tv Public Utilities Commission SFGTV February 29, 2020 3:00am-6:16am PST
[gavel]. >> good afternoon. like to call to order the regular meeting of the san francisco public utilities commission. today's date is tuesday, february 25, 2020. roll call, please. [roll call] >> clerk: we have a quorum. >> very good. commissioners, you have before you are the minutes of february 11. are there any additions or corrections? >> i'll move approval. >> second. >> is there any public comment on the minutes of february 11? all those in favor? opposed? the motion carries. at this time, i'd like to call for a general public comment.
>> clerk: madam president, we need to hear -- oh, i'm sorry. >> that's okay. >> clerk: it's been a long day. >> shake the sand out of your shoes. >> general public comment, item 4. members of the public may address the commission on items that are within the commission's jurisdiction but not on the agenda. >> beiokay. i have six speaker cards. bill collins. >> bill collins for pacifica. first, i'd like to thank the commissioners for serving and particularly you, president caen, for your years of service. i saw my next-door neighbor washing his car in his driveway, and i know that in los angeles and san diego,
those athat is not legal. i don't see much encouragement of government encouraging water conservation. i know that the last government, i heard him say, okay, the drought's over. i know with all the work i did, i don't save any money. my water bill isn't based on water usage -- mind you, this is in pacifica, but my water bill is based on this set rate. and i went to the district, and i said why don't you encourage the public for water recycle?
and they said we don't want to get into that because it doesn't affect the rates. >> i can go on vacation for a month and not use any water and come back, and my water bill will be the same. there is a difference between water usage and water need, and i think it's good for you commissioners to be skeptical when you're given data, no matter who it's from, that you're doing what you need to make sure the rivers have sufficient water because it would be a real shame to lose oceans and salmon so that people can have a clean driveway. >> great point, mr. collins. next speaker, francisco acosta.
the grand jury is visiting the public utilities commission, and they're focusing on community benefits, and the community benefits that are being doled out are millions of dollars, and it is taxpayers' money. and we come here again and again and again, and we tell you that this -- community benefits should benefit the community. it's community benefits. it shouldn't benefit individuals who are employees of the san francisco public utilities commission, and it shouldn't benefit the politicians. it's a shame that the f.b.i. had to come all the way from the east coast to the west coast to shame us. we have the sunshine task
force, it doesn't work. we have the ethics commission, it doesn't work. we have a city attorney and the grand jury at the rules committee said they don't believe him, they don't trust him because he's not objective. so who do we have left? we only have the controller left, ben rosenfeld, and the controller's office. and even there, we see that they drag and drag and kick the can down the street. now when you're dishonest, when you're a crook, you're going to impact those who cannot defend themselves, so i'm not calling you commissioners crooks, but i'm appealing to you to do the right thing. do the right thing as
commissioners. thank you very much. >> thank you. next speaker is ann clark. >> i'm ann clark, and i will be quick. i have a letter for each of the commissioners and will put the remaining letters on the table right over here. the letters are orange. it's a one-page letter. secondly, i'd like to let you know that on march 6 at the club's annual women's luncheon each year, we are honoring ann caen and commissioner viator for their work. we are proud of all their work and to give us their thoughts
about what's happening here in san francisco. but it's really a lunch, and it's meant to be a lunch, and the lunch begins at 12:00 p.m. it's easy to get to 100 embarcadero, where the commonwealth club is, so we look forward to seeing you at the lunch, having a good lunch, and having a good time. and we invite everyone who wants to come, please come to our women's annual luncheon at the commonwealth club. that will be march 6. we look forward to seeing you at the lunch and having a good time. if you want more information, go to thecommonwealthclub.org on the luncheon, which we are very proud of. thank you. >> thank you, and thank you for honoring my vice president and myself. that's very nice of you.
the next speaker is ms. broken. >> eileen broken, coalition for san francisco neighborhoods, here on my own behalf. as the process for the two-year capital improvement program has begun, i have been advocating with supervisor mar to have the project include the south basin in the upcoming s.e.p. south basin poses a public safety risk should it rupture in a seismic attempt. the p.u.c. has attempted to secure fema grants for the seismic retrofit on numerous occasions. these grants applications have
all failed. now's the time for the p.u.c. to step up and just do it. a separate issue is taraval and awas. taraval is receiving no awas infrastructure. this is even though a new installation is likely more cost effective than the upgrade of an existing installation. awas on taraval has received support from the coalition for san francisco neighborhoods, the greater west portal neighborhood association, and the taraval parkside merchants,
people of sunset. thank you. >> is there any comment on the upgrade or subset? >> i can give you information later. >> next speaker is dave warner. >> donna, can i ask you, if anyone's interested, to give them a copy of this presentation? so it's an honor to speak to you. my name's dave warner. i'm a palo alto resident. to quickly verbalize this context, when the design drop policy was developed, not even 100 years of tuolomne river flow data was available. it was hard then to know what kind of draws were possible. but today, we have 100 years of flow data available from tree rings.
it is now possible to predict the severity of upcoming droughts. attached to yesterday's e-mail is a slide deck with such analysis and it's the same as donna just handed out. knowing the possibility of the design drought occurring is vital. without knowing possibilities -- probabilities, we are flying blind. if the design drought is a once-in-a-1,000-year event, your rate pairs would want such diligence. the investment is likely just as important as the excellent investment that you're making in trying to understand climate change impact.
to cite one more example, if the sfpuc's probability analysis is similar to this one, it appears we have 200 to 300 more years storage than what we thought, and could survive a 100 -to-500-year drought. it this is a key decision-making tool. thank you. >> mr. warner, i did review your e-mail. found it very interesting. >> well, thank you very much. >> next speaker, peter druckmeier. sorry. >> good afternoon. peter druckmeier with the
tuolomne river trust. you probably all know that president trump was in bakersfield last week to sign orders to allow for more pumping of water to south san joaquin valley and southern california. and that's all part of recent biological opinions on the state of the delta and the species that depend on it, and what -- diverting more water, how that would impact things. the l.a. times got hold of the original biological opinion, the draft, which said this would have negative impacts, and the trump administration let those scientists go, and they got a new team. and they said voila, we can pump more water, and it won't have an environmental impact. so very similar to what we experienced in november 2018 when u.s. fish and wildlife service was forced to rescind its recommendations in the
licensing process, and you'll remember that led to the board of supervisors resolution that caused some controversies here. so following trump's visit, the next day, the state sued over the biological opinions, and there's a very interesting editorial in the modesto bee yesterday that said farmers don't celebrate trump's visit and the signing because this is going to torpedo the voluntary agreements. it might favor some farmers down in the water district, but modesto, he did not do them a favor. so the question is are we going to experience more and more delays waiting for the agreements because it's never come. it's been 14 years since we
signed the appropriations of the san joaquin basin. and i appreciate this commission says you want to see things happen sooner rather than later. we don't need to wait to see how this process plays out, and hopefully, we'll have more discussion in the agenda. thank you. >> thank you. next speaker is barry nelson. >> thank you, madam chair and members of the commission. barry nelson with the golden state salmon association. i'll stick around to speak later in the agenda, but just a couple of big framing comments where we are today. as peter mentioned, the trump administration finalized all the necessary steps to begin implementation of the new biological opinions, and i just wanted to start by -- by making sure that it was clear how
astonishingly radical those biological opinions are. those -- and i'll only mention one example. there are many, many, many examples. as peter mentions, the draft biological opinion was withdrawn. dozens of federal scientists were reassigned, the trump administration having fired the scientists, got the conclusion they wanted. instead of the conclusion driven by scientists, which is what you're proposing would threaten extinction of multiple species, they got a rubber stamp of what you're proposing is fine. i'll just give you an example of one of the opinions. salmon depend on the cold water flowing out of shasta dam to keep those fish alive.
if it doesn't, those fish are cooked, the eggs are cooked in their nests. this is not a theoretical problem. in 2016, we lost 96 and 97% of the endangered winter run salmon, and this is the only healthy population in the world. what's -- and that fish kill was one of the reasons the process of writing new biological opinions began. and the anticipation from the then-secretary of interior who wrote to the then-president obama was a statement that we need stronger protections and this is going to mean devoting more water to a more healthy environment. the opposite has happened, and just in this one example, the new biological opinion eliminates temperature protections at shasta. so the only biological opinions said to the bureau, you have
maintain x amount of cold water. this eliminates that entirely. it literally gives them the authorization to kill 100% in the salmon in the river for three years running. that's an extinction plan. this has enormous implications for your water supply, for my industry, and for the voluntarily processes that we'll probably talk about later in the agenda. [inaudible] >> sure. >> who does this benefit? >> sorry. the most clear fishebeneficiara couple of fisheri fisheries.
their former lobbyist david bernhardt, is now the secretary of the interior. he's leading the trump administration's charge for the process of writing these biological opinions. and these are just -- they are what you would expect from this administration in terms of the respect for science and the law. thank you. >> any other comment for this item 4? >> thank you, president caen. my comment card may have been lost in the shuffle. my name is noah, and i'm
representing fishing ports from sacramento to crescent city. this commission has the opportunity to engage proactively to limit the fallout associated with the trump administration's plans in two key ways. the first is by signaling that this commission opposes the radical actions taken by this administration to destroy california's water ways and its fisheries. the second thing you can do is to signal your support for the action that the administration filed last week, joining national resources like the
national environmental defense council, defending the businesses that rely on healthy iss fisheries in federal court. it will show that this action needs to be taken seriously and given due consideration by the courts not just on the issues because the issues are complicated and profoundly challenging, but in order to secure a challenge on the implementation of this project. i'm going to talk to you about what this means to san francisco and the business owners that i represent. in 2005, a biological opinion similar to the one that the trump administration is pushing was administered by the bush administration. it's not exactly like that, but
it's close. three years later, the year those juvenile fish became adults, our fishery was shutdown. there was no salmon fishing in california, recreational or commercial. businesses were wiped out, billions of dollars lost. if we don't take action to right the wrongs that are being conducted right now before our eyes, then i can guarantee you we're going to be dealing with that again. we're going to lose all the economic productivity associated with the salmon fishery, the recreational joy they derive from that industry. this biological opinion nukes the biological opinion process. >> thank you. any other speakers? next item, please.
>> clerk: item 5 is communications. >> commissioners, any comments or communications? i know there'll be some comments from the public on 5-f. are there any other comments before we start the speakers for that segment? seeing none, i have an announcement to make. before the meeting began, i had ten speaker cards. i now have 21. i am faced with a quorum problem starting at 5:00. commissioners have to leave, and we have a very lengthy meeting. so unfortunately, i have to announce that i have to limit you to two minutes instead of our usual three. i'm very sorry, but i -- i have
the river has run backwards sometimes. the river is dry from the point where the tuolumne river comes into it. the farmers have been promised about four times as much water as we actually have in california for them. and the president is now decided to give them even more water, which is sort of like putting gasoline on a forest fire. so i would hope that you could take the advantage of setting an example for all of us to fix up the central valley the way we fixed up san francisco bay and vote for more water coming out of the tuolumne that will set other people off to do the other rivers, thank you. >> i'm going to call the next five speakers.
originally read an article about contaminants and their effects on biological population and the san francisco bay delta and things that could also be applied to the tuolumne river. it looks like almost all the research is going towards molecular biology and so i think it would be good if you already have one on board and the next time you hire a biologist to hire a ecologist or biologist. some of the examples of what is coming up is i went to a conference in davis just about a month ago about environmental d.n.a. and all the progress that's being made in that field and i think if you get out in front of it it could be something very all able for knowing the condition of the
river. another thing is i looked back on some records and it looks like the california bio assessment team has done some work for macro and vertebraes on the tuolumne river and it might be good to see if they can come back and do that. i don't know if they're on a cycle for testing the different rivers but that's something you could look into. finally, i think that you know, as far as increasing the flows, one thing we know that will be beneficial and we'll get diluted and washed downstream so it's free of pollutants as you can keep the tuolumne river.
>> good afternoon. my name is mary butterwig i'm retired botanist and have lived in san francisco for over 20 years. while i enjoy the high-quality drinking water that comes to san francisco from the tuolumne river i realize the delivery of this precious resource comes at a high cost to the ecosystem. the construction and operations of the dams ask diversion and the tuolumne river have had and continue to have adverse impacts on the aquatic ecosystem of the tuolumne and important tributary within the larger bay delta watershed. before the dam was constructed the tuolumne hosted 100,000 spawning salmon in many years and the numbers dropped to a few how or as a low as a few hundred. this degree of degradation is unsiss sustained and must be reversed by increasing flows in the river. i urge the puc to voluntarily release its share of 40%
unimpaired flow right now and do so for at least two years. as an interim proposal. puc should also direct staff to initiate negotiations with irrigation districts. this proposal is consist apartment with the california water resources control boards, in stream flow standards and these standards call for in stream flow of 30% to 50% of the february through june flow starting at 40%. these flow measures are needed to provide spring flows high enough to get water onto the flood plains, provide sufficient flows for migration of fish and mainstream water temperatures low enough to support a cold water fishery. improving conditions in tuolumne river requires both flow and non flow measures. non-flow measures in the absence of sufficient flows will not
work. the good news is -- >> thank you, very much. it's hard with two minutes. i have dick allen. ok. >> good afternoon, commissioners. my name is dick allen. i live in san francisco and live in district 7 as well. i have been involved in water activities and issues for 33 years in our city. as a founding member of the lake mer said task force in january of 2000, served as co-chair of the water committee. i've also had the experience serving on this san francisco planning commission in the mid 1980s. i have -- i have edited this so i've had several questions for you that i would like to have each commissioner, overtime, discuss them individually, so we know what your thought processes
are. when was the last time that san francisco puc discussed in detail the tuolumne river and how the endangered species act is enforced. as a san francisco puc discussed in public, the significance of the ninth circuit court of appeals decision, that upheld the endangered species act by proclaiming people need water but so do fish. in your mind, how should this reeling be used to protect the tuolumne river. be specific, include projects, time lines and results objectives. when has the puc discussed the public trust doctrine and how this doctrine could be used to have a positive impact on the tuolumne river ecosystem and habitat. what performance standards have you established that embrace the
endangered species act and the public trust doctrine in order to protect the tuolumne river ecosystem and habitat. today, commissioners, you need the support. thank you, mr. allen. elaine booken. >> eileen beingen coalition for san francisco neighborhoods who which commissioners said about sunset reservoir south basin, thank you. i am here on my own behalf. i am here in opposition to staff recommendations. i had intended to speak much later here but i'm here in support of the tuolumne river trust proposal for in stream flows and i will suppose sort
what has been said up to this point and what will be said after i speak. thus far, the puc's policies and actions seem insular. adding a lawsuit increases the perception that the puc is using this lawsuit as a blunt instrument. thank you. >> thank you. next speaker, christina pappas. >> hi, i'm christina pappas president of the san francisco league of conservation voters. we are presenting san francisco voters who care deeply about environmental impact of our city policies. we believe the sfpuc position, which i might add, is a staff-driven position. we've believe it's out of touch with the values of our city and our residents and i want to present some survey results to back this up. the tuolumne trust commission call state fullerton social
science research survey san francisco voters on their attitudes towards water conservation. over 90% of respondents took action to conserve water during the recent brought and most cited the environment and two-thirds have continued to conserve since the drought. environmental concerns are significant motivator of efforts to conserve water. over 90% were supportive of measures to protect and row store the tuolumne river. people are more likely to support measures such as efforts to conserve water and blunted groundwater if it benefits the environment. san franciscans value agriculture and we value a healthy bay and fisheries and we don't believe we have to chose between them. thank you. >> thank you. ms., i have to keep these -- i'm sorry. i was talking to her. i have to keep these in order so sit down until your name is
called. obviously there's some error here. our secretary is already put these in order so i have to condition. to continue. the next five speakers. mr. da costa is first. shannon macknear, bill martin, dave warner and martin gathburg. >> so commissioners, we have an advocate here in peter, who it takes a keen interest and this is his subject and a lot of people have spoken about the tuolumne river. i want to give voice to the salmon. because it's very difficult for someone who is not indigenous to
understand the role of the salmon. and you commissioners can do something rather than have the san francisco public utilities commission staff initiate a lawsuit. this lawsuit is not going to take us anywhere. and i think that the commissioners should contact your staff again and ask them what's the purpose and what do they have in mind by having a lawsuit? skull realizand you will realizu are favoring the guy in the white house. i don't want to mention his name. the time has come for you commissioners, to favor the tuolumne river so that you come
to the aid of the salmon. the indigenous people have no clue what is happening here. they have some clue of of what is happening in sacramento and when they come here and i hope some of them are here, they speak for the tribes, the tribes are hurting. when they go to the edge of the war they cannot see they have the salmon they used to see before. do something. >> thank you. did sharon macknear, is she here? ok. shannon mack enty. i'm sorry. i'm shannon and i'm from palo
alto and first let me thank you for your service. for all you do for this city and the area. i'm here today because i'm passionate about keeping our ecosystem in balance and in particular, our de delicate watr resources. the water for our cities are rivers and the bay is under great threat from both drought but also human management. you can help improve the situation. i've been engage in helping to protect our water resources for years and i'm very proud that the palo alto city council voted unanimously to support the bay delta plan. after hearing from all sides including the sfpuc and baska. i spoke that that meeting and the next day at state water board meeting in support of the bay delta plan. a survey in 2009 at san jose state university showed the biggest driver for people to conserve water was the environment. and we share with the environment that we share with
fish and all the species that depend on healthy rivers in the bay. under current conditions the water conservation and recycling provide very little benefit to the rivers that feed the bay. the water we conserve during the five-year drought did not benefit the environment. instead, the sfpuc horded it behind dams only to dump it in 2017 when we had near record precipitation. the tuolumne river experienced one excessive year of flows at the expense of terrible years. so we want you to protect the health of our rivers and bay. our human healing and our prosperity is inter woven with the health of our waterways and ecosystems. please, please support releasing more water. thank you, very much. >> thank you. bill martin, please.
>> thank you, my name is bill martin. i'm a san francisco resident. a customer of the sfpuc and a volunteer. my point today is simple. the sfpuc needs to update its design drought. my handout has parts of three different documents. the first has two slides. from a presentation by sfpuc staff member given to the mayors water supply task force. the second is two pages. from a 1994firk filing signed when he was general manager. the third quote is from california state law. a total of five pages just those two if save paper. please refer to page one. it shows a list of academics where widely respected experts in climate change. you hired them to advise you on
how to adapt to climate change. page two from the same presentation is a graphic showing issues which were and are being analyzed as part of your climate change adaptation changes. now turn to pages three and four. from a 1994 document. please note i am not criticizing mr. moran's work. i'm sure he did the best he could with what he had available. let's focus on the differences between pages one and two and throw and four. the document has no widely recognized experts in drought planning and management. it has no graphic illustration of everything analyzed in the design drought. no list of scientific and technical resource used. you need an update. you need to apply the rigorous scientific process you used in looking at climate change to drop planning and management. 26 years is long enough. after all, how many of you are
still flushing the same toilet you used in 1994? thank you. >> thank you. >> dave warner. >> thank you. my name is dave warner. thank you for considering the proposal interim flow propose a general manager kelly's ler mentioned the voluntary agreement negotiations, litigation and the need to get the irrigation districts to release water past don pedro dam. these lead to questions of mr. kelly and council. would such an interim process harm the sfpuc's position or would it be viewed favorable as a sign of good faith. would the irrigation jurisdictions with hold their agreement because they think it would weaken their position. would mr. kelly elaborate on his views. perhaps mr. kelly could review with you aspects of his opinion and if necessary do so with you in closed session? as you know, providing benefit to the ecosystem has taken a
long time measured in decades. it was a year ago december 11th right before the state water board's bay delta plan vote there was a resolution for the sfpuc to move forward with its proposed flow actions. independent of the state water board's decision. commissioner moran at the time, you mentioned efforts that you and mr. richy pursued since the 1990s try to get more water to the environment. you expressed hope that the commissioner's prose posed resolution will produce water and do so on a timely basis. i'm stating these points in appreciation of both of your efforts and don't at all mean this next mark to be disrespectful. i think unfortunately, the proposal a year ago to my knowledge with commissioner moran's support has not yielded more water. the proposal is another chance to get nowhere net water for the environment and i'd ask you to work hard with mr. kelly and trying to find a way to make
this work. thank you. >> thank you. martin gothbrook. >> thank you. martin, i live in santa clara and i've been involved in water issues for several years now. i've spoken before this board a few times for the need of greater flow down the tuolumne river in support of the bay delta plan. i've attending meetings on the vdp and listened to the political elite of mer said county threatening war on state officials. thankfully you don't have to worry about that from us. you want to make the best decisions on behalf of the people you serve and commissioner max well i'd like to thank you for your support in passing the 2007 resolution regarding the system and program when you were supervisor. it's a beautifully written resolution, the spfuc did write right by approving the usip
which capped water sales at 265mgd and projections were going to be 285mgd. they committed to make up the difference through water conservation, recycling, groundwater, utilization, other than taking more out of the tuolumne. in 2018, water demand was only 186 and in '19 it was 182 and the sfpuc10-year plan is sales decreases and it just seems that because demand has been so low and is getting low, it seems like the sfpuc has a lot of room under the cap to manage the design drought even whole providing more water for tuolumne. i've heard tuolumne, i've heard irrigation district managers talking about the concerns. everyone is looking at it from their own piece of the pie but no one wants to take short term measures, how experimental they may seem, and this is where the board can and should show
leadership and get talking and growth us moving faster with third party intervention if possible. thank you for your time. >> i'm going to read the next five speakers. norma wallace, mark mullton, noah obamen, peter drakmire and care andarnold thompson. >> good afternoon, commissioners, thank you for this opportunity and thank you for your service. i am here today to speak for the fish. they cannot be here. they live in the river. i am fourth generation san franciscan. i grew up knowing that san francisco is the city that knows how. i am tied to this place. i feel responsible. yet the responsibility for
directing staff on flows is yours. on july 22nd, 2014, the san francisco board of supervisors including london broad, passed by 10 votes resolution 288-14 reflecting the will of the people of san francisco. it surgerie surging pretext of a and estuary. i found a few programs per nant. whereas, california state water resources control board determined in 2010 that in order to protect public trust resources 75% of unimpaired run office from the watershed should flow out of the delta into the estuary during critical winter and spring periods. in 2011 the bay report also indicates that limited freshwater inflows are having a negotiate tim impact on the greater delta estuary and all
regions of the bay declining. they asked for specific principles to be applied and the protection and restoration of a healthy ecosystem including adequate water quality, outflow and supply in perpetuity. recognize that the bay delta echo system is in a state of chronic drought due to water management practices. incorporate sustainable approaches for improved water supply, quality and reliability through the over arching principle of regional self-sufficiency. reports from 2010-2011. >> thank you, very much. >> mark molton. >> i'm mark molton coming up from san mateo county.
my family has been here since the 1880s and i'm here today to having misplaced my notes. to advocate for in stream flows to the tuolumne and you might ask how do you get to immediate release and your mission is to provide reliable high-quality to your customers. i could suggest to you that you have a lot of expertise on your board and environment in water systems in labor and i would suggest that you release that water now and for at least two years and i ask you to ask why not? i would say in contrast i would say why to achieve the goal of protecting the river echo system
and i think it's a false conflict to talk about people and fish. i think the fish show up when you do the right thing so i suggest taking action to do that and i suggest when you do you will reflect the value of of your constituents so i see and would appreciate you taking leadership and i think the staff reports that you got puts the ball in your court and it otherwise does nothing so i urge you to take action now. thank you. >> thank you, very much. >> president cane, noah on behalf of the pacific coast federation of good to be with you today. i am speak north opposition to the staff recommendation in the
sense that this is a recommendation that the response to the commissioner's request for information is adequate in our opinion, the general manager's response to that request is not adequate. i'll speak to the three major points that are made in it. the first is that litigation pre includes your ability to act on behalf of the environment. there's no precedent that establishes that you would be unable to act on behalf of the public trust responsibility your agency has to the fish and wildlife of the tuolumne river and beyond in unilaterally ensuring instream flow is met. the second point is that you are unable to implement an agreement to provide down pedro reservoir, however, you certainly could direct staff tone gage in
discussions with modesto in order to secure those arrangements. it would be tough and difficult but it can be done. and i edge cor you to direct your staff to engine in those discussions. is the voluntary agreements process pre includes your ability to act here if the water that this group and our organization is advocating to be part of an instream flow regime for the at what time is part of thtuolumne, that shouldhave been this let, all we have is a vague illusion that the fact that negotiations are on going. i encourage you to direct staff to be more fourth coming about how these discussions are going. the fish can't afford to wait. thank you. [please stand by] kul
. >> -- and convinced the irrigation districts to meet them halfway and to double the volume flowing down the river in the summertime, which has happened every summer since. 100 c.f.s., but the base loads are 50, and that's provided some relief. there's also tuolomne advisory committee, but the flow issue is really critical. what i hope you'll do is emphasize to staff is you want to see this proposal flushed out, and you want them to work as hard as they can with the district.
let's get something going so we can get to work. thank you. >> thank you. arnold thompson. >> commissioners, arnold thompson. i'm just a resident here in the city. i have a background in sto-- [inaudible] >> it should be encouraged and funded, but it's no substitute for adequate flows of cool, clearwat clearwater during spawning and migration waters. it's up to us as a society to decide whether we want to impound and sell every last
drop of water or leave some for our native species. starting this year, new single-family homes in california must have solar panels. why not adopt similar measures for rain water capture and gray water reuse? now that we've established limits on the groundwater free for all in california, how about putting a limit on the production of crop land? thankfully, california recognizes the need to provide efficient flows to preserve species. i ask the county to follow the leads of the state and citizens of california to reduce the share of 40% of the unimpaired
flow. working together, i'm confident we can conserve our native salmon for generations to come. >> thanks. i'll now call the next five speakers. gail shrettanovic, denise louie, cindy charles, karen eckenberg, and karen harwell. >> good afternoon, my name is gail, and i'm cochair of the social justice task force of m san mateo county democracy for america. a member of the extended conroy family, including several san francisco policemen and firemen
and one county supervisor. i have seen good decisions, such as not paving over most of san francisco bay, which was actually proposed, and bad decisions, which was allowing central water interest to have way, way more control than they should have over our water. note that southern california cities want no part of these major projects and voted against funding the twin tunnels. reduced flows reaching the delta have allowed toxic algae blooms that can make it unsafe to contact the water and even unsafe to breathe the air. many central valley residents have no safe drinking water, so export crops that exhibit a puny 2% to 4% of g.d.p. should
be illegal. please increase the tuolomne river flows to levels indicated by real science. the future is looking at you. do the right thing. >> thank you. denise louie. >> good afternoon. denise louie. i'm a native san franciscan and a member of the national organization center for biological diversity. 2020 is the final year of the united nations decade on biodiversity. the current goal is to reduce biodiversity laws. the san francisco board of supervisors 2017 biodiversity resolution references the united nations decade on biodiversity and the importance of living in harmony with nature. governor jerry brown's 2017 biodiversity initiative orders all state agencies to work together to, among other things, manage and restore natural and working lands and water ways because california
is a biodiversity hot spot, and the state's plants and animals coexist to create complex and beautiful ecosystems. so what is a biodiversity hot spot? it means california's blessed with a great many species of flora and fauna, and by the way, no other state has greater biodiversity. it means that many of these species are in danger of extinction. during the ten years it took the state water board to develop, vet, and approve the 40% plan, delta smelt and salmon numbers plummeted. it is our ethical responsibility and state mandate to immediately increase unimpaired river flows from the current 20% to approximately 40% if not the 60% that the scientists recommended in the drafting of the state water
board's plan, so please negotiate for a compromise, which is between 20 and 60%. 40% is the compromise. thank you. >> i have a question for you, miss louie. what type of work does the center do? >> they try to protect species from going extinct across the country. >> thank you. cindy charles. >> good afternoon. i'm cindy charles, and i'm the conservation chair person for the golden state association of fly fishers. i'm on the board of the tuolomne river trust. i'm a native san franciscan, and i fish on the tuolomne river. it says that a request was made for staff to report on whether
the sfpuc should release 40% of unimpaired flow this spring. actually, commissioner viator asked for a response to the possibility and if it's something the p.u.c. could do within staying in the design drought. this one-page cursory memo lacks any true exploration or analysis of the possibility of releasing additional impaired flow in the tuolomne in the first and second years. yes, we already know the voluntary agreement process is dragging on, and the sfpuc will need to work with districts in determining flows. the question is about the possibility which remained unanswered by staff. this is an opportunity to keep more water in the river when demand can easily be met. our proposal will help keep
water in the river without a proposal or compromise. the sfpuc -- [inaudible] >> remember, the water board has the authority to require higher instream flows but not to compel nonflow measures. the plan incentivizes nonflow measures. the salmon are barely hanging on -- >> thank you. tim eckenburg. >> chair, my name is tim eichenberg. i'm a rate payer and have been a rate payer in san francisco since 1984, so i've spent a lot of money helping you with your
salaries -- your per diem, in any case. also, former chief counsel for the bay conservation development commission, vitally interested in preserving the bay. i encourage you to support the tuolomne river trust proposal to voluntary release its share of 40% unimpaired flow. you have nothing to show but your good faith to the districts. i ask you to enter into e negotiations with the districts to see what can come of this proposal. i think this staff report inadequately analyzes your impact and cost to it. i don't think there's any downside to doing it. if it's voluntary, you can increase the flow in case you need the additional water. right now, you do not need the additional water, so i would encourage you to please support
the tuolomne river trust proposal. thank you. >> thank you very much. karen hardwell. >> karen harwell from pa palo alto, california, and i'm the director of a program called exploring a sense of place, initiated in 2000. and it's been available from preschool, k through 12, college students, and adults. and we base it on leopold's challenges that we've migrated to all the world that we know and we belong, and we get in new places, and it's hard to get to the bioregion in which
you now live and relate to it in a mutually enhancing way. and we said, well, we'll create that program. we've had waiting lists, we've published this book, which has 3,000 copies and we're now down under 300. it's being translated into china -- into chinese in china right now, so it's filling a need, and it's just about getting to know and letting yourself be imprinted. and i want to reaffirm you for your mission statement in which you say the values and environmental and community interests and sustainable resources entrusted in your care. that's moving to me, but as i work with young people, they keep saying, but what are you doing?
what are you doing? how does this look? what changes have been made? because they're carrying that anxiety about climate change and crisis. and i just really want to emphasize that the fish -- it's not just like oh, that's just for fishermen, no. the fish are subject -- [inaudible] >> thank you very much. i'd like to call the next speakers. bar barry gonzales, and mark
waller. [inaudible] >> -- according to family, he was the first family to marry ohlone indians. we have to think of the rivers of what they once were in california. right now, we have this proposal that the state water resource control board worked on for years. they voted on it. all the water districts knew that they were working on flow controls. and then, for them to come out and say we don't know how to do it after it was voted on, i can't quite believe it. if i was a contractor, and i knew a new fire protector was coming out, and then, i started building houses, and i used my old one, then, when the new one came out that would work much bett better, i sued them, i don't
think i would get very far. so san francisco should have been better prepared for these flow increases at least a year ago. to say we're still working on it i don't think is excusable. thank you. >> thank you. barry nelson. i'd like to make four points about voluntary agreements. the p.u.c. has made clear your interest in voluntary agreements. i've been involved in quite a number of voluntary agreements. they're hard, and they take a lot of work. i'd like to make four points. first is with regard to the proposal today. the only way voluntary agreements are going to work is if water agencies step up and push, so this is a great example of that. you have an opportunity to demonstrate your commitment, to demonstrate real voluntary improvement for the bay-delta.
i'd urge you to work with your staff to make that work. secondly, i spoke earlier about the new biological opinions. they're a disaster for the bay-delta and the san francisco fishing industry. they're clearly going to set us back. there's another reason. your policies about voluntary agreements say very clearly that you direct your staff that your voluntary release will actually improve the bay-delta system. with these new biological opinions in place means that water released by your agency is at risk of being gobbled up by other agencies. i urge you to take seriously the potential to oppose these biological opinions which are a threat to your ability to implement real voluntary agreements. third, it would be helpful if
you could ask your staff to release the new proposals. we've been told there are new proposals of water management in the bay area delta. and finally, and just very quickly, we urge you to not ask for more delay by the state water board. we've had years -- >> thank you very much. michael wallburton. >> i want to say thank you for your service, as well because you have your hands full with this agenda item. my name's michael warburton, and i'm executive director of a nonprofit educational and advocacy organization called the public trust alliance. and our objective or mission is
to call greater attention to the public trust doctrine, which has always been a part of our law. as a matter of fact, it's been a part of our law during the entire water war, and i lost -- well, i'm coming here as a californian, and as a californian, i have standing to defend and to bring up the public trust. you have a legal obligation, which is far greater, and that's to protect the public trust whenever feasible. and our organization has been busy for the last ten years in front of the public utilities commission because one of the parties of the utility actually said it was an emergency, and
they've been arguing for something that there isn't, which is a due process right to be unreasonable. there's a legal obligation to be reasonable, and it's part of the constitution, and the san francisco public actually understands that. and voluntary agreements are great, and we support 100% an honest voluntary agreement, and we support the proposal of the tuolomne trust. thank you. >> thank you. is there anyone else that would like to speak to this topic? seeing none, the commission is going to take a ten-minute break. [gavel].
>> we will continue the meeting. i believe that some commissioners would like to speak on the item. >> well, i just first of all want to thank so many people coming out and speaking on this issue. it's such an important issue, and also reminding us of our role as commissioners to serve in the public good and in the public trust, so i want to start with thank you. i know it takes a lot of time and effort to show up, so we really appreciate that. so, you know, i would like to continue and elevate this conversation. as you all know, we spent a significant amount of time passing a resolution that had some specific instructions, and i, too, feel like those instructions and directives have not produced additional flows in water but also some specific results that were
asked for in that resolution. so i would like to pull that resolution back up before the next meeting and weave more into that resolution. i'm not sure that that's the place to talk about the federal question and the new biological opinions that have just come down or if that's a separate resolution, but i would like that to be considered as a resolution by this commission that both addresses as suggested, you know, our opposition to those new biological opinions as well as our support for the state position in opposing them and whether, you know, we can talk about supportive injunction or what have you. we'll turn to counsel, but that should be a separate resolution and i'll ask for thoughts on that.
lastly, somebody spoke to this, as well. i have asked this in a couple of different ways, and i want to reask the question. if we live with our current drought design scenario, and we are mandated or voluntarily decide to go with a 40% flow regime. what would it take for us to meet that demand? i still feel like i have not received an adequate response to that and want to understand with specificity what that means with regards to supply, what it means with regard to our regional partnership with bosca, and what it means to our current water tap. so that's sort of a question that i would like to, again, elevate, and i'm hoping that this will appear on the next commission agenda item hopefully in the form of a resolution or two but also with some response to that very question of how to meet the
demand as currently we understand it. thank you. >> any other comments? >> yes. >> go ahead. >> can i just respond to that? maybe not the next one, because we have a closed session with the board of supervisors, so maybe the following one. >> sounds good. thank you. >> very short. i just want to support francesca and her comments. >> and i just want to say, and thanks, everybody, for coming to -- be as dill vent as you are on this particular issue. -- diligent as you are on this particular issue. i'm new to this commission, but right now, i'm incredibly impressed with the staff that's had to manage so many different parts that are there. i think there was one gentleman that said there are ongoing evolving studies that are going on, whether it's because of
this issue or because it's many issues that manage our system, and i'd like to know more about how that applies to the tuolomne. but at the same time, it's a piece that -- i just needed to mention that as perspective on the public comment that i heard today. >> good. any other comment? any other public comments? seeing none, next item, please. >> clerk: item 6 is report of the general manager. >> good afternoon,
commissioners. the first item is the annual financial statement. >> good afternoon, president and commissioners. my name is nancy hom, deputy chief financial officer. i'm here to present the 2018-19 financial statements. i'm joined by lisa avis, who will provide the second part of the presentation and provide more details regarding the financial statement audit and the results of the audit for fiscal year 18-19. i'm pleased to report to the commission that the p.u.c. issued its fiscal year 18-19 audited financial statements on december 9 for the water enterprise, and on december 23,
2019 for the wastewater enterprise and hetch hetchy water and power for cleanpowersf. these three financial statements are available for the public for download and review at the s.f. water public facing website. the audit objectives of the external auditor were to achieve confidence over the accounti accounting policies, and presentation of the statements. no notable highlights include that there were no material misstatements in any of the statements. management did resolve an internal control deficiency related to accounting recognition of construction in progress for a complex transaction involving another city department. this accounting transaction was within the wastewater
enterprise financials. the management team continues to be committed to excellence in transparency in financial accounting. we also thank kpmg for the professional courtesy of their audit team and the timely completion of the audit. at this time, i'd like to introduce lisa avis, managing director at kpmg who will deliver the presentation of the audit results. thank you. >> thank you, nancy. thank you, board. as she said. my name is lisa avis. i'm managing director of kpmg. our clients have the option to receive these communications in a letter, but we appreciate the opportunity to be here in person. so i believe you've had the
opportunity to receive these slides in advance. it's a pretty thick packet, so i'm not going to go through each slide one by one. as miss hom stated, we audited the financial statements for water, wastewater, and the hetch hetchy water and clean power, and as part of our audit, we have a very extensive set of procedures that we use to determine if those financial statements and the notes provided the accounting guidance that they have to follow as well as the regulations that they have to follow. the financial statements that p.u.c. management prepared received a clean opinion or an unmodified opinion which means that those balances complied with the guidance that they are required to follow. now in preparing those financial statements, it's not uncommon for management to come across some adjustments to the numbers that they originally present to us, and then, those adjustments that they find,
they make a determination as to whether or not they are material. so for example, on slides 8 through 12 on the handout that you have, there were some adjustments that were calculated for the pension and oped balances. now pension liability was first put on the financial statements back in 2015, and opeb was in 2018, and those are estimates. you're projecting how long people are going to live, who those benefits are going to be, and each year, there's factors -- as new information is available, there's factors that adjust that liability up or down. now this year, there were some factors that were excluded from the preliminary calculation, and p.u.c. evaluated those numbers. they determined that they weren't material to the overall financial statements. we agreed with their analysis, and so those numbers are disclosed in the presentation. there were one more significant
amount that the p.u.c. management identified, and they brought it to our attention, and you'll see a discussion of that on slide 14. so back in 2016, p.u.c. entered into an agreement with another city agency as it relates to the central shops activity. that took place with wastewater to expand their current operations. now due to some lack of communication among the departments, it results in some construction being double booked on the wastewater financial statements. so as a result of that error, a material weakness letter was issued to p.u.c. related to internal controls over that specific transaction. i do want to point out again that they identified this, they brought it to our attention. they wanted to create transparency in the financial statement, so they elected to restate the prior year numbers to accurately reflect what that number would be without double counting those assets. i also want to point out that
it is a unique transaction. those don't happen very often at p.u.c., and they are currently working on a corrective action plan to have oversight over these types of things going forward and to make sure that the accounting groups are involved in those sort of discussions. the last thing i want to highlight that i am required to highlight is just the responsibilities as it relates to the overall audit. even though we come in, we do our extensive audit procedures, ultimately, management is responsible for the numbers in, and management is responsible for the oversight over these financial statements, and our policy is to conduct these audits with independence. do you have any questions? >> i have a question. >> yes. >> on slides 15, 16, 17, 18,
and 19. >> yes. >> it seems in every enterprise, there was an uncorrected audit. >> that is correct. >> i thought it was just in wastewater. >> no, wastewater resulted in the corrected one. so the uncorrected misstatements as it relates to the pension and opeb expense did relate to each entity. >> i see. okay. that was my only question. >> okay. >> i guess why? why did it relate to each enterprise? >> because each enterprise has employees that work on those different funds, and the see allocates a different portion of the city's pension and opeb liability across the city, so each department had their own little piece that was allocated. >> of uncorrected? >> of uncorrected, correct. >> thank you.
>> is that the end of the -- any public comment? >> okay. the next item is the quarterly audit and performance review. who's going to give that? oh, charles pearl. >> good afternoon, commissioners. charles pearl, deputy chief financial officer. this item is the quarterly update related to our audits and oversight work that's happening across the sfpuc. as you know, we have a number of audits going on at any one time, you ju time.
you just heard about a few of our financial statement audits that just wrapped up. i do have a few slides, so if i could have the overhead, please. commissioners, this is our audit plan. we have 24 audits that are underway or planned to be underway. eight of them have been completed. eight of them are currently in progress, and then, we have another eight that are planned to come up between now and the end of the fiscal year, so it's quite evenly distributed in terms of how many we've gotten through so far. in terms of the prior quarter -- so again, i'm giving you an update on activities that are through december 31, so this is our q-2 or quarter two update, you just heard about the financial statement audits which were wrapped up in december, so those are three of the four audits that were completed during that quarter. and then, the fourth audit is a construction closeout audit, which that information has been
provided to you. there were a couple findings for us needing to tighten our closeout procedures, and we will make sure we're following up with the infrastructure team to make sure those things happen. in terms of audits that are coming up this quarter, we have a couple things. one of which is a review of how we're doing our hiring and looking ways at speeding up and improving our hiring processes. that is currently underway and looking to improve this quarter. we also have a confidential report that is wrapping up and associated with our internal and external network security, and that is being done in a confidential way, and we will schedule an offline closed session with you as commissioner moran has requested to brief you on that
assessment. there also are two financial audits that are wrapping up this quarter, our wholesale water contract or our wholesale revenue requirement agreement in fiscal year 2018. that audit is due to be issued -- actually, it already has been issued this past month. and then, we have a political activity compliance assessment which is -- it's an annual citywide assessment. this particular review is looking at s.p.u.r., and the various activities that departments had with s.p.u.r., just to make sure the contracts and agreements with that agency don't violate any political contributions or ballot initiatives requirements. we don't want to see any support of political candidates in any contract moneys. that's the point. upcoming, we have the
comprehensive financial report, which you've just heard about the financial statements. we will package that up into something called the comprehensive annual financial report. you may hear the acronym cafr. and then, underneath that is the conclusion of the report. this is the conclusion of our reporting annually, and that is due to come out this quarter, and we will share those with you. lastly, just a summary. we have two audits that are open with audit recommendations. as this table shows, we have five open audit recommendations. over the past quarter, we closed out two that were related to that first audit, the oliver dequarry silva audit that we briefed you on maybe two quarters ago. that audit had six recommendations. we closed out two of them. we have four more to go.
and then, a new audit is this closeout procedure audit that i mentioned earlier that has one audit recommendation, and we're looking to wrap all of these open recommendations up before the end of the fiscal year, and that's our goal. so with that, i'm happy to take any questions. >> i have a question. so are these internal audits basically or -- >> it's all externally facing, so these are -- sometimes it's our controller's office city service group. sometimes it's an external auditor, like you just heard from kpmg. it's a variety of thing zblz and are there any other groups that we have contracts with like s.p.u.r.? >> we have a variety of agreements with a number of nonprofits, yes. >> like s.p.u.r.? >> well, we have a number of agreements -- you know, s.p.
s.p.u.r.'s a very unique agency. i don't know if the director has any specific examples, but yes, s.p.u.r. is a very unique agency. >> what's unique about it? >> s.p.u.r. speaks to the economic development of the city, but the audit is looking at s.p.u.r.'s agreement citywide, so it's not just the sfpuc. >> so also, as you know, that the controller is looking at all profit stuff, so we're cooperating with the controller so all the other nonprofit stuff. >> that's right. >> well, i just -- having been a supervisor, i dealt with
s.p.u.r., and they were very political. that's why i'm glad to see -- that that's why it kind of concerned me, and that's why i'm glad that we're making sure we're on the right side of it all. >> that political review is being done by the city service auditor department and will help s.p.u.r. be responsible to that. >> we will help s.p.u.r. be responsible? >> yes. so the audit is with s.p.u.r. and the city services department, and we are supporting that review. >> oh, i see. thank you. >> is there any public comment on this item? >> all right. the next item is the quarterly budget status report. >> hello again, commissioners. charles pearl, deputy chief financial officer. this update is our quarterly
budget report. again, we bring to you a quarterly update of our financials across our agency, and this speaks to our comparison of our operations as compared to our budget. sorry. in terms of the general observations for the last quarter, again, this is q-2 through december 31. we have net positive results for water and our wastewater as well as clean power operations, and i'll describe a little bit more about what that means in a minute. we do have lower revenues in our power enterprise, however, in our water and clean power operations, we have revenues that are higher than budget. waste water is coming in at projections, any way, for the
end of the year. so as you see there, we have water sales and connections budget that are just over 8 million, 8.5 million, and power sales revenues a little over 6% or 10.7 million below budget. financial projections are expected to exceed or meet or policy by the time we get to year end. so in terms of water, again, our water sales revenues are slightly above our budget, and we do have some cost savings. so as compared to what we described to you for q-1, we have about a $20 million improvement in our overall operations. most of that is coming from the water bonds refunding that you may recall that we did earlier this year, but we do have slightly stronger water sales, as well. you'll see the sources there,
about 8.5 million or so above our budget both as it relates to our whole sale as well as retail sales. those sales are slightly above budget. water sales are trending higher than planned. you may remember at the end of last fiscal year, fiscal year '19, we had some weakness, meaning our water sales were below budget. that has reversed now in the current fiscal year, so we have water sales that are above budget in the fiscal year, so we're expecting that to continue until june. >> why is that? do you know? >> i think a lot of it has to do with the weather. we've had a dryer than normal climate. i'm not pointing to all of it being outdoor related, but i would imagine a good chunk of it is that. as you can see, the larger variances on their outdoor sales, and they have a larger portion of their sales being outdoor related.
and then, on the other other side, you'll see the variance. much of that is water connection revenues. we have more customers connecting to our system. that's evident with all the development work that you see, as well. then on the uses side, you, as i mentioned earlier, we had a very large refunding, water debt service refunding that provided about $15 million in savings to the current year. so combined with that savings and the additional water savings, we have about a $20 million improving net variance or net result for the water enterprise. wastewater, we are projecting, as i mentioned, revenues to come in pretty close to budget. we have -- similar to what we said we have in the first quarter, we have some additional revenues on the uses
side but pretty much at projection for our wastewater sales revenue. and then, on the power side, we have a slightly weaker net position happening in the hetchy enterprise. we have about $6 million in lower power sales mainly due to lower than projected sales volumes, meaning that what we included in our budget when we built our budget in fiscal '20 almost two years ago predicted a certain level of sales revenue, and the actual sales are below that plan. so that's the majority of the variance that you see there. we projected a selling of electricity that's not occurring. just as an aside, we have been seeing this for two years. we do our budgeting for two years. we wanted to make sure that as
we were building our budget for the next two years, that we were adjusting our revenue projections, and everything that we presented to you as a part of our budget hearings adjusted everything down to current electric sales levels. so in other words, if we have a new customer, that will be a positive variance once we get into next year's budget, if that makes sense. we have some savings in the capital projects as well as debt service. that's partially offsetting this lower-than-expected power sales revenue. and then, on clean power, it's a stronger story here. more than -- we have about $4 million more revenues than what we had shown you in q-1. overall sources are almost 25 million above budget. that's a function of bringing on more customers. more customers than planned are
actually in the supergreen product, so net-net, this is a stronger revenue story, and that's causing us to fund our reserves faster, which is also another good story. and then, also, we have some salary savings in our unspent general reserve, which is also helping net-net our fund reserve for clean power. and then lastly, in terms of our key ratios, these are the ones we show you each quarter. fund balance reserve needs to be at least 25% or higher, and you'll see all three enterprises meet that threshold, and then, we have indenture and current ratio measurements. the indenture basis has to be greater than 1.35, and the current basis has to be greater than 1.0, and we're higher than that on all of those measures. i'm happy to take your questions. >> questions? no? >> thank you.
>> are there any public comments on this item? >> all right. the next item is the hetch hetchy capital improvement program quarterly report. >> good morning -- good afternoon, commissioner. my name is susan howell, and i'm here for katey miller who is the acting director for the water capital improvement program. unfortunately, she's out sick today. so general manager, should i start with water enterprise first or hetch hetchy. i thought it was water enterprise. >> water. >> okay. water. great. thank you. okay. today's quarterly update covers the period between october 1 and december 31.
>> great. thank you. >> so there are seven projects that i will highlight today. so the alameda creek watershed center, which is part of the sonoma long-term improvements, we awarded the construction to s.j. emerald. so on december 10, notice was expected to be issued around late february to early march
this year. next one is the central valley water treatment plant project to provide design and construction support, followed by the board of supervisors approval. next one here is the -- [inaudible] >> -- which is now currently in planning and environmental stages. [inaudible] >> -- and the second one is the inundation assessment and probability maximum flow study. requests for proposal to hire consultants for the dam -- for the dam design was issued during the reporting period and anticipated issue and c.p. in this current quarter. so this photo shows you the project staff walking inside a spillway.
this is a photo for another dam, which is the san andreas dam. during this reporting period -- [inaudible] >> so for the san francisco west side recycle water, currently, there are three contracts ongoing. contract a is for the treatment facilities. b is for the pump station, and d is for the irrigation system retrofit. and c for the pipeline has already been completed. so construction work for contract a and b are both ongoing, and for d, which is not shown here. a bid document was advertised in december. we will be receiving bids in this quarter. san francisco groundwater supply has two phases here. as reported in the last quarter, phase one construction for all the full well stations
were completed. currently, we're finishing up all the closeout deliverables. and then for the phase two, construction work for it is ongoing. so there are two pictures on the right showing the landscape on the north lake well stations, and the bottom one is for the sunol wind station. the last one here is the 22nd street project. mitchell construction is the contractor. they began construction to replace the pipes that were almost 150 years old. the pipe that we are using is the earthquake resistant ductwork iron pipe. it has no documented failures in subsequent seismic events. a photo here is actually showing our contractor what working with a representative
from japan between the block of fair oaks to hemisphere street. so that concludes the update. i'm more than happy to answer any questions that you have here. thank you. >> all right. any public comment on this item? you wanted to speak to this one? >> okay. if you want an update for the hetchy one? >> if you're going to do both of them, okay. >> okay. okay. so let me continue on with the hetch hetchy one. this one is going to be very quick. i'm just going to focus on three projects. first one is the mountain tunnel improvement projects. second one is the 2018 march
storm event emergency repairs and interim improvements phase one, and the last one is lower cherry aqueduct rehabilitation. for the first one, mountain tunnel improvements, it reached a major milestone on november 12 where the commission adopted the ceqa declaration, approved the project and also approved the bids for construction, and the team is currently evaluating four bids. for the next one, the 2018 march storm event emergency repairs, during the quarter, contractors substantially completed the downstream flood control berm, and we're
expecting all projects to be completed in this quarter. in the meantime, staff has also initiated a project for the long-term, which includes moccasin lower dam, moccasin upper dam, and other priorities, and these will be proposed as part of the hetch hetchy ten-year plan. and the last one is the lower cherry reconstruction project. so final construction was completed on november 25 by k.w. emerson. so with this, this conclude the presentation for the hetch hetchy update, and i'm more than happy to answer any questions you have. all right. thank you very much. >> thank you. >> good afternoon, commissioners. nicolle sandkulla. i will shorten my comments that
i plan to give today, so i'll address both the water enterprise and the hetch hetchy quarterly c.i.p. reports in both of these cases, we're pleased to see they have changed significantly based upon your recently adopted c.i.p., which is great news, but that also means there's a lot of changes to see. a couple of things still need to be incorporated. so like you get them on thursday, we also received them on thursday. they are still under review. we've scheduled our staff to go through it, questions and answers, and my plan is to make sure we get the answers that we need, and i will continue to provide you updates and reported on that as we proceed forward, but i wanted to just let you know that we are closely watching these. thanks. >> all right. the next item is the sewer system improvement program -- actually, i should say major project update. this is an update that we will
feature our biosolids project. so with that, i'll turn it over to steven and carolyn to give you an update. >> we're sharing some important views, so i'm going to ask us to make sure we slow down and do this well, but we've been featuring significant projects on a regular basis, and we last presented an update back in july of last year, and at that point, we talked about the construction management general contractor, and we also provided an update as we were fast approaching construction at that time. so some time has now passed, and construction has now started. demolition is underway, and you may be curious with the latest
update on what is happening with this, the largest and most complex project in what's happening in the program. so today we'd like to share how the project has evolved and why, and also to go onto explain how we're adapting to maximize working under the cmgc delivery model to the project's advantage. i'd like to introduce carolyn chiu who's been with the project since inception. >> good afternoon, president caen and commissioners. i am carolyn chiu, president for the biosolids project. at the time of our last update in july, we were in the midst of evaluating the project's 95% cost estimate. today, we would like to provide you an update of that effort, where we are, what we learned, how we responded, where we are now, and how we are moving forward. starting with where we were.
as you know, the much-needed biosolids project is to replace the aging solids digesters and the facilities at the southeast plant. here are the objectives we established at the start of the project. we want to emphasize that these objectives are still our commitment and they have not changed. here's the chart we showed you last july of the construction costs. cost is shown on the y axis. the x axis shows the construction cost estimate. the green and yellow dash lines indicate the range of estimating accuracy at that particular stage. starting with the 65% estimate, we've brought in three cost estimators to provide independent estimates which the three estimators would work to
reach a single estimate. m.w.c. came on after completion of the 65% design. and now, what we have learned about the 95% estimate by t. by the 95% estimate, the cmgc has become fully engaged in the project. the construction costs at the 95% design phase came in at $1.7 billion. the initial cost estimates ranged up to $2.2 billion. this cost is significantly higher than the 65% construction estimate and the baseline budget.
>> did the range start at 1.4? >> i'm sorry? >> in the square, you have the range -- you have 1.7 to 2.2. >> correct. >> didn't it start at 1.4? >> well, the 65% is where we started, and then, the range -- >> 35%. >> 35, she's talking about. >> oh, the 35%, the baseline budget was 925, yes. >> for the construction, but the whole project was 1.2 something, right? >> the project budget at the baseline, at the 35% was $1.276 billion, the project budget. >> and the -- >> and i don't understand this range. what is the 1.7? >> oh, okay. i think as i said, the blue line is actual constructions costs, and the dashed lines are that level of accuracy associated with that particular design.
for example, like, a 10% design phase, you know, the level of accuracy is greater -- or not as great. you know, there's a wider band, and you see that that band narrows as you get to the 10% to the 95% estimate. >> is that what you're referring to, the -- >> i'm referring to the blue square with the range in there, and i -- where's the -- >> well, i guess that blue square, what i'm saying is that 95% cost estimate, since we had three cost estimators, those three estimators for the 95%, their initial estimates ranged on the low end from $1.7 billion as high as $2.2. >> so it's the estimators. >> yes, yes. i'm sorry. i didn't understand your question at first. so apologies for not getting that on the first. >> so this is actually the part
where i stepped in when i started last november. it's an understatement to say that we were all shocked, that even though the project scope and the fundamental nature of the project had not changed, the number had changed so much on the charmt. the key change that happened during that time chart was we engaged with the contractor. we determined that the project at that stage was unaffordable and something needed to be done. so the project was on the same, and the team was empowered to turnover every rock, to look at how objective was being handled in the project, how it was being met, and to bring the
project back to track to something that was being delivered in a sustainable manner. i'm not shocked that the system was really a catalyst and to bring the team back together in a renewed effort to work this problem. it's actually a benefit to have the contractor on board at this stage to help identify construction risk and then to quantify on it, which is exactly what's happened, to put a dollar amount, to is he with quantify it. under traditional design build models. we don't see that quantified until later in the project. caroline will go onto describe how we responded to this, how we dissected the difference in cost and how we adapted to get the project back on track. so although this is tough news, there is some positive news
coming, so please bear with us. >> how we responded. here's the outcome of our deep dive into the cost estimate. what is shown here is the percent increase from the 65% to the 95% inquiry. the cost increase can be attributed to soil conditions, design projection, sight logistics, and lastly, market conditions. >> so i just want to point out that we looked at the 65% estimate and the 95% estimate, and we said why were they so much different? and so this -- we put them in these categories. >> so soil conditions, the orange slice. with the cmgc on board, we obtained a better definition of
site conditions. although we did some preliminary investigations during the early stages of design, we did not have control of the project site yet and had limited access. so based on this recent field data, we found out that more soil needed to be excavated than originally presumed. design progression, the blue slice, now with the design being 95% complete, there is more details to inform the cost estimate. there is significant increase in quantities beyond what we assumed at the 95% stage. the green slice, site logistics, means and methods, this is site constraints. due to the multiple projects going on concurrently alongside the construction of the wastewater treatment plant. i think some of you commissioners saw that when you visited the site a few months
ago. our requirement for the contractors to park off-site resulted in a significant cost increase due to the loss of worker hours. for example, a worker could loose lose up to 45 to 60 minutes commuting from the parking lot to the construction site say one to two miles away. lastly, the largest source of the cost increase, the red slice, given the size of the biosolid project, market conditions are changing. for example, with respect to labor, there's currently a high demand for construction workers. there is a record low unemployment rate at less than 2%, and then, if you couple that with the billions of dollars of anticipated future work for predicted in and out of san francisco, there are also increases in wages and benefits since 2015. the prevailing wages have
increased, and in our conversations with the people who built the new warriors stadiums, we were informed that they paid premium. we will be likely facing that similar challenge. >> didn't they have to do that because they wanted it done quickly? wasn't that the reason? >> not only did they want it quickly because they had a hard deadline, but the subs that they've identified had so much work that they wouldn't even get to it in time, so they -- they paid a premium just to get in line and to do it early, and that's the same thing that we're facing, is everybody is busy. you have to pay a little bit more, and i think we talked about it last time. some of the recommendations that we receive it just wait, you know, and i was like well,
you know. so you've got to kind of wait until the demand -- you've got to kind of balance until the demand is down. >> i'd like to weigh-in on this also when you're talking about the market piece especially when it comes to costs for labor and contractors. >> sure. >> you talk about wages, and you talk about increased wages and what have you, the wages of construction workers are not going up by much, 3%, 4%, whatever that is. so it's not there. and to use the analogy at, say, the chase center, just like many major projects, a developer, you know, usually a private developer, will have a schedule that he or she or the corporation wants to have done, and if you don't meet that
timeline for whatever reasons, then, the general contractor will have severe penalties on there. so they will, in order to not get the penalties, put people on overtime and say i want you to work on a saturday or sunday and that's been going on since the beginning of time -- at least since people were paid to work. so with that being said, without going into the details, part of waiting in line is not the wages of workers, it has to do with the demand for the contractors of which they say boy, they need me really damn bad, and they tell their estimators to put another 10 or 20% on the estimate. so i'm just pointing out that the cost of labor is not keeping up with the cost of living by any means. there's other people that are
getting rich and it's definitely not the workers, so i want that on the record >> thank you. thank you for that. also, the 29%, the blue slice, may we go back to that. could you go over that again. >> the blue slice? yeah. so at 65% design, we make assumptions -- like, the design assumptions of what's going to be a 95. so our assumption and what we assume for allowances that the 65% were too low based on what actually ended up coming in at the 95% stage. >> well, when it says design -- so you're not talking about the digesters, you're just talking about who did the design work? >> well, basically, the digesters are part of the design. >> so i think a better way to illustrate this, and i mentioned this before. typically, you go to the commission, and your drawings
are 100% done. what we're seeing is at 65, there was still a large portion of the work, especially the detail work of detailed design not done. so, i mean, how many pages was different from 65 to 95? we have a large amount of detail information that was unknown, and that's where a lot of the accuracy of your estimate because at 65, they acknowledge that you don't know all this stuff, so they put a range in to try to cover that. and so we're just highlighting that 29% or whatever the number is on your chart was due to increases based on once we got a 95% estimate that allow the quantities we assumed at 65,
you know, exact. >> give me an example of what you mean. >> for example -- >> the quantity -- >> okay, so, for, i guess, taking it on at the 65% level, the estimators get a baseline design. i think 65,000 pages of drawings and 95% of -- percent of specs. so remember, i said the quantities increased between the 65 and 95. so for example, we found the process piping doubled between what we saw or assumed at the 65% stage and then what actually came out when we saw the 95% package. >> oh, because the design -- >> it got more details, right. you gt a bettot a better sign you're talking about in the design details.
>> i passed that, and the drill was just oh, my goodness. the drill bit, i look at that, and it's really amazing. thank you. >> so -- >> keep going. >> as steve mentioned earlier, we had to bring the cost down to a more affordable level. for this cost reduction effort, i mean staff from the p.m. side, construction management, cmgc, we looked over the project. over october and november, we brainstormed, and everything was on the table. we focused on specifications, logistics, startups, etc. over 200 items were identified. we kept the following considerations in mind as we
were evaluating these ideas and whether they should be advanced. does it maintain the project's objectives and level of service? does it allow the project to continue without -- does it allow the project to continue with construction without pause? what is the level of redesign needed? what is the long-term impact to wastewater enterprise operations and maintenance? and here's a summary of the cost reduction items we propose to advance. the cost reduction effort gave us an opportunity to look at the decisions we made over five years ago during the planning stage under different drivers and conditions. for example, starting with the third bullet, improve odor control strategy, we are maintaining our commitment to have no odors at the fence line, but we are proposing a new strategy that allows us to do that more efficiently with a smaller odor control system.
in this revised strategy, we will enclose or cover the equipment to contain the foul air near its source, allowing the odor control system to treat a smaller volume of air rather than an entire room. this changed the environment for the operator but at a decrease in capital cost. the fourth bullet, rethinking the buildings as part of campus improvements. this is an opportunity to reevaluate the maintenance building proposed in the biosolids project and include them in a broader site wide evaluation of future needs. now the last bullet and our largest potential cost savings is to consider a different biogas end use.
during or cost reduction effort, we realized that energy recovery may not be the best use of our biogas. instead of producing heat and power with the digester gas, we should consider making vehicle fuel. making vehicle fuel has financial benefits and it's the potentially highest benefit for our vehicle fuel. it's also a cleaner option from an air quality perspective. we are evaluating this alternate biogas and use with outside experts and with staff from our power and wastewater enterprises. we realize this is a change from our normal plan operation because vehicle fuel is not part of our core function at the plant, we will also implement evaluation with a
private public partnership through an outside entity company who has done this before. >> so this is remarkable that you were able to do this. so how much are we saving? >> well, potentially, the energy recovery is close to $125 million. so if i eliminate, based on those new facilities in the asphalt plant and convert to this vehicle fuel option, so that whole energy recovery goes away, and there's also some side benefits that if that goes away, i have added space for staging and parking. so that productivity that i lost because of the site constraints, it addresses that, as well. so all in, it's probably 125 million of construction costs now. >> and then talk about the environment and the community because we -- >> yes. well in our original energy recovery, we were going to make
power using a combustion turbine. so with this option, that turbine goes away, so i lost a huge source of pm-10. >> so would we be able to use the fuel? >> you could, except we really make too much biogas to do on-site vehicle fueling. well, we could do some, but i think a bulk of that would be what we call biomethane natural injection, and we inject it in a pg&e pipeline, and anyone with a wheel house can use it. >> so would pg&e be the private partner? >> no. >> they'll just use their pipeline to get the gas -- >> and people have different relationships, but, like, when i was talking about the p-3
relationship, that private entity would be in that agreement with pg&e. we would just provide the gas. >> okay. >> so i have some questions. around the natural gas, i don't understand the whole thing. i do know that methane is a huge climate change contributor, so i would want to learn a little bit more about that process? i understand the benefits. >> mm-hmm. >> from the flaring and the financial, but i just wouldn't want to be replacing it, you know, with a worse evil or even a lesser evil. >> we are on the same page the there. i think, as i mentioned, we brought in some expertise to work with our enterprise staff
to answer many of the questions that you just asked, but we go in with a full underistanding f the pluses and the minuses, and the whole picture, as well. >> so if you wouldn't mind keeping us updated as far as what the conditions are. we want to be the utility of the future and don't want any step back with our system. >> no. once we find out more through our evaluations through our many updates to the commission we'll definitely include it as a topic. >> thank you. i also just want to say i appreciate how you went about doing all this, i really do. i think that's very commendable, and thank you. >> it's brilliant. >> i had quite a team, i must say. i can't take all the credit. so where are we now with the cost reduction and the proposed changes to the project?
so through our cost reduction effort, we were able to bring the construction costs down to within the expected range that we saw at the 65% stage. we reduced the construction costs by approximately 550 mil kbron, bringi i don't know, bringing down -- million, bringing down the revised construction cost down to 1.2 billion. so now, here's a summary of the construction costs with the overall project costs. you're familiar with this first column, our 2018 sfip baseline, which is the basis of our quarterly reports. the construction cost, the first row, is what i've been talking about through this presentation. the project delivery or soft costs all added up to $1.2 billion with a
construction duration of six years. this 2018 baseline of the biosolids project is based on a 2013 design. the best available information i had to inform the 2018 baseline was at a 35% level. similarly, here's the 65% cost estimate. remember, this is where the cmgc first came on board. next, now, this is our original 95% cost estimate with the cmgc inputs that we talked about, and it had a project cost of 2.3 billion with a duration of nine years. and lastly, and lastly, here's our reduced 95% cost estimate, with the $550 million reduction from the original 95% cost, the construction cost is now $1.2 billion, bringing the overall project costs to
$1.68 billion with the construction duration of 7.8 years. >> is that a firm number of years? >> no. we are -- the cmgc is still finalizing the construction schedule and incorporating all the changes we made as a part of the scope reduction, so, you know, we're hoping there's still some fine-tuning of it, but it is probably -- >> yeah, i was going to jump in at this point and say the cost and schedule numbers that you see at the bottom right are currently the best estimate that we know today considering the efforts that it took us to get to this point, reacting to the shock last year. under traditional design bid build we don't normally share this process, this level of detail at this stage. but under the cmgc model, it gives us the benefit of using this model now. we have an opportunity now to continue to optimize and refine
these as best as we can. you're seeing this as a raw kind of data transfer as the project evolves, and we acknowledge that these numbers are still lower than originally anticipated, but they are somewhat volatile, too. unfortunately, this is not entirely uncommon in these kind of infrastructure megaprojects. i want to respect that we're working on a large live 24-7 facility such as this. we're congested by multiple construction projects all happening in the same space at the same time, and we're within a dense urban environment of san francisco, so we need to put the safety of the construction crews, and the operation staff and the wider community first. so back in 2018, we used a 35% design to set our baseline. assuming that the contractor
could get in, do their job, and get back out. and the 65% with the cmgc on board, we realized that there are a lot of dependencies alongside in the same space, and this ultimately stretches out the schedule, resulting in us having to coordinate more, much more than anticipated. there has been a number of near safety misses at times, and we want to make sure we have a safe project for everyone involved. this is disappointing that we do need to wait to turn the key on this brand-new facility, and it will ultimately cost us more, we're concluding it's a better management of risk in the long run, and we'd rather see these challenges that lie ahead now while we still have time to adjust and ultimately do what is right. so moving forward is our last slide. we're challenged and committed
to continue to deliver this project, to deliver that cmgc model. we're reinforcing but also implementing new tactics to track as the project evolves over time. we acknowledge that things will continue to change on this project with complexity, but the cmgc model allows us to adapt, just like we've really demonstrated in the last four months with this effort. so we clearly want to partner
with you to determine those updates and when that's relevant. this gives us an opportunity to come back to you again as part of that rebaselining effort and with any contract amendments that are necessary at that time. so we appreciate this is a lot to take in at this point, but of course we're very happy to try and take questions and answer them. >> looking at another slice, i think it was another -- >> soil conditions? >> soil conditions slice, so give us an example of some of the issues. i know there's a lot of water underneath there and other conditions going on, given that you're on a watershed or near a watershed. could you -- >> yeah. with the cmgc on board, we did
additional testing, not just additional geotech borings, we did groundwater testing, to see the depth of the groundwater. we saw that the soil conditions along with the graunoundwater,d th gave us a challenge to do the shoring. with that, we were able to take samples. we realized we needed to remove and excavate more soil quantities, but then also understanding the quality of that soil. a larger portion than we had estimated was deemed contaminated soil, so we needed to have a larger estimated disposal fee, so all of that
determined the cost in that arena of site soil conditions. >> and also to point out that area that we wanted to investigate was central shops, and we didn't have possession of central shop. so by that time we got the possession, we had the cmgc on board and stuff needed for testing that we would need to help our design. >> and what about the water table? >> we got a better understanding of where it is because now you've got the contractor that's going to build it looking at the design drawings and understanding the groundwater table, so it give us an idea of the dewatering effort we need to put in place during construction. during a design bid build, you don't have the luxury of doing that late. >> so is it higher? is it lower? >> it's -- yeah, it's higher
than we thought. we already knew because of the area it was higher in chlorides just because of the location, but quantify it, how much flow will be coming out when we're doing the excavation. >> and after the excavation, there will be more pumping going on? >> they will put up the shoring to keep the -- it'll be less because they're putting up the shoring to keep the water out. >> any other questions? what is head works going to be done? >> may i ask with respect to this project. >> no, head works, the other project. >> how, how does it relate to -- >> when you're talking about all the congestion and everything going on at once, and i'm thinking, well, if head works gets done, there'll be more room to work.
>> yes. there is overlap happening right now. head works is underway. the old facility has been demolished, and i mentioned we'we a are -- we're in construction for the campus. a specific example to help explain it, there is some connectivity between the two projects, so it is about timing and sequence to be able to do the job safely. >> so she's asked head works, when will that project be complete? head works, do you have that -- >> i don't know that off the top of my head. >> yeah, we can get back -- >> i can get back to you. >> so it's safe to say you'll have several years where it'll be complete and it's only head works, and that's where we're
working with the contractor to look at maybe at that time, we can start accelerating the effort. but i also want to just point out that, you know, if -- i mean, it is great that we're working as a team with the designer and the contractor because on head works, we're seeing that the contingency that is being used is much less because the contractor knows exactly what it is that we want to build in a traditional method. normally, the contractor gets the design drawings and then has a month or so to put an estimate together, and then, they come -- when they win or, you know, they put a low bid and win, they have a whole bunch of questions about their understanding. i think through this process, everyone understanding exactly what it is we want to accomplish. so as head works, you can see
that we have a lot less as far as, you know, changes and stuff like that. so -- >> i do happen to have it, and the head works facility project would be through construction 2023 and commission starting up and closeout in 2024. >> that's pretty good. >> yeah. >> the reason for think question is we started out a five-year project, and then we were delayed a year, and it was a six-year project. and now, if it's 7.8, that's basically eight, so it's basically three years, and i'm just wondering if we can catch up, which i'm hoping we can do. >> we absolutely have the right model in place to make that as a goal in trying. >> any public comments or
questions? seeing none, thank you very much. >> thank you for your time. >> all right. next item is update on pg&e bankruptcy and city acquisition. barbara hill. >> good afternoon, commissioners. i'm going to take a few items off of my list of things to talk to you about, given the time. barbara hale, assistant general manager for power. i'm going to talk about what's going on at the california p.u.c. and our education efforts. so as we meet, the hearings between the bankruptcy and the california p.u.c. are underway. bill johnson took the stand. the city submitted our questions on friday, february 21, along with about each other parties. the city's witness is a member of the power staff, megan meal.
she's going to be getting questioned this week, and i want to publicly thank meg for her effort and education. this shows that pg&es reorganization is not neutral on average to rate payers, and it raises other concerns with other things specifically with regards to safety metrics. in the testimony, we recommend that the california p.u.c. require pg&e to provide necessary information in particular with respect to the proposal it makes to regionalize its operations and with respect to safety and
operational metrics, reject pg&es request to preclude issues that have already been vetted at the california p.u.c. in its safety culture investigation. the things that it's asking the commission to not consider have to do with, like, operating and governance structures, things like municipalization or parts of the gas into two separate utilities, periodic review of its permit to operate. these are the sorts of things that pg&e has asked the california p.u.c. not to consider. we think the california p.u.c. should. we also ask the california p.u.c. to disallow pg&e from recovering from rate payers any costs associated with its bankruptcy and emergence from bankruptcy and to require any
other reductions in debt load and assets on hand to help improve the financial strength. for example, that would be targeted asset sales or restructuring of long-term contracts that they have, sales of parts of pg&es business to qualified third parties. those are the kinds of things that we would like to be considered because that'll help with pg&es final strength on emergence. the second issue i wanted to report briefly on is our education efforts. we have enhanced our education efforts with a new website, publicpowersf.org. it's where residents and businesses, interested stakeholders can go to help themselves on more information about activities on power and acquisition efforts. we can report that as of yesterday, february 24, we've had over 1600 total unique site
visitors, over 113 no further questions people ha questions -- 113,000 people have been reached, and we've had 6500 sign ups since we launched the website about a week ago. it's to educate folks about the efforts that we're doing. we encourage everyone to visit publicpowersf.org. thank you very much. yes? >> are we thinking about putting any adds in the paper or anywhere else asking people, telling people about it and letting them know where they can get more information? >> i can take that back to the team. at this point, we've just been focused on the social media realm, but we can talk about whether print or other forms are appropriate. >> well, we can print and tell them to go to the social media. >> mm-hmm.
sure. >> okay. great. >> i'll take that back to the team. thank you. >> any public comment? >> all right. the next item is the water supply planning update. >> good afternoon, president caen, fellow commissioners. paula kehoe, water resources manager. a.g.m. steve ritchie has presented to you before on our water supply planning efforts, and today -- today, i'm just going to provide a brief update on a few of our water supply projects that we've been working on, but as a kwiek reminder, i just want you to -- to remind you all that we're working on 11 regional water supply projects as well as four local water projects.
and the types of potential water projects we're looking at are groundwater, water transfers, recycled water, purefied water, and loss of storage. with our los vaqueros project, this will expand an existing reservoir in contra costa county, and we're working with the south bay contractors as well as the department of water resources. significant effort that we're working on now is with the alameda county water district as well as bosca to simulate a water transfer through the south bay aqueduct to identify if there's any physical or institutional constraints. with our work on purefied water, we are researching additional public education and outreach opportunities to talk to the public about purefied
water and the role within our water supply portfolio, and we're also evaluating the impacts of purefied water and crystal springs reservoir and other uses for potable water in our resources area. in terms of desalination, we're working with various partners in terms of regional desalination. we've created a new group and unit in the water resources to work on all of these projects. we recently hired two new staff and will soon be hiring a manager for this group. later today on the agenda is an as needed water resources contract which will help us
with all the water supply planning that we're currently undertaking. so that's my brief presentation. i'm happy to answer any questions or take any comments that you may have. thank you. >> i have a question. will we at some point see a bit of an outline or a plan for what this group is actually going to be doing? >> yes. the new group will be focusing on the 11 regional water supply projects, and we can provide an update. >> yeah, and maybe what supply that's going to meet. >> yeah, and in the memo that we provided, there is a summary, but we're happy to present that information. some projects, we do know a potential water supply projection. others are still under the feasibility analysis. >> all right. because it's around this early
conversation around how we're trying to meet all these big goal numbers that we're trying to meet. >> okay. thank you. >> thank you. >> public comment on this item? >> thank you. >> i think that concludes my short report. >> next item, please. >> clerk: item 7 is the bay area water supply and conservation agency update. >> i'm actually here for the c.a.c., all day in san francisco. it's my pleasure. so thank you for allowing me the opportunity to be here today. nicolle sandkulla.
the commission and its staff have established a new program to get this water as you just heard from miss kehoe. i emphasize the need for high level dedicated p.u.c. executives with the authority to manage this program and produce prompt results. also, successful implementation will require adequate internal staff, outside budget, and monthly reports to bosca to ensure progress. i have dedicated tom francis to exercise bosca's oversight of this contract.
it is essential for the p.u.c. staff to provide detailed periodic progress reports enabling us to contribute informed suggestions. you received one such report today as part of the work that miss kehoe was just talking about about, and we look forward to working with the p.u.c. to identify and layout the actions taken since the last report, actions for the next 18 months, and critical milestone schedules. we want to be aware of the progress being made to protect the health, safety, and economic well-being of boscas constituents who will pay two thirds of the eventual costs. if san francisco finds that it cannot or will not pay for the program, bosca is prepared to advance funds through a california law sponsored by
then senator jackie speier and will pay two thirds of the final cost, as well. last month, i spoke with you again about the urgency of the p.u.c.s commitment to combat future droughts. we continue to work with the p.u.c. to support the voluntary agreement with the tuolomne river to meet the state's requirements and we're pleased with govern newsom's strong statement in a new program. thank you for these initial actions. i compliment you for the early indications of your
determination to secure new water sources. bosca's also encouraged by the early moved of the p.u.c. staff and by general manager kelly. he understands boscas needs. per prepared to work with you to support new water sources as required. i thank you for this opportunity to speak before you and certainly will answer any questions that you may have. >> i guess i don't fully understand, and maybe we'll hear it as part of my request to get more detail around how we're going to meet all our contractual and supply obligations, and i'm not sure you're the right person to answer this, but i do see you have raised this question that this is going to cost money and needs executive management, and also recognize that we've taken some steps in that direction. i think it would be helpful again as part of that larger
question to understand, you know, what is it going to cost from a staffing perspective? how much water are we actually talking about, so that high level conversation, and what kind of executive attention -- i know that our general manager's paying attention and steve and paula and the team, but, you know, this alludes to -- raises the urgency and importance of it, and i just want to make sure for your part, as you are doing at bosca, that we are looking at those questions and answering them as diligently as it appears you are doing in this memo. >> well, i appreciate your comments on that. i think, you know, water supply planning takes a long time. we are in the early stages, as miss kehoe explained, but there aren't things you need to get specific to to drive them to success, and i think that's what we need to see more of in
that report that she referenced, being able to provide more specific detail, what is th what does that means, what's going to happen in the next three months? unless you push it and try to push the specifics and have someone that's driving the specifics you will not reach the end game. it just won't happen, and so that's what i'm talking about with the leadership is rather than kind of just -- because it's not going to fall in your lap. it is a difficult process, these projects. there's no doubt about it, and i do appreciate the effort the money that you've put out, and the staff on it, but it's going to take additional effort to push this through and the additional staff that we need, as well. >> thank you. i appreciate that. >> thank you. >> any public comment? seeing none, next item, please. >> clerk: item 8 is new
commission business. >> commissioners? next item, please. >> clerk: item 9 is a consent calendar. all items are considered to be routine by the sfpuc and will be acted on by a single vote of the commission. there will be no discussion of these items unless a member of the commission or member of the public so requests, in which case. the item will be removed. >> any item to be removed? all those in favor? opposed? motion carries. next item. >> clerk: item 10, authorize the general manager to execute two memorandum of undering with the port of san francisco for the temporary use of shed and water house basic pier 23 and office space at round house two for an additional total combined annual rent of
2,104,637.40 with 3% annual increases. >> afternoon. rosanna russell, real estate director. i'm mindful of the time at this meeting. i do have a presentation prepared or would you like me to answer questions? >> i think the latter. >> okay. >> any questions to this item? >> no, this really follows a prior action that we've taken as far as disposition of other properties, so i think we've discussed this at some length. >> i'd like to move the item. >> second. >> second. >> any public comment on this item? all those in favor? opposed? the motion carries. >> thank you. >> thank you. next item, please. >> clerk: item 11, approve modification of the san francisco public utility commission's green infrastructure grant program guidelines. >> i'd like to move this item. >> second. >> any public comment on this
item? all those in favor? opposed? the motion carries. next item, please. >> clerk: item 12, awartd agreement number p.r.o. 0166 for an amount not to exceed $4 million and with a duration of five years. >> move the item. >> any public comment on this item? all those in favor? opposed? the motion carries. next item, please. >> clerk: item 13, award contract number d.b. 130 for an amount not to exceed 3,271,051 for preconstruction services, and if the commission approves the project, increase the amount for a total contract amount not could exceed $59,940,000. >> may we have a presentation on this item, please.
>> and as the person comes up, can i ask a quick question? is this just design or does this include installation. >> approval is for design, and we will come back -- we will return to the commission for approval of the project and construction phase. >> got it. thank you. >> i do not have a presentation prepared. i will do my best to answer any questions. the item is -- request is to approve the award of this project to beta design for the electrical distribution system and as i just mentioned at a later date staff will return for approval of the project and construction phase. the cost of design is $3,271,051. total construction -- design
and construction cost, 59,668,949. >> and in the event that the construction part of the project was approved, would that be awarded to the same contractor? so is this selecting a contractor for the -- >> design and construction. >> okay. so money only for the design part, approval for ceqa only for the design part, but it's selecting a contractor for the whole -- >> yes. >> another piece, does beta engineering self-perform as a contractor? i don't know if that was the same question you asked in a different way, commissioner moran? >> beta engineering has been awarded construction contracts by the city. i don't know if they have ever been awarded a design build
general partner, to sign on behalf of beta engineering, and the second ground of protest concerned, you know, i think to put the protest in context, beta engineering was $16 million lower -- had a $16 million lower bid than the protester, so the protester reasonably scoured every one of the 23 different forms that beta engineering submitted in response to the solicitation, combing it for anything they can do to upend the solicitation, and we received some questions from mr. wong of the sfpuc.
>> so what's before you is a proposal for commissioners to adopt a rate adjustment formula and a framework. i will do the speedy version of the presentation. in this agenda, we'll cover the commission approved cleanpowersf rate setting formula that's in place that you're familiar with that has been in place a number of years now and then we'll cover the proposed rate action. the highlights of the proposed rate action are one that we
continue the proposed rate setting action according to the formula that you're familiar with and that the commission adopted, and that it formulizes current impacts. this is the rate setting formula. it was first adopted in december 2016 with the not-too-exceed rates that cleanpowersf has in place. there are two components of this formula. we start off with pg&e generation rates. we apply a cleanpowersf rate discount. we minus the power rates.
particular rate classes have overall rate equity. one of the things that we want to note is most of our customers are of the 2018 vintage. when we update our rates, that's important because as customers have come on through the phasing process, there air rates are different in the pica van -- pcia vintages. there are customers that came on in 2019 and other years but are a much smaller percentage of our overall customer vintages.
what this means is for the rates and rate settings, in this chart, you can see the sense per kilowatt hour that is dependent on when a customer joined cleanpowersf, and part of the joining of cleanpowersf was our phased enrollment with the majority of customers coming on in 2018. and the thing to take away from this particular graph is the customers that joined cleanpowersf in 2019 are paying a higher pcia, and the vast majority of our customers with 2018 pcia vintages. so this proposed rate action, the highlight really is that we're -- we're asking commission to allow for a formulaic adjustment of
specific rates. otherwise, we would need commission permission if we wanted to adjust rates. the formulaic adjustment would only be needed if pg&e changes rates, and the new pg&e rates are 2% greater than clean power pf pf rates. at the end of the day, that really means like our discount, if it's more than 2% when pg&e changes their rates, we would adjust according to this formula. under this proposed action, one of the things that we're requesting are just making as part of this framework, anyone that we're requesting under this formulaic and framework should be reported to the commission through the cleanpowersf quarterly updates. the specific limitations -- these are the highlights --
sorry. that was a long lead in. under this formulaic rate adjustment where we would use the commission adopted methodology that you've seen since 2016, we would adjust cleanpowersf rates to belower than the annual change. >> okay. does that do it? >> one last thing. this is the -- how would we adjust these rates, just to be very, very clear. the cleanpowersf rates are adjusted to be 1% less than pg&e. then we would adjust that to
recover the full program costs, including the program reserves, and in that second step, we would go back to step one and adjust that by rate increments, at the end of the day, it would mean that cleanpowersf would maintain its financial viability and be financially sustainable. additionally, it woulden jabl tjabl -- enable cleanpowersf to serve its customers on a daily basis. when we started cleanpowersf,
rate actions happened once a year. we came to commission with rate changes one time in fiscal year '17, one time in fiscal year '18, and then in fiscal year '19, there were three rate changes, and the cadence and frequency of these rate changes are happening more often, and this is a way for us to be more transparent about our rate setting and to do so in a real-time fashion to support our program and best support our customers. thank you. >> thank you. >> i'd like to move the item. >> can i have one question, and i'll vote yes. this does basically tie us to pg&e rates with different formulas. so as it goes up, we go up, no matter which piece of the formula gets involved, and t. n and then, there's a cap of 10%
that we can't go higher than. is that a remedial way of describing this? >> it is. we have kind of a third area band width of where we can move, but we're tieing it to pg&e rates and making sure that we overall recoup our cost of service. we're still following pg&e and making sure we maintain the financial health of our program. >> but there is the potential that the pcia question could be completely reconsidered through the bankruptcy courts and whatnot even as soon as june, right? >> there is the potential of pcai changing so far off, and the point of this very specific limitation is what we know of the generates changing and pcia changing, we think that this helps the program and sfpuc to
formulaically adjust without having to come multiple times throughout the year. >> that ties us to the rates going up, and even with that projected blue dot squiggly comes out, but we're tieing ourselves to the rates going up by staying solvent as well as also -- >> and potentially, again, the potential for -- if -- if overall rates were to come down, we would track that within these parameters. >> if. >> if, correct. this rate change assumes that possibility. >> if things go sways ideways ,
it comes back to the commission. >> that's correct. >> this anticipates that you may actually have rates above pg&e rates by as much as 1%. >> that is correct. >> and we have always tried to stay a fractional level below. this authorizes that it could go above. >> that's correct. >> and hopefully, this will be a transitory thing. >> i'll second the motion. all those in favor? opposed? motion carries. madam secretary, could you read the items for closed session. >> clerk: item 17, existing litigation, pacific gas and electric corporation, 18 existing litigation, city and county of san francisco versus pacific gas and electric
company. 19, existing litigation, city and county of san francisco versus pacific gas and electric. >> okay. is there any public comment on the matters to be addressed in closed session? may i have a motion on whether to assert. >> move to assert. >> second. >> all those in >> we will reconvene into open session. the announcement following closed session was that no action was taken. may i have a motion regarding whether to disclose. >> move not to disclose. >> all those in favor? opposed in motion carries. this meeting is adjourned at 5:14.