specialty Store Leases are five leases and there was a request to bundle those together, put two locations in one lease and we recommend against it. These are all viable opportunities. There s no reason to package them. We d rather come to you with five tenants rather than two or three or four. Finally, on the International Terminal Newsstand and Special Lease Store lease there is a request to lower the minimum qualifications. Typically, if we think a business is going to do, for instance, about $4 million a year, we d like all proposers to have run a business that does at least about half of that. That s our practice. There was a request to lower the minimum qualifications for one of the newsstands down to $600,000 a year, and we don t think that s adequate for a location that might do $5 or $6 million a year. It doesn t give us a comfort level, so we recommend retaining the current language. Commissioner Johns... is there one panel for all of these, or will there be four separate panels? Ms. Nashir... I believe there will be three panels and each panel will have between three and five members on it. We haven t sat those panels yet, we re just starting to think about that now. Proposals come in July 7 th and we ll be turning it over to the panel towards the end of July. Commissioner Johns... I think the panels are the key and I hope that you will concentrate your time and effort in getting superior quality folks who can give us very objective decisions. Ms. Nashir... I will do that. Commissioner Crayton... thank you very much. For the iconic historic restaurant, what does SFBBC, LLC stand for? What business is that? Ms. Nashir... I do not know who that is but I could send an email when I go back to my office and find out exactly who they are. Mr. Satero... as a point of clarification to your question Commissioner, the attachment I believe includes meeting participants for both the iconic restaurant and the food hall concept. Commissioner Guggenhime... I would like to know at the next meeting or the meeting thereafter, what limitations we have on how much square footage total one operator can have. I don t mean owner, I mean operator. I want to know how many leases, what the limitations are and the extent we can legally do that? What s the square footage limitation and how many leases can you have at the same time? And is there a total revenue cap for the operator to Minutes, June 6, 2017, Page 18

the extent allowed within the law on our standards? My view is more the better concentration in one or two operators. I d like to know, with the City Attorney s advise, what our rules are and should we change them, or what is the maximum square footage allowed? Ms. Nashir... we ll put that together and I can tell you right now the limitation is on the number of leases. It does not relate to square footage or sales, so a very good topic and one we will study and discuss with you. Commissioner Johns... on the Duty Free Lease, the Historic Restaurant and Food Halls, do we have oral interviews? Ms. Nashir... we do. Item No. 12 was approved unanimously upon a motion by Commissioner Crayton and a second by Commissioner Guggenhime. 12. Authorization to Issue a Request for Proposals for Professional Services Contract No. 50107.01 for the Management and Operation of Airport Public and Employee Parking Facilities No. 17-0131 Resolution approving the business terms, minimum qualifications and evaluation criteria, and authorization to issue a Request for Proposals for Professional Services Contract No. 50107.01 for the Management and Preparation of Airport Public and Employee Parking Facilities. Mr. Fermin... this past April 4 th you rejected the proposals received for a new parking management contract and extended the current contract for one year in order to give us time to undertake a new RFP process. This item starts a new RFP process. And for this new RFP we will: Evaluate the submission requirements to streamline the process. Clarify the Minimum Qualifications to address if a Joint Venture is proposing, and, if so, which party must meet the minimum qualifications. Identify and thoroughly vet the new panel members. There will be no SFO staff on the panel. Establish clear parameters to address any changes to a proposer s key staff members during the RFP process and prior to starting the new lease. Limit the number and sources of references in order to prevent a lot of references coming from one source. Clarify the scoring of the proposed management team. Our goal is to return to you by December for approval of the highest rank proposer and to have a new contract in place effective July 1, 2018. Commissioner Johns... looking at the selection criteria and the point spread, Minutes, June 6, 2017, Page 19

is that similar to the way it was last time, or have you change it? Mr. Fermin... it s similar. Commissioner Crayton... previously you excluded someone, so just as a matter of understanding, there are lots of people who operate parking concession lots, correct? Mr. Fermin... the industry has been consolidating in the last three or four years and a lot of the major companies have merged. Right now there are probably four or five viable companies locally that do this sort of operation. Commissioner Crayton... in essence you ll have several people to look at? Mr. Fermin... yes. We expect at least two proposals to come in. Item No. 13 was approved unanimously upon a motion by Commissioner Crayton and a second by Commissioner Guggenhime. 13. Modification No. 5 to Contract No. 9239 with the San Francisco Travel Association - $450,000, and Modification No. 4 to Contract No. 9270 with Hill+Knowlton Strategies - $100,000 - to Provide Continuity in Work During a Six-Month Transitional Period for International Strategic Marketing Services in Overseas Locations No. 17-0132 No. 17-0133 Resolution approving Modification No. 5 to Contract No. 9239 with the San Francisco Travel Association to extend the term of the contract for six months through December 31, 2017, and to increase the amount by $450,000 for a new total not to exceed amount of $4,950,000, and approve Modification No. 4 to Contract No. 9270 with Hill+Knowlton Strategies to extend the term of the contract for six months through December 31, 2017, and to increase the amount by $100,000 for a new total not to exceed amount of $1,100,000 for continuity of International Strategic Marketing services in overseas locations during a six-month transitional period. Mr. Jon Ballesteros, Chief of External Affairs Officer... we have two separate and distinct contracts to assist us with our communications and marketing efforts. One is for locally conducted services primarily in the Bay Area, and the other is for International Strategic Marketing services which are wholly executed in our international markets. The contract before you today focuses on International Strategic Marketing Services. As you know, over the past five years international aviation development efforts have been extremely successful for San Francisco International Airport, realizing an increase of Minutes, June 6, 2017, Page 20

22.3 in international passengers over that period and adding a multitude of new destinations. Our current contractors for International Strategic Marketing have been highly successful. Two areas that they ve been really helpful is in compiling data from international market locations and ensuring success by providing promotional activities for those new routes in those overseas markets. These efforts have been highly successful. With the change in Airport leadership, coupled with the changing trends in conditions in the international aviation market, we believe it s an opportune time to re-assess and create a new vision for our international aviation development efforts. With this in mind, we are asking for a six-month extension to ensure continuity as we conduct this reassessment and visioning. Once that s done we will return with a new pool of vendors that are established through a competitive selection process. For these reasons, we ask you to approve this modification which would add $450,000 to the contract with the San Francisco Travel Association for an amount not to exceed $4.9 million, and $100,000 to Hill+Knowlton for a total not to exceed amount of $1.2 million. Commissioner Crayton...Welcome. So, you re asking for $450,000 for the contract extension? Mr. Ballesteros... yes, for SF Travel? Commissioner Crayton... for six months? Mr. Ballesteros... yes. Commissioner Crayton... isn t that an excessive amount of money? Mr. Ballesteros... it s half the amount. We give them $900,000 per year * * * G. CONSENT CALENDAR OF ROUTINE ADMINISTRATIVE MATTERS: The Consent Calendar, Item Nos. 16 through 20 and Item Nos. 22 through 26, was approved unanimously upon a motion by Commissioner Johns and a second by Commissioner Crayton. 16. Award of Contract No. 10647.61 - Construction Services for the International Terminal Building - Roadway Expansion Joints Repairs and Storm Drain Gutter System Replacement Project - Schembri Construction Co., Inc. $2,242,000 No. 17-0136 Resolution awarding Contract No. 10647.61, Construction Services for the International Terminal Building - Roadway Expansion Joints Repairs and Storm Drain Gutter System Replacement Project, to Schembri Construction Co., Inc. in the amount of $2,242,000 with a contract duration of 200 consecutive calendar days, and with a corresponding Minutes, June 6, 2017, Page 21

amount in contingency authorization. 17. Award of Contract No. 50127 to Cooperative Personnel Services (dba, CPS HR Consulting), Contract No. 50128 to The Hawkins Company, and Contract No. 50120 to Ralph Andersen & Associations for As-Needed Executive Search Consulting Services - $900,000 No. 17-0137 No. 17-0138 No. 17-0139 Resolutions awarding Professional Services Contracts No. 50127 to Cooperative Personnel Services (dba CPS HR Consulting), Contract 50128 to The Hawkins Company, and Contract No. 50120 to Ralph Andersen & Associates for As-Needed Executive Search Consulting Services for hard-to-fill executive and Airport specialized positions for a combined total contract amount notto-exceed $900,000. 18. Award Contract 50117 - Assessment of Solar Power Generation Potential at San Francisco Airport, Phase 1 - Ocular Glint and Glare Hazard Analysis of Candidate Photovoltaic Panel Sites at SFO - Sims Industries, LLC - $175,864 No. 17-0140 Resolution awarding Contract 50117, Assessment of Solar Power Generation Potential at San Francisco Airport, Phase 1 - Ocular Glint and Glare Hazard Analysis of Candidate Photovoltaic Panel Sites at SFO to Sims Industries, LLC, in the amount not to exceed $175,864 for a 180-day calendar term. 19. Award of Contract No. 50139 - Financial Modeling and Assessment of Business Strategy Proposals Related to Lease and Use Agreements - AVK Consulting, Inc. - $500,000 No. 17-0141 Resolution awarding Contract No. 50139 to AVK Consulting, Inc. for a total not to exceed amount of $500,000 to provide Financial Modeling and Assessment of Business Strategy Proposals Related to Lease and Use Agreements for a period of four years with one, one-year option to extend. 20. Modification No. 3 (Annual Renewal) to Professional Services Contract No. 8872A.41 - Project Management Support Services for the Consolidated Administration Campus Phase 1 Project - MCK Americas, Inc. - $1,415,000 No. 17-0142 Resolution approving Modification No. 3 (Annual Minutes, June 6, 2017, Page 22

Renewal) to Professional Services Contract No. 8872A.41, Project Management Support Services for the Consolidated Administration Campus Phase 1 Project, with MCK Americas, Inc. in an amount of $1,415,000 for a new contract amount not to exceed $4,300,000 and a new contract duration through July 28, 2018. 22. Modification No. 3 to Contract No. 8995 - Federal Legislative Advocacy - Smith, Dawson & Andrews - $550,000 No. 17-0144 Resolution approving Modification No. 3 to the Airport s contract No. 8995 with Smith, Dawson & Andrews to provide Federal Legislative Advocacy to exercise the final two year option to extend the contract through June 30, 2019 and increase the contract amount by $550,000. 23. Modification No. 2 to Contract No. 9271 - Software Maintenance Support Services - Intergraph Corporation - $130,000 No. 17-0145 Resolution approving Modification No. 2 to Contract 9271 for Software Maintenance Support Services with Intergraph Corp. in an amount not to exceed $130,000 for a period of six months effective July 1, 2017 for a new total contract amount not to exceed $1,078,319. 24. Call for Bids for Contract No. 11044.76 - Construction Services for the BICE Office Relocation Project No. 17-0146 Resolution approving the scope, budget, and schedule for Contract No. 11044.76, Construction Services for the BICE Office Relocation Project, and authorizing the Director to call for bids. 25. Modification No. 2 to Contract 9351 - Veterinary Services for the San Francisco Police Department Airport Bureau K9 Unit - San Bruno Pet Hospital - $90,000 No. 17-0147 Resolution approving Modification No. 2 to Contract No. 9351 to exercise the second of two one-year options with San Bruno Pet Hospital for Veterinary Services effective July 1, 2017 through June 30, Minutes, June 6, 2017, Page 23

2018, in the amount of $90,000 for a new total contract amount not to exceed $405,000. 26. Approval of a Grant to the United Service Organizations, Inc. - $165,000 No. 17-0148 Resolution approving a three year grant to the United Service Organizations, Incorporated of up to $55,000 per fiscal year, for a total of $165,000, with two oneyear options to extend at the sole discretion of the Airport Commission. * * * H. NEW BUSINESS: Discussion only. This is the Public Comment section of the calendar. Individuals may address the Commission on any topic within the jurisdiction of the Airport Commission for a period of up to two (2) minutes. Please fill out a Request to Speak form located on the table next to the speaker s microphone and submit it to the Commission Secretary. Mr. Barry Taranto... I m an activist among the taxi driver community. I hope you have an opportunity to meet some of the leadership among the taxi drivers. I was very fond of your predecessor and he helped resolved some issues that made it a very good working experience back in early 2000's when we had a little boycott and he helped resolve issues with his staff. So, I m hoping you could be helpful with us. First, I want to say you should honor a guy named Paul Foster, the liaison between the taxis and Landside Operations. He tries to resolve a lot of issues and he has a lot of empathy for our concerns and tries to come up with solutions. So you ought to know Paul Foster and also Eric?????, the head of the curbside management company who runs the dispatching. However, there are some issues that have come up. The people who give the orders to the PSA s are falling down on the job. You ve hired a lot more PSA s and there are several problems and I don t have time to go over them with you. But it s really bad how the PSA s are treating cab drivers. There was one I wanted to give a hug to the other day who actually helped facilitate the late night flights, which brings up a point. I want you to do runway renovation every Sunday because it helps a lot in these late night delays. So, there s a problem with that and I m hoping that we could meet with the head of the PSAs to work out these issues because they re treating us like Jews going to the gas chamber sometimes and not actually working on clearing the curbs of the solicitors, especially on certain nights. The next issue is Super Shuttle. They put SuperShuttle downstairs and they re soliciting and taking away our business unfairly. We need to resolve that issue because the dispatchers are soliciting unfairly. The next point is the food truck. It s not being monitored fairly and I ve tried to leave several messages... I ve called Minutes, June 6, 2017, Page 24