excuse me. that sfpuc also recognizes that every citizen residing within the greater bay area has and continues to benefit from the use and occupation of the muwekma ohlone tribe's aboriginal lands since before and after the san francisco public utilities commission's founding in 1932. it is vitally important that we not only recognize the history of the tribal lands on which we reside, but also we acknowledge and honor the fact that the muwekma ohlone people have established a working partnership with the sfpuc and are productive and flourishing members of the greater san francisco bay area communities today. so, uh, donna, can you read the first item on this item number three, the summary of the budget hearing questions. so are there any new summaries or questions, um, that have come in or that we have since last friday's meeting? no, there are

no, no, no update at this meeting. okay. so let's get in seeing none um, getting into the meat, um, can we call item four? item four is a water enterprise in hetch water. fiscal year 20 2425 and fiscal year 2526. operating and capital budgets and ten year capital plan. welcome, mr. ritchie. uh, good morning, commissioners steve ritchie, assistant general manager for water. um, and i'm happy to present on our biennial budget at, uh, for the next two years, if i can have the slides, please. so i always have a couple of reminder slides up front, again pointing out that our water system really does span the width of california. so it's a it's a much bigger deal than, uh, other things that, that you've heard, uh, this is the third largest water utility in california. so it's a, a major, major part of the state's water infrastructure. um, and we have customers that are outside

of san francisco, but san francisco is shown here. our water system customers include san francisco, most of san mateo county, uh, the northern part of santa clara county. and up into alameda county. uh, and just for reference here, the darker the blue two, the greater the percent that that community relies on san francisco for its water, for. so, for example, hayward is the darkest blue because they are 100% of san francisco customer. and just south of there is the alameda county water district, which actually only relies for about 20% on us, except when the state water project can't supply them. and then they come back to us looking for more water. so it's, uh, we are a more reliable supply than the state water project, but, um, this is the more routine map that we show of the system. a schematic that includes the major elements. our three reservoirs in the sierra, uh, lake lloyd and, and lake eleanor and hetch hetchy reservoir, uh, and then the

tunnels and facilities coming down from that. the powerhouses, uh, and operating reservoirs, then crossing the san joaquin valley for, uh, again, ultraviolet treatment that provides the treatment for our hetch hetchy supply that is so pure, it does not need to be filtered. uh, then crossing through the coast range tunnel, where it is joined by water from the two alameda counties, santa clara county reservoirs, uh san antonio and calaveras, uh, and then again through the uh irvington tunnels to get into the bay area proper. and then you see the gold area is our service area. uh, and then there are the three peninsula reservoirs, crystal springs, pilarcitos, and san andreas. uh, so we have those eight major water supply reservoirs in our system. and just one note about them is these are all very old dams. the oldest dam in the system is pilarcitos, which was constructed in 1866. and except for the newly rebuilt calaveras

dam, the youngest dam in the system is turner dam at san antonio reservoir, which was constructed in 1964, so that 1964 dam, which is already 59 years old, is the youngest dam in the system. so it's a very old system and that's part of what we're talking about here in the budget, is we have a lot of ongoing repair that needs to be done there. uh, and one other key thing about this is that our system is really storage reliant more than anything else. and this is mostly driven by our water rights and how they've developed over time. and the fact that we are junior to the irrigation districts on the tuolumne river, but that that, uh, large amount of storage is really an advantage for us. and i know we started to talk about climate change, a fair amount that amount of storage is really helpful for us because it is in addition to the snowpack. so as snowpack might be down at different times, we have the

ability to capture water, that is precipitation. as rain or carry over precipitation from prior years. so having a lot of storage is a nice buffer for some of the effects that we will see of climate change. there's much more that the climate change story, but i know that's been a big topic, and i want to make sure that i point out that kind of thing. uh, next i want to talk about the water enterprise organization. uh, you see me here a lot. uh, but i am i am just the tip of the iceberg , as you would say. uh, there are about in terms of official positions, we have about 1100 positions in the water enterprise, guys, uh, and this is the overall organization chart. uh, a number of my managers are here today, and i'm going to introduce them and ask them to stand up at the time, uh, the deputy manager is ellen levin, who unfortunately, is out on leave. so she's not able to join us at this point in time. but she works a lot on bay-delta issues. uh, and for don pedro relicensing issues. so it's a

very key part of our organization in, uh, first is just going from left to right on the bottom, uh, the hetch hetchy water and power. and margaret hanford, actually, you saw just the other day, uh, for an item, uh, they have in terms of official positions, about 249 and they're responsible for the operation of the system, uh, from the reservoirs in the sierra on down through the foothills and across the central valley. the exception is the tesla ultraviolet facility, which is run by the water supply and treatment division. but then the hetch hetchy power project continues on through the coast range tunnel to alameda east. so that's the hetch air and power part of our operation. uh, the next one there, uh, in the upper row, is the city distribution division. uh, that's managed by bill tehan. uh, and we actually that is our largest position, our largest division in terms of staffing that our permanent

positions with 344. and they take care of all of the facilities within san francisco. uh, and, you know, for the for the members of the community, they're the folks in the green and white trucks who are out there every day turning valves or fixing main breaks or doing things of that nature out there supporting capital projects for replacement of things. uh, so that's and these are all i, you know, want to make sure this is also very clear. these are all 24 over seven operations. we don't talk a lot about the kind of heroic work they do, but it really is pretty heroic work. uh, next there is the water supply and treatment division managed by angela cheung. uh, angela manages the division that has 271 positions out of the 1100 positions. uh, and they are responsible for basically, uh, uh, tesla. and then all of the treatment, uh, distribution and storage facilities, uh, between, uh, the, the alameda east and

the city line, uh, there are a couple of other little minor changes to that, but a lot of responsibility and making sure all the water is getting to all of our wholesale customers and into san francisco. uh, and then there's the natural resources and lands management division, managed by tim ramirez. uh, he has about 100 positions there. and their primary responsibility is managing the 60,000 acres of watershed lands and right of way lands that we have here in the bay area, that we are the owners and stewards of. and so that is a big responsibility, particularly on the environmental front, as well as water supply. uh, on the lower line is the water quality division, headed by andrew degrasso. uh, andrew uh, heads the division of also about 100 people. uh but they're responsible for compliance with our drinking water regulation. and they also operate the laboratories that do all of the work that has to be done. again on a 24 over seven basis to

demonstrate that we are providing high quality water to people. and they're also looking forward into new and different, uh, issues that come along over time. that's where we have contaminants of emerging concern and other issues where things that aren't yet regulated, but we all know are beginning issues or issues in the future. uh, and lastly, uh, the water resources division, headed by paula cahill. i don't think paula is here. oh, paula is here today. she just made it at the end. uh, that's a relatively small division, about 27 people. but again, that's where we're looking forward to, uh, new conservation measures and new alternative water supplies that we might need to tap into the future again, this is looking to the future of what happens if things don't work out nicely for all of our existing facilities. how do we make things? make sure that we can deliver water to people on a 24 over seven basis going into the future? uh, so again, it's about 1100 positions. so it's, uh, it's a it's a big, big, uh, part of our

organization. but one that i'm very proud to be able to lead. um, in terms of, you know, what is important in our budget, uh, one of the things that you did in, in november was approved the 2023 water enterprise level of service goals and objectives. uh, those those were, uh, again, they were a step beyond and updating and revising and expanding the level of service goals and objectives that were adopted in 2008 as part of the water system improvement program. and so the categories and the rough objectives there, i didn't want to go through that whole presentation again of all the details, but there's a lot of detail behind these, uh, in drinking water quality, regional seismic reliability, regional delivery reliability in city, seismic reliability in city delivery reliability, water supply, environmental stewardship and sustainability. that is a very comprehensive set

of activities and goals and objectives. and the objectives are where the real the real action is. the goals are very broad, but the objectives are the things that we're striving for, most of which we can meet. but some of which are still aspirational because we still have some ways to go on certain ones of them. but and some are just ongoing, you know, you can never rest. as we've talked about on climate change and water quality and various other things. so now to get into the water budget presentation itself , uh, we'll talk about the water operating budget and then the hetch hetchy water operating budget, the water capital improvement program, and the hetch hetchy water capital improvement program. um, and here hetch hetchy water is part of the water enterprise. but budgetarily they're a little different because they are partly supported by power revenues in addition to water revenues. the entire water enterprise is supported by water revenues. but hetch hetchy has

power revenues as well. because of the nature of having facilities. and again, just as a quick refresher and we might cover it again later, uh, for facility within that system. they are categorized as one of three things. either water facilities, which are solely for water and are supported by water revenues, power facilities that are solely for power generation and delivery, and they are supported by power revenues and then there are a number of facilities that are joint facilities and joint facilities are funded with 45% of water revenues and 55% of power revenues. uh, so again, it's a it's a different funding mix as opposed to just straight water revenues. and that's why it's called out different, uh, differently. budgetarily. but overall, all the operating budgets, uh, are really have really been developed considering a variety of things.

uh, first, again, are those water enterprise levels of service that i talked about a couple of prior slides. that's kind of the overarching set of things that are important to how we operate and what we need to maintain. um, but also there are various other things. the first one is generally new regulatory requirements and a couple of good examples of those is the ever evolving lead in drinking water. you'll see some stuff in this budget that is new resources for basically school sampling and reporting. uh it sounds like a minor thing. it's actually a huge deal to go and sample all the schools in san francisco for lead, uh, whether you think it's there or not, there's a requirement that you go and search and find it so that you can find it. we can do something about it because we don't want lead in school drinking water, for sure. um vehicles and equipment as well. the climate regulations that are moving along there are something

that we are going to have to be responsive to. we've already started to replace a number of our vehicles and pieces of equipment, but there's a long way to go there, and it's not an easy path. the best example is that very large equipment there is not really a rule viable. uh uh, equipment on the market that is just electric. uh, and when i'm talking big equipment, i mean big equipment, you know, backhoes, graders, you know, dump trucks, uh, those kinds of things. so we may also be looking at hydrogen fuel cell, uh, funding in the future. so you know, what we currently might have is, you know, a place where you can get gas is a place where you can charge your electricity. and now we have to think about, well, what about fuel cells? so that's that's going to be a coming thing for us. i'm just putting that out as their flag almost for future budgets that that's going to be a big deal as we get into some of our new facilities. um, we have new programs coming along.

uh, a number of alameda creek watershed activities, the alameda creek watershed center that we've been working on and is moving towards completion so we can take advantage of that, uh, as well as, uh, working with the muwekma ohlone, uh, in the watershed. that's a big piece of what we do there. uh, alternative water supplies. you've heard a lot about that over time. uh, that has been presented to the commission, and that is going to be an ongoing program well into the future, because that's going to be one of those areas where we can't stop looking. um native american cultural resources. you know, i mentioned the muwekma ohlone, uh , in the first part of this, but there are lots of other tribal issues out there for us. uh, and in particular, we want to start to grapple with, uh, those kind of issues up in the hetch hetchy portion of the system. we've done some work, i think, but there's a lot more that we can do. um, and then, of course, tuolumne river issues are ongoing related to the bay delta

and the ferc proceedings for don pedro, uh, and other things that we're doing out there. um, and then also, uh, one of the things that, you know, was a big issue for us was looking into finally within the organization and realigning staff resources to what are more priority levels for us than what the positions were originally envisioned for, or maybe just are better focused on a different priority, uh, as we move forward, instead of getting a new position right now, then we look into the future. maybe there's a new position to backfill that, you know, first one in the first place. but right now, the work that is going to be dedicated to is more important for us to do. so those are the overall drivers. and i'll talk a little bit more about those as we get further into the presentation on the overview of the water budget . uh, this slide basically shows the water budget that for this year is. $674.5 million and

expected to grow over the next two years to $765.5 million. uh, and, and where you see the major growth is in that blue sliver there, uh, the capital improvements, we have a lot of funds going to capital projects that i'll talk about in the second half of the presentation on, uh, that is the real big driver of budget growth. there are other areas of growth, but they're they're much smaller by comparison. uh, and the position changes, uh, we actually have, uh, a fairly modest number of changes here. one of the things that that we did even though there were a lot of excellent ideas coming forward on what things we should do, we've had to be very cognizant of affordability. we and also other metrics that we have a very important for one is making sure that our debt service coverage stays in the proper range. and so we constrained our budget to

make sure that we did not run into debt service problems, because that would be an unacceptable state of affairs. so what you see here are proposals that that made it through. i won't go through the large, long list of things that didn't make it through, but but there are there are lots of things that we think are important. but you have to prioritize. obviously uh, so there we had, uh, nine new requests, uh, positions, uh, half operating and half uh, project based. uh, and then temporary to permanent positions again, just as we've been done in another, uh, organizations. we're trying to convert what have been temporary, permanent, temporary positions over time to permanent, uh, as much as anything else for staff stability, uh, issue. but there are other reasons to make them permanent. as opposed to temporary. uh, but then also looking at attrition savings to offset those increases. so that and again then for 24, 25, uh,

there there are seven project based positions or funded not by operating revenues, but by project revenues, uh, that represent about a 1% change, actually a slightly less than 1% change in the number of positions, uh, and none in 2005, 26. so it's all in, uh, 2425. uh, and then you'll note there at the bottom is the note that we had 42 positions substitute ones within the enterprise. so that may seem like a large number, but it's a pretty small number in terms of the size of the organized portion. when you have 1100 positions, 42 is a pretty, pretty slim amount. but again, those were looked at by, uh, the managers in our divisions and proposed for substitution from one classification to another to deal with higher priority issues . uh, a good example is within water supply and treatment. we have put more emphasis on, uh, capital improvement, project management and asset management

and we've been moving positions toward that as opposed to some of the other activities. uh, but there are other things in terms of operation that have needed more support as well. so they actually have the majority of these substitutions. but there are they're all well considered and well thought out as a way to go forward. uh, and then the last, uh, overall budget slide, uh, on water is the, the growth drivers, uh, and this is just, this shows the same information in really as in the bar charts. uh, and you see that in the 24, 25 request, which is that block of things above that starts off with the cola adjustments. uh, 8% of it. uh uh, is, uh, from capital or excuse me, the 8% increase is due to capital oil. and in 25, 26, 4, uh, part of the increase is due to capital, uh, for an overall net overall

change of about 5% in the budget . uh then again, the a little more detail on the water operating requests. i'm not going to go through all the positions. uh, specific by individual uh, but but these are the, the highlights of those is uh, first is the conversions of temporary to permanent. i already talked about that. we've got about 12 positions in water that we are converting to permanent positions. and these have been positions that have been temporary for some time. uh, and we need, we believe it's very important to convert those to permanent, uh, as an important staff support activity. um we have something coming forward on new hydrant meter regulations. uh, sounds like a funny little title, but basically, what we do is we actually, uh, have of contractors come to us to get water meters that attach to, uh,

fire hydrants that can then be used for construction projects. and they're, that's, that's an ongoing thing. all the time. and a, a contractor will come and get water meter and then they'll bring it back later with the expectation that it will be used at a particular job site. uh, and that then the water gets paid for when the meter is brought back in and read. um, but that turns out there have actually been no regulations whatsoever in that. and cheryl bregman is kind of smiling at me a little bit. this is an issue that we have identified where there i think there have been abuses of the system and we felt have felt it's important to actually put in place, uh, regulations governing the management of those. and, uh, as always, with these kind of things, consequences of people violate those regulations. you'll be seeing those later this year, uh, as we bring it forward. but of course, if you have regulations, you need to have staff to support the

enforcement of those regulations. and application of them. uh, so you'll see a couple of positions in here, um, new lead in school monitoring requirements. i mentioned this. there are new requirements now for monitoring, uh, in schools and reporting the results, uh, and to helping to take steps, uh, for schools to be able to deal with any issues they find, uh, this is a big deal in terms of the number of schools and also, uh, not to get too much into the weeds. how you actually test for lead requires that the water not be used for eight hours. well, trying to find a time when a school is not using its water for eight hours turns out to be a huge deal, and scheduling staff to be there at that time so that they can do that, uh, takes a lot of effort. so this is a very staff intensive effort to move forward, get those samples collected, get them back at the, uh, i think it's a, you know, more than 200 schools in san francisco. so that would be covered by this. uh, so people

have said, well, gee, can you test another school? well, you can always test another one, but you start to test one. you want to test them all. so the state has come through with regulations jones starting next year that say you have to test them all. and so it's a big effort that will take place periodically into the future. um i mentioned position realignments in the water supply and treatment division. uh, again we have uh, uh, a bigger efforts underway on asset management, both in its organization of it and on the staff to provide the maintenance to do that. and so we're realigning positions within that organization to make sure that we can we can take care of that very essential work. um, we've got in here staffing for the alameda creek watershed center and the native plant nursery. uh, not a large number of positions, but critical ones to make sure that when we open the watershed center, we can actually welcome guests to it

and deal with it. and our nursery, uh, has been, uh, kind of, uh, you know, a hand to mouth kind of operation. so far. and we need to add another couple of staff to solidify that, because we know our native plant nursery will be important thing into the future. um, we had started our alternative water supply program with temporary staff. uh, we're closing in on having the first phase of a plan there, but that's going to be an activity that is ongoing for many, many years. uh, it's very clear to us that these projects certainly don't happen overnight at, uh, and they are all technically and institutionally complex. uh, so we're moving those permanent staff, uh, chemical cost increases were adding a million and a half dollars, uh, to the water supply and treatment budget for treatment chemicals is primarily, uh, the, uh, hypochlorite. uh use, uh, has been very variable in the market , has been very volatile on

that. so we've been struggling with that along with wastewater. we're both facing the same issues in terms of just the availability of hypochlorite, uh, as well as the cost of it and how we cover that. uh, and then, as i mentioned previously, equipment and fleet modernization, we need to start converting more and more things to electric, where we can. and there is funding in here to do that. uh, and to take out some older vehicles that, uh, are no longer no longer suitable for the road. but also here there's a chunk of money, uh, particularly again for water supply and treatment for a lot of their equipment that, that we use in landscape maintenance throughout the water system. again, it's a very large system. so there's a lot of work there on that. uh um, on the programmatic request, it's, uh, it nets out to a slight decrease . uh, again, there are some areas here, uh, that, uh, we have, uh, you know, proposed

increases in, uh, and some that we have proposed decreases in, uh, so it nets out to a net decrease. but again, these are areas that we have a lot of work to do to, uh, and this is the best way to support it here. these typically in the past been part of the capital budget. and just as an fyi, uh, we're putting them in the operating budget because they really are supported with operating funds. so we did a shift of moving them into the operating budget. but the net effect on them is not is nothing. it's just a matter of where we have it in the program. so if you've ever seen it before in the capital budget, it's not there now. it's in the operating budget. it. um, talking about the hetch hetchy water, uh, budget, uh, again, the growth overview there uh, is again capital projects. uh, that gray bar at the top, uh, is the single largest increase. uh, it starts out with 95 million here

in this fiscal year and gets up to 116 million in the future. fiscal year. uh, and, uh, these were a slightly different order, but you can see the growth drivers, again, are capital and programmatic projects. uh, so they are the single biggest change here. there are other things. and we'll make mention of some of those. uh, but the real big changes in capital and there's a lot to talk about in the capital front, uh, that, uh, is different between the two parts of the organization that are important to understand. um, and on the position front, uh, again, temporary to permanent was about four positions. uh, and there were new requests, uh, for, for a small number of positions and we spread the temporary to permanent over two years, again by adjusting attrition, we've limited the number there. so there's, you know, one real new position, uh,

that's in there. uh, and they substituted about 13 positions from various other activities into new activities going forward in, uh, in this budget. and so highlighting the hetchy operating requests, uh, there are increases for the memorandum of agreement with the national park service and turlock and modesto irrigation districts, uh, agreements for our work in the don pedro project, relicensing, uh, and other activities. there was one that i think we're all quite happy about. just to mention it, uh, again, was, uh, the moving forward with the districts together for on being able to start more working forward on the habitat improvement projects . uh, as the documents that are lined up on that, they are part of the voluntary agreements. but we're treating these not as part of that. we're treating this as something that all three are committed to doing. and so we're

just going forward on those, uh, and that's going to be a big step forward. um, we also have the o'shaughnessy dam instream flow management plan, environmental review. uh, this is something that we've been working on for many years, uh, with staff from natural resources and hetch hetchy working on that. we have old stipulations, uh, that we signed back in the 70s that establish the requirements for our instream flow releases at o'shaughnessy dam. uh, and they were basically designed for maintaining trout in the stream. and we all believe that we could do better than that for the environment and better mimic, uh, the hydrology of the system. and so we've been working on that for many years. and and we've actually been pretty comfortable with what we're doing now and been pushing the national park service to take on the environmental review because they have to be the lead agency on this. and very frankly, because they've had they had a rocky road for many years on

some environmental review projects. they were not anxious to pick up one, but this year they finally said, okay, we're ready to do this. so we can make these permanent changes that we can all support. uh, but that's going to be, you know, a multi year process as our environmental review processes are. and there's, uh, you know, a chunk of money in here, two plus million dollars to support that environmental review process. yes. uh, and then lastly supporting the native american and cultural resources management program. that's the one new position there. uh, again, to make sure we're devoting that to develop our relationship with the tribes that exist. and there there are very few federally recognized tribes in our neck of the woods, but there are tribal folks. macmillan are a good example. they are not federally recognized in many in the bay area are, but the same is true in the sierra. and we need to establish better relations with them and do a better job overall

of managing our cultural resource. as with all our projects, um, and then on the hetch hetchy water programmatic request, it's um, there there is, uh, an increase there for weconnect compliance. that's the western electricity coordinating council, the north american electric reliability coordination, uh, or corporation , uh, that is the regulatory system for operating the grid, uh, and power generation and power transmission and distribution. uh, so those are big issues for us to deal with. um, the transmission. line issue, you'll see that show up actually in the capital budget as well. that means managing the vegetation and trees and everything around our existing, uh, uh, power lines. um, so again, here is somewhat of an increase. the wexner compliance is actually updating old, uh, you know, hardware and software that is necessary for

maintaining compliance. uh, so i'll take a little break here. that is the summary of the water and hetchy water, uh, operating budgets. uh, and be happy to take any questions on that. if the commission has any questions. so thank you. we will take, uh, questions and thanks for that introduction and thorough, uh, summary. commissioner ajami. thank you, mr. richard. this was great. um obviously, you know, the water enterprise is very close and dear to me, so i'm very eager to , um, always eager to learn more about what's going on under the, um, under your, um, leadership. i have a few questions. one, on slide 1212 that you were going to highlight of water. uh, water enterprise operating requests, um, on the lead in school monitoring requirements. i wonder, obviously, you're putting that effort in. i

wonder, like, in five years, there might be other things that we have to be monitoring for. um, i would not be surprised. so i'm wondering if there is a way we can think about this a little bit more systematically. so if the new regulations comes down, what is it that we can do? um, to make sure, um, whatever network we create here can enable us to do other things, um, or monitor for other, um, uh, you know, chemicals that might be regulated in the future. um, so beyond what we're doing right now. so i would like to hear what your thoughts are on that. and then on the, uh, chemical cost increase, i couldn't, um, fully grasp, um, why the cost of, um, hypochlorite has gone up. is there, like, a specific reason? um and just a little bit more on that would be very valuable.

just also anticipating, is this something temporary because of all the projects we have, is this something permanent? um, and do you expect this to, to change even more? um, and, and on that topic, um, i don't see it here right now, but as we do more recycling and, and potentially desalination on, um, or using the purification process, um, do we need to think a little bit more about, um, the cost of operating and maintaining those systems and different chemicals or membranes that they need? i know it's not right now in our budget, but generally speaking, i would love to hear a little bit more. okay um, well, taking those one at a time, um, uh, the new lead in school monitoring, uh, the three positions for that are driven by there are new regulations that

have come into or are coming into effect on that. so that is a requirement that we have to do for, uh, and this is all all, you know, managed out of our water quality division. so if we needed to get into more, i'm sure you know, andrew can provide additional work. but again, a big chunk of their work is looking forward to the next thing, whatever it is, one of the things that i think we've alerted the commission to, uh, is the lead and copper, uh, rule improvements, which is the federal regulation for lead and copper in drinking water systems and lead being a big piece of that. uh, those, those regulations had been under development for they've been underdeveloped for a long time. it's a very challenging area because it's hard to identify if there's any safe level for lead. um, and so we've been working on those and they finally, you know, under threat of

litigation, put out draft regulations that are the revised set from what they had been. uh, i think the chances are pretty good that those will be made permanent. uh, this year. uh, and so there will be a whole new set of regulations relative to, uh, lead and copper that we have to deal with. some will be reporting, uh, some will deal with the issue of do we do work on the other side of the meter? we'll talk about that a little bit in the capital program side, because that's where we are doing work. uh, on fixing that. but, you know, the lead is just one little piece. but there are whole, uh, set portions within, uh, you know, our water quality division that are devoted to making sure we maintain compliance with all of the existing regulations and making sure that we're looking forward to and analyzing and trying to figure out how we can best then manage, uh, into the future. you know, it would really be great if you could find some regulations for a new, uh, new contaminant that g. we actually

took care of that by doing things we needed to do for lead and copper or whatever. we've most recently done. uh, so those kinds of things are out there. you'll see one of our capital projects is the, uh, ozone project at the sonoma valley water treatment plant. uh, well, that's particularly to take care of taste and odor issues, but it also has a beneficial effect in disinfection byproducts and other things. so that's a good example of a project that, you know, can help move us forward in the future. so we're all very aware of that. but it's an ongoing thing. it's a it's a never ending thing as, as as uh, uh, as uh, analytical techniques get better, uh, we find more. the more we find, the more people worry about it. sometimes they worry about it before there's any documented, you know, negative effect. but that doesn't change. you know, the public perception that there are things we have to deal with. uh, very true. um, on the on the chemical cost increases. this is

not a san francisco issue. this is an industry wide issue. uh, i would capture it, you know, under the giant rubric of supply chain. uh, but it's generally. in that area where we went through a period, i believe it was about two years ago, where deliveries were almost impossible to come by. uh, and changes, you know, whatever were happening on the supply side, were sending the prices through the roof. and our contract, uh, actually, you know, expired and, uh, for that and we needed to deal with getting a new contract right away. we had routinely been doing them every couple of years, but the market was changing very rapidly. and literally this was taken up at the national level. this was not just a san francisco or a california issue. this was an industry wide issue for, for in particular, disinfection and dechlorination chemicals that we've all had to face. um, this proposal of a million and a half

dollar increase, we think will help us. but we've also seen from experience in the past that the market does tend to be volatile. so we might go through a year where the prices start to drop again. so what's the right number to put out there is a little bit of a crapshoot, but we think it's prudent to add some money to the budget now for it on this. but this is, uh, again, this is not just a san francisco or california issue. this is this is a nationwide issue that that people are struggling with. and i don't know what the if there is an end game here or if the market will just keep on being volatile. and do you anticipate like other chemicals? uh we might need would have the same problem or i'm just again, like not thinking about obviously we are looking at the budget for, um, the next, um, the next budget. but i'm wondering, like, is this something we have to anticipate even longer? should we like, uh,

do you think this is going to be, um, do we need other chemicals that potentially may go through the same problem or are, you know, i guess you sort of touched on that by saying, we really don't know. it's an uncertainty that we don't know how to deal with. and the ones that we, you know, obviously the ones we rely on the most, you know, by far are, are sodium hypochlorite, sodium hypochlorite and sodium bisulfite, you know, chlorination and dechlorination, particularly on the wastewater side. but chlorination from both of us at tesla, we get, you know, truckloads coming in every couple of days. uh, just because we need to make sure that we have a steady supply and that we have enough storage on hand because we have some large tanks there. um, those and those are the, you know, the single bread and butter piece, uh, along with fluoride for us. fluoride, you know, we don't use as much of. so it, it hasn't proved to be volatile as volatile yet. um

there are other chemicals, but there aren't too many. those are those are really the big ones. head and shoulders above the others that we really have to worry about. right. okay. and then as we are sort of you were going to say something. yeah. well and then moving on to, uh, alternative water supplies on the future where we will need to do additional treatment and disinfection. uh, there are lots of options issues around those. and so as we develop those projects and we'll talk about those a little bit in the capital side, uh, that is something we have to be very cognizant of that, that, uh, you know, it's like, okay, so we're going to recycle water and we're just going to plug some treated wastewater into the pipes here. uh that is, you know, a large, complex process, uh, both in terms of staffing and equipment as well as chemicals and other operational considerations that will need to be part of the complete analysis of how we implement that. those and we're looking at various ones, i

suspect we won't do all of them. uh but i suspect we will do 1 or 2 of them. uh, which ones i can guess right now, but but, uh, we still need to get through some more analysis in partnership development to really to get to the answer. uh, but yes, the all the operational considerations are very critical for those projects. yeah. um, on thank you for all that. um, so slide 13, um, you had, um. drought response. um. for half a i guess these are ftes, right? half feet , which sort of eliminated for 24, 25 and 25, 26. and i'm wondering if this is something i mean, we don't know, maybe next year will be a drought year. so is this something that we're going to keep bring back and put back in, or do we need somebody since this is keep coming back? um, do we need someone um, more

permanently focusing on this? i understand, i'm assuming you can correct me if i'm wrong, but i understand. i know you will. um this individual or that half feet is not. you're not bringing somebody in, so you're just basically putting half a person. this is this is not a person, right? yeah. this is half a time of someone who is like focusing on this issue. yeah. or or, uh, contract support or contracts. that's that's when you see short turn things like this, those tend to be more contract support activities. so this was because we needed to make sure we had resources in place for extended public outreach, which means buying time, uh, different places so we can get messages out to people. uh, and, you know, we work with consultants and maybe we add a little consultant support to do additional work there. but this was thinking that, you know, assuming the drought extended an additional year, that we would want to have more capacity to

literally support outreach efforts. uh, not so much in the in the message development is about the physical process of getting it out there, disseminating those messages. yeah, yeah. and so, uh, you know , even even this one, uh, as the drought ended last year, it's like, oh, we've got this money. and. right, you know, but but we didn't feel a need to continue it because it is more of a periodic thing. we do have a large amount of communication that just goes out on a routine basis. you know, there's never ending, you know, support for conservation and water use reduction throughout our system and with our wholesale customers as well. um, but occasionally you need to goose it a bit more to get more research. got it. thank you for the clarification on the on slide 71, you were discussing about, um, uh,

connecting more with the native american and cultural resources. uh, basically connecting with the native, uh, communities that are up in the, uh, upper watershed, uh, more closely and engaging with them. and i was wondering, um, what the strategy is to hire that person because obviously we trying to find someone in that area who has connection to these groups. um is quite important. um, i'm glad that we have this in. i mean, i'm really, absolutely glad that we have this role, um, embedded in this budget. i'm just, um, sort of would love to see somebody in that role that is that has the capacity to be up there and understand these, um, these communities very well. so kind of as you're going into hire someone, i'm sure you're going to think about this very, um, carefully. yeah. it's in it's proposed in the budget. now, uh, we will be starting

work on this, but it's going to be because of the time of the budget process and everything. getting to hire a person is still a ways off on this. um, and also, so, uh, needing to think through and work through, uh, uh, what the resource was, what, you know, again, what the total resource need is, uh, if you look at yosemite national park, there's a lot of, uh, you know, it's a big park. uh, they have, uh, had a lot of interaction with tribes around yosemite valley. if you ever look at anything relative to the valley, there's a lot of information, a lot of tribes, a lot of interest, a lot of pretty ugly history. uh, in yosemite national park focused on the valley. it's pretty quiet, uh, over on our side. so so, uh, we don't think we'll need nearly as large an effort, uh, as what the park has done. uh, but we obviously need to coordinate

with the park. there focus has been on the valley and will stay on the valley, so we'll be working with them. but trying to work through, you know, the tribes and you know, the descendants who remain of those tribes that might be there. that's a lot of the legwork up front is really, you know, finding out who they are and getting to know them. uh, yeah. and we want to have resources on people who can do that. uh i'll say here in the bay area, uh, our staff have done a really great job of communicating with the muwekma ohlone, uh, tim in particular. carla schultheiss, uh, has done a, a long work and it it is long work. it is. you've got to be in it for the long haul. you can't just drop by and say, hi. i'm here to help. that doesn't work. and we'll never work. so you need to develop those relationships. absolutely. um those are my questions. i just want to acknowledge the fact that you mentioned, um, the age of our

system. i think that is a huge issue, not an issue, but sort of requires a lot more attention. and care. i'll mention it again later. several times, i'm sure you all so, um, but i want to acknowledge that i appreciated that the fact that you brought that up, because i'm sure it it's. constantly in your attention and your your, um, concerns. so thank you, commissioner maxwell. thank you. um, let me start with, uh. about the position for the native american. i understand. well i'm just going to be blunt. i would like to see somebody from that. those people i'd like to see a native american, somebody in that. with that position. i mean, just to be honest with you, from that area and from those people, because i think they understand i don't need to go into that. you understand what i'm saying? and it would be very difficult for me if we do hire somebody and they don't

look like those people. i think that that would be a problem for me. and it may be difficult and it may be all these things, but we have done difficult things before. and then i'd like to know, um, how many positions, full positions do you have? i mean, if you're if you're at full capacity, what does that look like? what's the number? uh, well, the total number of positions. when you add the water enterprise together with hetch-hetchy water total budgeted positions is 1109, to be precise. um, we are currently running about a 23% vacancy rate . uh, so we're not the highest, but we're not the lowest either. so we, as everybody else, have been, you know, struggling to fill positions and we're keeping at it. uh, and, and we are getting in new people from time to time. um, we also add in when we have different types of temporary positions that we, we

use, uh, as well as, uh, in some cases contract staff who we bring in, uh, i'll give a minor shout out for, for hetch hetchy water and power. uh, they will bring in staff, particularly in some of the technical capacities , uh, such as engineering. they will bring in, uh, staff. staff as engineers, uh, to work as contractors under our direction. but also get them interested in working at moccasin and hetch hetchy. and we've actually successfully been able to convert a number of those staff into people who are willing to get hired by us. uh, and those are great. those are great opportunities. but but you kind of have to have a process to get people in the door to look at them and get them familiar with you as well as you familiar with them. so you have about 1109 and with the additions that you're asking for, how many would that

be altogether? um, well, well, with the additions, that's more like, you know, uh, i can't recall the number if you added up the two from those two slide, it's a little bit more than that. maybe you know, six more positions. i don't know. oh well , but then you want it 14 and yeah 251 plus 867. so what is that. that's 1100, 118. so that's about nine positions okay . and then if you were fully staffed, if everything were humming and going, well what would that number look like? uh, i mean, i know it's i would not hazard a guess on that. well, you said that you are at 25% down 23. i'll take every percent. i can get 23% down. and so what then? if you were only

10% down, would that be, um. would that be the number for you that you're trying to get to? i mean, the positions we. yeah, there were there will always be vacancies. yeah. 10% feels a whole lot better than 23. okay okay. um and then we also talked, i asked a question and, um, i don't know whether it's been answered. maybe i missed it , but it was a correlation between how many people were down and then contracting out. um, and so i was told that we would get it in this budget, that i would that it would be answered. and maybe i missed the answer. i don't know, but is there any i mean, you know, i'm i'm sure i remember seeing a lot of, um, and i knew people who worked for the water department long time ago and, and they lived in the sunset and they bought houses. well, those people are no longer there. and

the work is still being done, but a lot of other things are happening more often. i think. and it could be related to the fact that we don't have enough people looking, monitoring. um, and so we contracted out and they only cut if you contract for them to cut that branch, that's what they're going to cut . i don't care what else the tree may look like, but they're only going to cut that branch. that's a concern. and so i wanted to hear i wanted to be to feel better, that we are not not not hiring people. and contracting out, but i haven't heard that we still have another , um, maybe on this, um, friday, somebody can kind of answer that question for me. yeah. that's a, that's a puc wide question. uh, we have some positions. i don't know the exact number off the top of my head of where we have, uh, contractors who are, you know, taking on some of the responsibility that we would normally have staff do. that's

particularly in the city distribution division and hetch-hetchy water and power. we have more of those contract type staff than in the other divisions. uh, and, you know, obviously we'll work with wendy and others to, you know, help provide an answer. help what help provide an answer. okay. thank you. and then, um, the chemicals i know that you you need a position for the chemicals. and i think wastewater wanted a position. uh, no, we were that was not a position. that's just cash to buy. buy chemicals. oh, you just want cash? yeah okay. me too. yeah. we all do. yeah um. okay. um let's see. oh, yes. and then you, you mentioned, um, i think it was seven. oh, yes. it's, um,

sustainability. and that was water enterprise level of service goals. i also noticed you didn't mention affordability as as a service goal. yeah, actually, sustainability we are is an umbrella. affordability is contained under that that we think that for our system to be sustainable, it's got to be affordable. so that's why it's underneath that it's one of the objectives is okay because i didn't see it. it's just sustainability. it says environmental economic and social. oh is that economic. yeah that's economic okay. all right then when you said um sustainability environmental economic and social. so what does that mean. the social part. how what. um well that includes, uh, you know, supporting the communities that we serve, uh, and the communities that we affect. uh, so that's part of the social aspect of this that,

you know, and this is true, of course, with all of us that we operate at, uh, in large in different geographic areas. but there are communities that we are directly serving as part of it and communities that we are then affecting with our operation. uh, and that effect actually kind of is, is, you know, a couple of things. it's, you know, whatever we're doing in terms of capital projects or other things that might disrupt the community. uh, you know, we look to, you know, hire hiring locally is something that's not just san francisco. it's throughout the system. uh, but also like in jobs, you know, hetch hetchy is the at least it used to be the seventh largest employer in tuolumne county. it's a big employer in the county. uh, so that's part of what they're doing there. and they're engaged in a lot of activities helping members of the community in various ways. so when we talk about that, normally, i mean, i don't see anything about racial equity.

um, in, in your, in this and then when i look at the native americans, the native, uh, native. is that right? um, the indigenous people there, that to me is a part of all of that. and that's why i don't i hear your engagement, but i don't see here your engagement on. and so, commissioner, we went through all of those objectives of the levels of service at the november meeting and, you know, it's a very extensive of list of things that, you know, are guideposts for us. we can go back in that here. i truncated it because that would have taken up a big chunk of time that we didn't think was necessary. but there are within each one of these, there's a lot of important details in all of the things that are under it. and racial equity is one of those. i understand that, but sometimes those kind of things need to be, um, talked about. they need to be in here. we need to see them.

just social. that could be anything. so since we have an emphasis in the very beginning, um, it says an emphasis on, on racial and environment and so that's why for me, it's extremely important. and then when we talk about hiring people and we talk about it, um, cultural, um, you know, that that's a concern for me. and, and also we also talked about programs dealing with young people and getting them into to, um, you know, keepers and, and women becoming ground keepers. i mean, you know, you get a farm house for, what, $1,200 a month? i mean, these people could really, um, you know, that could be really something that that could make a difference in people's lives and our lives because the more people we have involved and getting, you know, into that stream is important. and i'm just wonder about, um, you know, i saw the one point, what was it, 1.3 million for

youth. yeah. so how does that work? and what are we what's our goal there? well that's a contribution to our youth program throughout the puc. so it's a contribution to that in terms of funding. we actually do hire uh, particularly in, in uh the, the summer we actively are constantly recruiting people to come in and work and have started out getting, you know, seasonal work with us that interests them. and it's people of color and it's women. uh, we also have in the sierra and in the san joaquin county, tuolumne county area, uh, we have a very active program, uh, for, excuse me, uh, pre apprenticeship, uh, to get people into apprenticeship there. it's a very popular program and one that we're very proud of and a proud partner of. so we're doing

a lot of things on there. i we would be happy to come and present on those. they might be better as part of an overall puc picture, because there are elements of that. but right now we're just gearing up for summer hires. you know that in some cases are laborers, in some cases are technical people or quasi technical people in college programs. right now, we are doing that. and we can we can tell a story there for sure. okay. well i think when we're doing a budget, i think it should it's not um, i think it's important to mention affordability. um, and economic could be anything but specifically, um, you know, we're a public agency and just the other well, yesterday actually, before the game, i was flipping through the channels and i started watching, um, the port commission, and that's what people do. i mean, we never know when people are going to watch us and what they're going to

hear and what they're going to see. so i think it's important that we always talk about our goal is affordability and that that particularly will come out in the capital program element because as we talked about, those are the largest drivers of increases here. and so affordability is really very high on our radar screen. really great. thank you. and thank you for your patience and caring i appreciate it. thank you. thank you, commissioner rivera. uh, good morning, mr. ritchie. thank you very much for a great presentation. and i just wanted to, um, also mention what, um, uh, commissioner, um, maxwell stated, i would love to see a presentation on youth employment and what we're doing with it. and, you know, potentially increasing that budget and, you know, bringing more young people into puc for, uh, potential career life long career. so i

would be totally interested in that. um and then i just wanted to make a comment, uh, on slide eight, uh, we were talking about or you had mentioned, uh, new regulatory requirements for vehicles and equipment and, and, um, you had stated about alternative fuel vehicles such as hydrogen. and i know that, um, i worked on a pilot program, um, to try to bring hydrogen powered vehicles into fire and at the fire department at that time, there was only two major manufacturers that produced those vehicles. now there's over ten. so i would just like to, um, maybe plant that seed that in our, our new facility that we're building. um looking at, uh, possibly putting in a hydrogen refueling station there. i know that we have one in san francisco, but it's on a privately owned gas station, and they're having a lot of maintenance problems. sfo has a hydrogen fueling station. they

have zero problems, and it could be because of the city maintenance staff is just a little bit more, uh, engaged and making sure that that that's available, um, you know, for the city vehicles. so i just wanted to give that comment and, you know, make sure that that's that's something that's out there. and i know that a lot of times there's, um, uh, maybe the thought process is, well, you know, we have all diesel vehicles and we don't need hydrogen, but, you know, looking forward, we may have more hydrogen vehicles and just a few blocks away on selby is a central shops. they have a diesel fueling station. they have a diesel tanker, uh, that's available for, um, uh, mobile transport of fuel. and there's also another tanker on 25th street for fire department. so there's a lot of diesel right now. it would be great to have

of, uh, hydrogen available all, uh, in a city facility so that we could, you know, regularly maintain it. and uh, you know, possibly, uh, you know, address the, the, the need for it as it, as it comes up. so i just wanted to kind of plant that, that seed for the new facility and, you know, keep, keep an open mind with that. oh, absolutely. i think though those, those issues of, you know, how many gas stations do you have? do you need one in every facility or can there be shared facilities? uh, and then i started to explore, you know, hydrogen fuel and that's a that's a whole big issue unto itself and the necessary requirements for actually siting a facility. and given that we have have, you know, large numbers of equipment here in san francisco as well as in millbrae, as well as in sunol , as well as in moccasin, you know, how are we going to meet our needs there and how do we

fit them into the city structure there? and, you know, you mentioned, well, there's a private but there's a public, and the public seems to be working better. you know, those are the kinds of things that we have to really start to dig into because i'm pretty sure hydrogen will be part of our future. how big? you know, how small? all those are tough questions to answer, but we need to make sure that we if we don't build them now, we make room for them so that we can do that in the future. thank you. excellent. thank you, commissioner stacy. uh, thank you for the presentation. i when i look at your org chart, i almost think it should look more like tentacles, uh, rather than boxes, because there's so much just overlap and, uh, collaboration among all of your divisions and you talked a little bit about, uh, some realignment of staff resources, and you mentioned in particular

more asset management in the water supply and treatment division, but that also has to affect, um, the, the, the water quality, the water resources, the natural resources and land managers divisions as well. and i, i feel like a broken record sometimes. i just think that the collaboration and the cooperation among all of your issues and, you know, climate change affects everything thing we do in every way. i i, i hope that that continues to occur is occurring within the department because there's just just so much apparent overlap in, in what you do and how you do it. well, there there is overlap to some extent, but you know, some responsibilities are bigger than others. and you know, the, the, the asset management is driven largely by, you know, hardware, uh, big hardware, uh, and the folks responsible for that kind

of had the, the primary responsibility. but there is plenty of work to take. for example, the watersheds. there's miles of fence and miles of roads that that are out there as well, that that need to be accounted for, uh, from a cost point of view, they're less. but they're still pretty critical. so how do we make sure that we're managing all of those? and it needs, um, it needs coordination, but it also needs to make sure that within each of the divisions, there is some ownership of that. uh, so we've got to make sure we've got both components of that. i see, and i was thinking of assets as being something broader than hardware. i mean, the watershed is certainly and the and all of the work that we do for water quality and water resources seems really to me, it's a big part of our asset. they are management. but i understand you're focusing more on the sort of the hardware aspect of it. when you talk about assets today . okay, i have a couple of just

detailed questions to help me connect the dots a little bit. um, on slide ten, you've broken down position types into operating and project. i assume that's really sort of the way that, uh, staff sort of builds. it's time that a project is a specific, uh, maybe tending to be more of a capital project, whereas operating is more ongoing and overhead. is that right? yeah. the operating, uh, uh, operating are our a's, in our lingo and project our o's, uh, and the a's, the operating positions are funded by the operating budget. right. uh, and so they are they are they're being paid for, you know, all the time by the basic operating budget, the project positions or the o's are project funded positions. so generally those positions are established where there's going to be a project that will actually provide the

funding for that position. okay. uh, because, you know, the capital budget and the operating budgets are kind of two different things. and you have to be able to manage both those, you know, so projects are funded to a certain amount. uh, and sometimes those are great places for certain positions that help support that project. should be funded. we actually went through a big exercise several years ago . so, uh, in the city distribution division that we had a large number of project positions because we have, uh, contractors that come in and replace mains, but all of the connections are are taken care of by us. so we have a lot of staff supporting those. well, what we found was that when we were coming to budget times, we had to recognize the fact that the, uh, the overhead for those positions was actually applied to the operating budget. so only about, you know, you know, two

thirds of their salary was being paid and a third was, you know, covered by the operating budget. and that was a big chunk of our operating budget that was being so we had to go through a process of quantifying, tying all of their time off and benefits so that it could be allocated to the project. so it's, you know, these are details, but very important details in terms of how the numbers work out. sure. thank you. and on your slide 13, um, i had let's see if i can find it. the what you're calling programmatic request, i think you described that as something that you're thinking now in terms of rather than a capital project, you're moving it into more of an operational budget. is that what you mean by programmatic? yeah. well they've always been called programmatic, and i won't go into the background of how they were developed. but there were good

reasons for creating these. um, but they really are just funded by revenues, by operating revenues. and so, uh, in prior years, when you considered the capital budget, there was a spreadsheet for the capital improvement program and a separate spreadsheet for the programmatic project. s uh, and i think this year we've looked at the budget and said, that's really just operating funds. and so it's been moved over to the operating budget as opposed to so the, the, the, the approach to it isn't really any different . uh, it's just, you know, which bucket we put it into, it's the same chunk of stuff just in a different bucket. got it. so so within that, um, chart on slide 13, i see treasure island is going down 8/10 of a position. is, is that because you expect

it to be the, the capital part of that to be winding down over the next couple of years and. well, operation and also the part of uh, you know, who's system is it. uh, it has been the navy's drinking water system. we are just and then they are, you know, but tighter operates it and contracts with us. and so we're dealing with it that way. we are now getting part of the water system actually transferred to be part of our system. and so once it's part of our system, it just becomes really treasure island is no longer a different classification. it's just part of the system. uh, so that's why the numbers are going down as we're actually starting to take on more of the direct responsibility for it as a water system. just currently we're just a contractor. yeah. thank you. and then further down the chart, there's a loss of a position in the landscape conservation program. um, could

you. that's not a position. those are dollars. oh, these are these are dollars. yeah. that's not a position. yeah. um, so, yeah, the landscape conservation program, uh, that has been, you know, a grant program we've used, uh, and, you know, we don't see much of a need more for it. you know, not a lot of landscape in san francisco. uh, and so, you know, we may will probably revisit that in the future. we in the area of conservation, we are constantly revisiting all of the things that we do, uh, and wanting to make sure we're putting our money into the ones that are got the greatest payoff. thank you. and then my last question on slide 18, uh, the. the wacken compliance and the transmission line, those sounded like power projects, but they're in the water budget. so why why is that there in the hetchy water budget? but these things, those

two lines are power funded. and so they are. this is where partly our things are funded by water, part by power and part jointly. and so those two lines are power funded. and you'll see that differential in more clearly in the in the capital program. yeah okay. thank you. that's it. thank you commissioner jamie. mitsubishi i actually had a question i forgot to ask on. and this might be more, um, hypothetical, but when we start operating our recycling plants, um, do you think the people we end up hiring would be a joint staff between us and wastewater, or is it going to be a water? um position? like, i'm just wondering how those, since those are obviously sort of in between the two enterprise uses. um, yeah. in, in it will be it

will differ by facility. uh, for the west side we start west side recycled water project. uh, the treatment facility is within the oceanside plant and will be operated solely by, uh, wastewater staff. uh, and then the dividing line basically will be as it leaves there and goes through, uh, transmits line up to golden gate park and beyond. and that will be operated by water staff because it is a water supply project. uh, we, you know, and it's in the operating budget. we didn't make any change in it this year. we are, you know, proposing to pay to wastewater certain amount of fund to actually operate the facility within there. but it's, you know, but it's a wastewater facility. and so they will be responsible for it in terms of the future with purified water projects. uh, the requirements from the state require the, you

know, water certified operators to be responsible for that. so we'll be looking at different staffing models, uh, once we get to those kinds of projects. but in your historical non potable and that's what wastewater, you know, the west side project is uh, treatments by wastewater paid for by water and water takes care of the delivery out to the user. okay. but but that position is paid by water revenues since they're paid, people pay to the water. yeah. the water operation is paid directly by water revenues. right the other side is we will we are we're working order work ordering money to wastewater to operate that facility when it becomes operation model. okay. and then, um, on that table 13, which another thing i wanted to ask, i'd totally like blanked on it was the it's project. um, i'm assuming that's information

technology services, but is that correct? uh, that is correct. and that is one, you know, i can answer a lot of questions. uh, actually, i think jennifer is here, and i might ask for laura. either one of you. good morning everybody. laura bush, deputy cfo. um, so as you remember from nancy holmes presentation last monday, it's is increasing their budget for various different projects, which jennifer can explain. we put those into the budget in a number of different ways. we put them directly into its operating budget. we put some projects into the capital budget and we ran some projects through program attic and the programmatic projects get allocated to the enterprises. so just depending on the type of projects and where it was most suitable to put in the budget, um, that's where it's appearing and it's coming up here because the programmatic projects sit within the enterprises. so we allocated a portion of the it's

programmatic projects to each enterprise. so that's why you're seeing the increase here. and don't get me wrong, i'm actually excited to see this. and i'm assuming, uh, maybe this wasn't a line before or this is a brand new line. this is new. and i think this maybe goes back to what, um, uh, commissioner stacy mentioned too, and i have mentioned many times, which is you know, we obviously conventionally from an engineering perspective, we think about, um, you know, hard assets as dams and, and pipes and pumps that we have to operate. obviously, we are going more and more need data infrastructure to be able to operate these systems better. i personally call them soft infrastructure because they're not somebody something that people think about. but we are going to need more and more of that. so it is an important line item and i want to acknowledge that this has showed up here. and i think i'm i would not be surprised. um, this number end up going because of more data that we need to collect and more

analysis that we need to do. and a lot of the backbone that we need for that process. um, so just wanted to highlight that, um, in this conversation, and i think that goes also back to our other kind of soft infrastructure, natural infrastructure, which are the watersheds and all that. and i don't think it's a lack of willingness to do it. it's just the way we operate. generally, utility wise, it's very we have very fine lines. how do we bucket things? so it makes it sometimes very difficult to account for those assets as infrastructure. but they are. so thank you. just wanted to ask thank you so much. thank you. and i would elaborate on that a little bit. um we this this is just a small piece of it's contribution from water. you know, all the bureaus, including it's including the others are all funded by the enterprises. and so i couldn't tell you off the top of my head how much money we're paying for. it's

already. but it is insignificant . and i know, because you guys have smart meters that right now collecting all that data, that's i mean, you have a lot of a lot of stuff that involves it's but i would like to, to be honest with you, mr. ritchie, maybe this is the conversation which is those we right now combine them with other things. i think they need to have their own line items because it's valuable to know how they're changing and growing and evolving, and it is good for the every enterprise to be able to track that. because i'm assuming this is a growing, um, part of the, um, each enterprise, you know, considering especially in the last ten, 15 years. so or even before, um, so it's kind of like a valuable thing to have that as a line item. i know that's not how we do it, but maybe that's not a bad thing to have. hi, nancy hom chief financial officer i do want to emphasize that in this current budget

cycle, we have made a concerted effort to highlight the information technology services budget. so you might recall from the first presentation, we had broken that out. and so this is going to be an ongoing thing that we're doing. um, our general manager has ensured that we want to invest in our technology, infrastructure and i think, you know, those are all tracked in business services budget. and so we do have to have an accounting way to look at that. and we do track these items by project. and again there is a operating component. and then there is a capital component. so we can provide that information to you in the future. if you'd like i would love that. thank you so much. that would be great. so thank you. um, a couple of comments also from this commissioner, before you move on, i think as i've said earlier, during this process, that, um, besides the finance that is, you know, necessary during this budget exercise that's going on, there's, you know, the accouterments of, of really, um, seeing as, as commissioner stacy said, you know, the organizational charts, what

exactly are we doing, you know, gets put and emphasized during this exercise as well as the finance. i want to thank not just you, mr. ritchie, and the department, but all the departments for putting this together, because i think that as commissioner maxwell says, when people whether or not they're watching us live on tv or if they're just, you know, maybe a little sick of the niners and they're looking for something else to do if they're if they're coming and taking a look. mr. hardiman. mr. cedric, um, but anyway, if they if they're looking this is actually a valuable exercise, as you know, for us, for us to look. because if there's any of the meetings that we have, two a month of looking at this process just to say, hey, what exactly is going on is really helpful. and so that's, uh, something that i just want to emphasize and thank staff for putting that together. i also want to before you move on, i do want to, um, also reiterate what i've said before, and that is, is that the realign mint and the temporary to permanent position emphasis as policy has been re-emphasized by you, and we appreciate that.

and i know the workers appreciate that when they're moving forward. um i also want to add on, because i actually wasn't going to think of it until commissioner maxwell put it, i would like to when it comes to hiring and who does the work in the department, in the different departments and enterprises? i do would like to hear a follow up with an emphasis of, you know, really, what do we have? what can we do in-house and what can we do? um, as a contracted out piece, because we're approving contracts all the time because that's part of the nature of what it takes to do all the work. but, you know, the fine line between what can be done in-house and, boy, there's only one other person on earth that can do it, and therefore we have to contract it out. that is often a source of anxiety in the city. and i know in particular within the work force, i can do that stuff. and whatever. so i do want to, uh, emphasize and i think you've mentioned that in terms of other presentations that that will take place. i also, you know, and this is not

going to be a question. i'm trying not to make it a question, but you know, as we go through this process here and i'll be really put a marker down, i'll be really curious that once you guys end up going to the mayor's office and the board of supervisors in the big city budget process, you know, what particularly changes as you go through this, this other process? we'll be looking forward to that. um, also, i know that there was a lot of emphasis on one of the what we'll say the newer facilities. i know all alameda is probably one of the maybe the third area of the original sources of water. we had our creeks in san francisco. we had all the stuff down in san mateo, but alameda was a big part early on of, you know, what our sources are. and now this is all being revamped and redone and, and the cultural aspects are all put in. i want to reemphasize that i think a few of us, as commissioners have said, we'd really love to, you know, get out there and take another look to see what the heck is going on with all that wonderful work that we keep

hearing about and approving, i think that would be emphasized. and i in particular, one of the older, um, places that was brought up and that i'm just going to put a marker down myself. i would like to, uh, go and see that, you know, post civil war era pilarcitos, um, facilities which, you know, again, everything has to be maintained over hundreds of years. i would like to see that also. so um, those are just a couple of comments that i have before you continue. so thank you. and unless the commissioners have any other, um, follow up questions, let us, uh, mr. ritchie, please continue. sure uh, and i was only sick of the 40 niners at 430 yesterday. right got better after that. it did. uh, if i can have his notice to. right. yes all right. so let me talk about the capital programs now, because that is a big element of what we're talking about. uh, and the water enterprise capital programs are really three separate ten year programs. uh,

there's local water, which is about $1.3 billion. uh, and that is dominated by the replacement of water mains, uh, plus the new yard that we're working on. if you look at that, ten years, those are the big, uh, spenders in there or the big areas of expenditure. they're important expenditures. uh regional water is about 1.6 billion. that's dominated by water treatment and transmission, uh, funding plus, again, a new yard there down at millbrae. uh, so those are the big ticket items there. uh, and then hetch water, uh, about 1.5 billion is dominated by replacement rehabilitation of aging facilities. it is, is, uh, the biggest driver for our work up there. so how did we develop these capital programs? uh, well , we started from last year's ten year sips, uh, and did various things. we updated project information for scope, schedule and budget. uh, we identified new priority

projects, uh, in that on those updates and also the deliverability area. uh, we were really closely working with the infrastructure bureau, uh, to look at those things and emphasize spending down the existing appropriations and focused on the first two years of the ten year plan. but again, it does need to be a full ten year plan, because we do need to be looking to the future. so the result that we believe we've got here is 310 year deliverable and affordable plans. and affordability was a big question . uh, throughout this process for us, um, on the local and regional front, uh, what's called the water enterprise capital plan, it's about $3 billion. uh, so those two together come to about $3 billion. the bar chart on the left, uh, shows the red line, which was last year's ten year plan. uh, and then the bars there, uh, going across the dark

blue bars, part of the bars are the regional projects and the local is the top part of the project. uh, you'll see that in the early part of it, uh, there is significant, uh, expenditure on the local front. that's driven partly, largely by 2000 marin and main replacement, uh, and the dark blue then starts to pick up, uh, being largely driven by the millbrae project. so you can see that summary on the right of where the largest drivers were in terms of increases. but the increases aren't the whole story. and that's what i'll be talking about later. increased these are just an element, but some of these have been funded for a while and have been in the project and the program for a while, and they're starting to come to fruition on the hetchy side. and, uh, the plan has also grown by about 570, $557 million. and most of the growth growth is in power assets. and when we say power, we mean the

power assets and the power portion of the joint assets as well. so a lot of spending on the power side. uh, so you see there again, that red line, uh, what you saw was, you know, the numbers coming down over time because there were projects which we really hadn't, uh, you know, realized in the future part of the program. so the yellow is the water portion, the green is the power portion in the purple is the joint portion. uh, and those three big bars out there in 30, 31 and 32, that is the moccasin penstocks project, uh, which has had a major increase and i'll talk about that project later. but that is a very, very important joint project that we are getting we are embarking on right now. uh, but there are various other projects we've got to be, uh, doing over time. san joaquin pipeline valve replacements, uh, building those, uh, here, you see transmission line clearances. you know, there was

the money, there was a small amount of money in the programmatic, but there's larger money here. this is for actually physical changing of lines where we need to make improve the clearances. and so this is a big part of our program. so so getting to the, the specific details on the local water capital program, uh, main replacement is a big piece of that. uh, it's about $604 million over the ten years, which is, you know, a little more than half of the, uh, of the budget of the capital budget, uh, local water conveyance distribution, which is that's longhand for main replacement. uh, this is our bread and butter main replacement program is about 517 million. and that's where we get to set all of the priorities for the local water conveyance joint transit, our projects that we're doing jointly with mta. so there's about $33 million there. uh, and piping for the potable emergency fire fighting water

system is about $54 million. so all of those are new pipes under the streets, and they collectively add up to about $604 million. you can see those photos there of, you know, the type of work that goes on on an everyday basis. uh in the streets of san francisco. uh, the next slide, uh, we talked about the new cd headquarters at 2000 marin. we are beginning construction on that project at, uh, the i say late 2024 here. what i've been told is august of 2024. so i'm hedging my bets a little bit as far as actual start. but we expect to start this year. uh, on actual construction, there. uh, in the ten year plan, there's $343 million, but there's excuse me there, there's already appropriated $50 million because it's roughly a $400 million project for doing this complete new yard. uh, and that's what you see below, uh, is a

rendering of what the what the facility is looking like. uh, the large structure in the front is a parking structure. and then on the upper left of that, or upper to the right of it a little bit, is the administration building and some of the start of the shops. and then shop facilities all around that. so it's a nice compact, relatively compact, but you know, we think it's going to be a nice area for the employees to work in and will be good for another 50 to 100 years. uh, so this is a big project for us here in the city. um another of the local water capital program highlights, uh, is a project that has been underway for a couple of years now, and that is eliminating all the last traces of lead in our system. um, we call it the lead component services program. and that diagram to the left shows the piping that comes into people's houses from a water main. uh, and if you see in the lower

left, there's a little red strip called a gooseneck or a pigtail. uh, and that's what you see there in the right. that was what plumbers used to use because you had hard, fixed pipes. uh, and then you had to make the connection. and so lead because it's very soft. you could twist it and bend it and make it fit. and so those are the bad guys we're looking for now. we don't think there are that many of them, but we have a few that are unknown that we're out there right now actually digging up the streets and looking and finding if there's anything there that needs to be replaced and replacing it. uh, so that program, uh, is well underway and hopefully will be knocking out that chunk of lead, uh, soon, uh, sort of precursor in the future. uh, we may end up getting into the property side under different state or federal regulations that come on. that's that's an area that that in various parts of the country historically. well, that's everywhere historically, the you

know, our service stops at the meter. uh, but there's more and more pressure to take care of it, at least up to the house or a residence or building or whatever it is. uh, because that's where you can have older and particularly inside buildings, is where you may have older plumbing. that is still a problem. um. on the regional front, uh, there's the millbrae yard campus improvements. that project is just getting really rolling now. so, uh, it's probably about a $411 million project in the ten year plan. uh, and this is really driven by a variety of things. one is that our water quality division in parts of our natural resources division and water supply and treatment division are housed in a building in burlingame on rollins road. uh, that, you know, we we've been tenants in for a long time and ended up acquiring because the owners, you know, were leaving the business. uh, but it's

seismically unsafe. and we need to relocate out of that building . so the biggest driver here, one of the biggest drivers, is having to relocate people out of rollins road. the second big driver is our water quality lab in millbrae. uh, admin building. uh, it is outdated and this is a constant area of change in terms of analytical techniques. uh, and so that on the layout there on the right, you see at the top there a new lab and office building, uh, that would be, uh, the first big component of this. um, we have a shops building that is unsafe and unusable. it it didn't even merit including on the diagram because we don't let people in it anymore. uh, because it's really unsafe. it's there between the existing auto shop and warehouse and what will become the natural resources and lands management shop. that building is unsafe. and so, uh, we are looking at taking the, uh, uh, existing osh building,

which is there a tenant of ours, as their lease is expiring and we want to take over that building and relocate a lot of our shops into that building. uh, and then as we do this, uh, we also then want to be able to take care of a number of temporary outbuildings. there's trailers, there's an old cottage , uh, there's a lot of, uh, storage containers scattered around the yard. uh, relocate those into these. and then the last step in terms of phasing would be rehabilitating the existing administration building. it was built in the 80s. it still has some good life in it. and we think we can rehabilitate that and make it very much improved workspace for everybody there. and have all of our staff, uh, on the peninsula area located in, uh, one yard here. so this is the, the regional companion to the 2000 marin project. um another activity on the regional front.

uh, our three projects at the snow valley water treatment plant, uh, in the ten year project, they collectively add up to about $175 million in the ten year plan, where 190 million has already been propriated. so they don't show up as a big increase. but these are big projects for us. uh, so the ozone treatment project is a single biggest one of that, which has 107 in the ten year plan and 145 million. that's been previously appropriated. that project, uh, we just got bids in in the project. i'm not sure what the answer is on that, but that's something we're looking at right now is, okay, this project is finally ready to go. and it's an important one for the control of taste and odor and also has very positive benefits for disinfection byproducts as well. uh, we also have additional improvements at the smell treatment plant. we've actually done a lot more at heritage casey, but snul hasn't really been done to the same extent. and so we have short

terme improvements. uh, that would be another $78 million and long terme improvements are a little further out for another $35 million. so the snow treatment plant will get a lot of attention in this next ten years. uh, another one. and i didn't include pictures of the pipelines and i apologize for the for the acronyms here, but these are really long ones. so i will just recite them for you. we actually have five major transmission main projects, about $196 million collectively in construct in the next four years. uh, beta vision pipelines one through four lining repair because we have four pipelines and we have a new in the fifth. but that does need repair. now that's a wisp project. uh, they need repair, uh, repair placement of some of the bay division pipeline, prestressed concrete cylinder pipe. uh, this is an older type of pipe that has shown itself to be prone to,

uh, explosive failures from time to time. uh, and we've experienced a couple of those in our system. and so we're gradually moving around to get rid of all of that kind of pipe. and this is just another step in that process. uh, we also have a union pacific railroad crossing for bay division pipeline three and four, uh, that we have to upgrade for about 18 million. and then crystal springs pipeline number two, uh, a number of reaches that were not covered in the wisp program. several were, but some were not. and this is taking care of those that were not, uh, improved during the wisp program. so, again, collectively on these five projects, it's about $196 million worth of construction beginning in the next four years. so these projects are are finally ready to go. um, on the alternative water supply projects, uh, we have three categories that i'm going to highlight here versus the daly

city recycled water project. i don't have a diagram of that on the slide here, but that is expanding the recycled water capability at daly city's plant so that we can deliver recycled water in conjunction with california water service to the cemeteries in colma and take them off of the groundwater system so we can have better control of the groundwater system for us and have a more appropriate type of water for irrigation of grass there. uh, the los vaqueros reservoir expansion project, that is the diagram on the left. it's a reservoir in the contra costa water district service area that is being expanded. uh, this project, um, i said a couple of times, i'll say again, this is institutionally the most complex project that we're dealing with. it involves eight partners from other agencies who are all part of this. uh, and, you know, kind of the technical issues are, frankly, easy. the institutional

issues about who gets what and who controls what and how that works out, uh, is a bit harder. and we're working through that now. and and, you know, we have it in the ten year budget. uh i will say on the record here that, you know, at this point in time, we think we should be a part of that. but but the final decision isn't going to be for another few months. uh, and the answer may come out that it's not worth it to us. and we should not be part of this project. we're happy to plan and help and really analyze, but, you know, we're going to get to the decision point in the near future. and it will be an important decision for the commission to make. uh, and then lastly, we have purified water projects in developing. and i know that was a discussion a bit at the last commission meeting. uh, we are working on for purified water projects. when we say purified water, that means, you know, converting water, wastewater to drinking water.

uh, and the one on the right, the figure on the right shows one of those, uh, that is the perennial pure water peninsula project, where we are working with the city of san mateo and silicon valley clean water, which is the redwood shores area, uh, with those two wastewater treatment plants, uh, to come up with an advanced water treatment facility that the water could be used either for indirect or direct potable reuse. uh both options are on the table. uh, there's a lot of folks who are interested in participating in that. there's a lot of good energy there. uh, we all know that, uh, you know, we have to do a lot of good, strong public outreach. you know, before, during and after delivery of purified water. because there will be you know, some concerns in the public. and we need to manage that public expectation. uh, so that's that's one, uh, one of the projects we're working on, uh, we are also working in fremont with the alameda county water

district in union sanitary district on a similar project. uh, over there, again, trying to figure out if it's better to treat wastewater and put it into their groundwater basin. there or or have them do direct delivery or have it come into our system. so all those options are on the table as a way to advance their, uh, that project is moving a little slower than this one. uh, that i pointed out earlier. uh, and the third in the region is working with, uh, san jose and santa clara and this is a project that we are, uh, doing jointly with them. i think the commission approved last year. uh, and an mou among the three of us to begin the initial planning on that, uh, and that project checked, uh, uh , who would take advantage of the san jose santa clara wastewater plant effluent there? uh, for production of purified water? um, the, uh, the work

there, uh, may involve work with valley water, valley water. uh, santa clara valley water district uh, has been visible active in this area. um, they're still a ways from actually doing anything. uh, and that's something that we're keeping track of, of, uh, you know, we've partnered with them on some things in the past, but, uh, uh, you know, partners are are different partners. a little more challenging than others? uh so we're going to see how that evolves over time. um, but the last thing i want to mention is, uh, working on direct collaborate with wastewater enterprise, uh, on a project that would be in san francisco. we actually had a report done, uh, about a year ago, uh, that had two purified water projects in san francisco and one in the west side and one on the east side to make sure that there were no complaints that somebody else is getting better water than us, that we're all getting the same kind of water. and it's

all really good water. um, and so we'll be working with wastewater on those. uh, and one of the key questions that we actually just, uh, had a discussion on last friday afternoon had been a while is how will that purified water project, uh, work in confluence with nutrient management? uh, and it's not there's not an obvious answer there, but there's a lot of things worth exploring. and so we may be able to come up with an answer that is better, as i think somebody said in the meeting, it's like, well, if it would cost $1 billion for a nutrients and $1 billion for purified water, and if we can do something together that only cost a billion and a half, that sounds like a win. i said, you bet that sounds like a win. that's that's kind of the goal we have to be thinking about here. not not what's yours and what's mine, but how do we have a better overall project that is more cost effective? so a lot of work going on in those areas, but they are all still in

the planning. uh, arena. uh, moving up to the hetchy side, um, starting with the projects that are actually in construction right now, uh, the mountain tunnel improvements of folks, folks have all taken tours up there to see that, uh, that project is progressing. uh, we may have some changes coming forward on that, uh, to bring to the commission, but, you know, right now, we're still progressing, uh, quite well in a lot of the different activities, the shaft and the, uh, adit access and the repairs are really moving pretty well. uh, moccasin powerhouse projects, uh, the replacement of the, uh, two generators there. um, you know, the two photos on the left are are of the generator replacement project. one pulling out the guts of the old generator. and the middle one, there is kind of what it looks like inside the surroundings of a generator. uh, as it's finally exposed. um, those projects are

really important because all of the drinking water of san francisco actually goes through the moccasin powerhouse. so getting these facilities in shape is good. this project we're looking to be at substantial completion even during this shutdown, uh, the hetchy system for the first unit. and then we'll be doing the second unit during next year's shutdown, uh, so we can make sure we get that, uh, fully operational again. uh, and then the san joaquin pipeline valve and safe enteric project, uh, that it's a photo on the right of that basic. only what this involves is, you know, to make sure that you can get into a pipeline safely. uh, oftentimes, what you need to do is have a double set of valves is what we've come up with is a solution where, um, basically, if we're going to take a pipeline out of operation, we have, uh, a spool piece that we can take out, make

it a half load, you know, disconnect from the water system. so there's no risk to anybody doing work. so you actually install it, but make it so it's easy to take out, take it out. then you can work on it safely. drop it back in. uh, and i've seen some of these being put together and it's, it's looking great. uh, right now. so that's a, that's an important project for us. um, seven other major projects are going into construction in the next five years. again, this one's a list, just like there was in the regional side, that we have a lot of projects going into construction. uh, the san joaquin pipeline, uh, valve remote control project, that's just, you know, improving control of their valves. uh, the moccasin switchyard rehabilitation. that's the switchyard that's adjacent to moccasin powerhouse. uh, that needs to be rehabilitated. uh, the transmission lines clearance mitigation that's taking out branches and trees and potentially buildings that have impeded where they don't belong, too close to power lines. uh,

the cherry eleanor pumps are two pumps that allow us to pump water from one reservoir to the other, which improves our ability to generate hydropower. so this is an important power generation project. um, canyon tunnel. we have some repairs at the hetch hetchy added. uh, and we're just getting ready to kick that project off. we're getting through the environmental period now, and, uh, and we have two building projects up there as well. uh, the mox engineering and records building, which are old and, uh, you know, basically old trailers that have been in use for a long time and are starting to decompose, and a new mox and warehouse building. uh, so those are similar, but not as complete a scope as the two yard projects down here. but all these are really getting ready to go into construction in the next few years. as uh, and they saved the biggest one for last, uh, on the hetchy front, uh, the moccasin penstocks replacement or replacement project, uh, at

about $322 million. uh, it's a very large critical project because, again, this is these are pipelines that take the water down the hillside and through the moccasin powerhouse. so they are essential to the delivery of water to san francisco. uh, these had been classified as power, but as we did with a couple of other projects, we agreed with our wholesale customers that we could actually classify these as joint having the water revenues, paying for a larger proportion of it. and that's been a good step for us. uh, in terms of being able to move forward. uh, the penstocks were constructed in 1925, so they're basically 100 years old, and you can see this is up at the top where they're if, you know, the configured version, there are two pipelines at the top and then four coming down the mountainside and two at the bottom. and that's because there were four, uh, generators originally. and then when they modernized it with new

equipment, there were two generators. and so that's why we're having two. so this is the two section, uh, and you can see just on inspection that they kind of get worn, uh, on the hillside. uh, this isn't the this is the technical evaluation is a lot more than looking at this picture. and saying, oh, that looks ugly. uh, no, we've been doing a lot of detailed work because people were really hopeful that rehabilitation would be a better solution and a cheaper solution. uh, and everybody has concluded that no replacement is going to be better off. and we've looked at a lot of different replacement options. uh, they're being considered. they all have very similar costs. so there's a leading candidate right now that involves building a deep shaft and then a tunnel from that shaft, uh, which is, you know, what's done in various other hydropower facilities around the world that looks like the leading candidate, maybe we end up with that, but we're just getting into the finalizing what we think the best alternative is so we can move forward. uh, but

this project again, uh, it's in a critical space in our system, and it's really old, just like many other things. and that's why we need to move forward on this project. now so that is the once over. happy to answer any questions on those or other projects or any follow up that's necessary. well, thank you very much again, mr. ritchie, for that overview. um, of setting up the budget. i just got back from new york and i was reminded of a , uh, and i'll probably butcher it an old axiom that said, sometimes cities are better known for, uh, you know, unfortunately, what they tear down and get rid of as opposed to what they keep and restore and, uh, and it's sort of a little bit of a summary of what we just saw right now, because i just remember we were up in, uh, we were up in moccasin. i think all of us. you had a chance to

go up to moccasin and the sea, the tunnel last time around. and i know that when we were at the, uh, we went to see the mountain tunnels. and when we were at the power plant, we looked down and we all took those nice postcard pictures of the penstocks. when we were there. and of course, since then we've realized that not only do we, you know, have to upgrade the 100 year old, uh, infrastructure at the tunnel, but we're now we're at the point where it's like, because of the diligence that is that this department has, that the penstocks are actually going to have to be whacked on and fixed also, in order to make sure that we keep up to the 20th century. and so i'm just sort of recognizing that there's sort of amalgam of that, of that old phrase and that is, is that, you know, it's not one or the other. it's like, what do we really need to do to, to invest in our infrastructure and make sure that our resources, in this case , water is, is going to be available to all san franciscans. and that's what i see. and your report is you know, pretty much, uh, summarized, you know, all the

stuff that we're doing and it's really, you know, good to hear it and to see it all there because that's what we do as commissioners, you know, all year. it's look at, you know, your reports on what's going on. and uh, and it's our responsibility to approve, you know, what it, what the taxpayers have approved to take to fix stuff. so i just want to say a general thank you for letting us know what this all is. that's another good thing that we get to see during the course of the budget meeting that is going on. so that, uh pontification done. um, uh, commissioner jamie questions. thank you. mr. ritchie. i think, um, maybe i'll start from slide 23. um we're talking about the main replacement. uh, you had a bullet point there on local water conveyance, joint transit. um, can you elaborate on that a little bit more? i was i'm very curious. um um, how that partnership up? sure. yeah. go

ahead. yeah. we uh, you know, the local water conveyance distribution. we get to set all the priorities. and so that's where we're trying to make sure that we're doing what's most most important for protection of the water system. uh, the joint projects with basically with mta , uh, are projects that that, you know, mta has a project that they have funding for and they need to do for some reason, uh, and uh, the, you know, the pipes underneath and around, uh, those , uh, those things are you know, that's the time to replace them. uh, so both we and wastewater have to do that, you know, the, the, the biggest of all those was van ness. that was that was everything for everybody. uh, and very frankly, that one wasn't planned as well as it should be and ran into various troubles. uh, so these are ones where we have to work really closely with mta to make sure that we are all on the same page

. uh, and the contracts are all aligned, and, uh, and the management is aligned. so they take a lot of work and it is it's a smaller portion of it. but these projects do come up and, you know, they become a priority for us, even if they might not normally be a priority for us, because this is a once in a generation opportunity to replace those kinds of facilities. and, um, thank you for that elaborate. i'm wondering, do we have how does that communication happen? do we have like a process set up that when they are trying to, for example, do a major project in one of the arteries in the city, somebody talks to someone and they let us know. i'm just wondering what the process is on that. yeah, we run into people on the street and, you know, it's like, look, there is a little bit more thoughtful than that. and i was going to look to steve or katie to say, uh, thank you, commissioners, for that question. um, we've been working on this for the last decade,

really, and started coordinating the wastewater program, had a need to coordinate with, uh, public works to assure that wastewater pipes were being replaced before the street paving program. so we started a very close collaboration on that started with our vms. and then down to staff level, where we met monthly and talked about best way to coordinate these projects. uh, some of them, we decided to contract together other ones, we decided that water and wastewater would go first, and the paving would come behind. um, then then more recently, our our collaboration has expanded to include mta and van ness was one of those projects where we coordinated but not as successful as we had previously done with public works. we learned a lot from that. a couple more recent, um, very successful collab narrations that you don't hear much about because they went really well is terrible. we had terrible a and terrible b, they are now the water and the sewer

pipes are completely replaced and they are doing the track replacement. and that was all coordinated. much more successfully. and then geary has been happening in three phases. the first two phases, which are complete and went very well for those we use separate contracts, um, and then um, 19th avenue was coordinated with caltrans and you didn't hear much about that, but we got a significant portion of water and sewer mains replaced along 19th avenue. so what we've realized it takes is close coordination on collaboration on all levels. um uh, agm robinson meets with mta regularly and uh, public works down to staff level, down to weekly meetings with on the construction sites with our staff participating as resident engineers and inspectors on site. so the close collaborate action has been very successful for us. i mean, i love these kind of projects. they're

definitely and i appreciate you highlighting what often i remind people like what you hear here. uh it's not always the success stories, but we have a lot of on a daily basis, we are running these, um, plays as, um, you know, in shipshape. so nobody really, um, gets to experience, um, some of the issues that might come up in these things. but one thing i want to say is, uh, it the process is super important as you highlighted. and i think the redundancy in the process is super important. you know, because individuals come and go, but you want to make sure you have institutionalized these kind of engagements in a way that if somebody retires, if somebody leaves the job, like you don't end up sort of have it broken, uh, process. right. so i'm assuming there are those redundancy sort of being placed, um, to make this happen. go ahead. yeah okay. my turn. um, uh, thank you. stephen robinson, assistant general manager for

infrastructure. um, yeah. thank you. katie the kind of conversations we're having with mta and public works, certainly at our level and then as that trickles down, is to do exactly what you're describing and put some kind of an agreement, perhaps an mou in place that talks about how do we communicate, how do we partner, what would be a typical project. we can put some protocols in place and then when would there be a variance to that? how would we take a unique situation and do something separate for it so we can be very clear? yeah. thank you. thanks for that clarification. um, okay. so then i have, um, i also want to acknowledge, mr. ritchie, you brought up the on slide 22, the, um, a few of the major and 21, a few of the major capital projects that needs attention. and i can see our, our, um, 1866 dam is, is, uh, needs a lot of attention. obviously um, but it is it is quite impressive to see how we are still operating and maintaining that system. so that's really great. um my next

set of questions goes to slide. um. 29 um, a couple of things i want to say i appreciate your your candidness with the las vegas reservoir expansion because i personally i would prefer we spend the money in the time to make sure we have everything lined up, rather than getting into something, and then, um, coming out on the other side, uh, with not much of a success story. so thank you for your diligence to making sure that, you know, the institutional, uh, setup is, uh, well, well set up and we have the right things in place. and i think in the water sector, obviously. and every, every one of these resource management sectors, we are dealing with a lot of institutional issues and public policy issues, rather than just, um, technical issues.

and if i may, if i may say, please, i'm, i'm just the front person. we have. yes, a lot of staff who are engaged on these, uh, these projects as on every other project, of course. so they're the ones who are there, the ones who are really doing that work right. and i appreciate you highlighting that. obviously we recognize the amazing staff that we have in the in every enterprise, especially the water enterprise. um so, um, the next thing i wanted to talk about was the purified water project, and i just want to put this out there because for city that has sort of, um, been innovative in the front of on site reuse, it is always reminding me that these purified water projects, while great, it still re-emphasizes the model that we have, which is treat water to the highest quality, bring it to people's homes, then they can flush it down their toilets. so which is not a very efficient way of using, um, our resources. his, um, and i would say it requires

a lot of, uh, another thing i would say is obviously the technology is there. the water that's purified. it is absolutely high quality, no doubt in that. it's basically people like desalination. i always remind them it's the same technology you just use it for a different purpose. um, so the water that's treated is obviously super high quality. but that is why it's kind of gives me pause when we are thinking about, let's build another major. and i know you are not thinking about it, but i would like to bring this up because i think it's important. um let's build another major recycling plant and then bring water to people. then they can do whatever activity they do on their daily basis. um, we talked about affordability ahead of time, which is super important. and people often do not realize the biggest cost to afford or the problem to affordability is investing in projects that might not even have, um, enough

customers at the end of it. right? if people start using less water, if we oversize these systems and then not have enough customers to buy them, they can actually lead into, um, under utilized capacity that then somebody has to pay for it. and that means that everybody will be on the hook to pay for the building operation and maintenance of this system. so it's very, very important to, to, um, to think about this right sizing, these projects. and again, i, i do say that i have had a lot of conversations with you and i know you, you you are on top of this. but i would like to bring this up because, again, this is a public setting and people might be listening. and i think it's important for them to know how, um, how much time and effort goes into these decision making process by the staff to make sure we don't end

up investing in the right project, wrong projects, or invest in the right project on the right projects. so so, um. it is very important when you're talking about these whole purified water systems. we don't end up again perpetuating the same model over and over, building major centralized systems that we can't, you know, they need, uh, they need to be like they constantly, um, bring that high quality water if it cost a lot more. um, because you have to use energy resources to treat it and bring it to people. um so one thing and then another thing is you brought this up. and i think it's important because people don't realize there is a big major component, which is the brine management. we also deal with that for our onsite reuse systems. and, um, some body has to deal with whatever is treated and left behind. and i do not think

people will, uh, need to realize or, or, and i don't even think we have all the right solutions for that yet in place. um so, um , so i would like to maybe give you a chance to comment on the purified water supply first, and then also discussing the brine management a little bit in more detail. and i would like to see if we can touch a little bit on also on these onsite reuse systems that we have, um, on the operation side of it, on the brine management side of it, um, and where do you think the right line is because i know, i know, there's no perfect answer to that. and i'm not trying to put you on the spot, but i think it is important when you're talking about our capital investment to think about these things, because obviously has a lot of implications for the future. yeah it certainly does. and i think the, the concept of the whole concept of one water, thinking about it across, you

know, different lines and you know, the, you know, the same solution doesn't work everywhere . uh, and that is absolutely true. uh, in the water business. um, yeah. and i think that is something that we are very concerned about, uh, is that, uh, you know, we need to make sure that the set of solutions we come up with is right sized for our circumstance, which is, as you know, a retailer in san francisco and a wholesaler outside of san francisco. we need to be thinking about both of those arenas, uh, as we move forward here and the answers won't be the same. that's part of why i said, you know, we're looking at four different, uh, purified water projects right now. uh and i, i doubt that we will do all of those, uh, because, you know, the circumstances won't call for it. um, one of the things, uh, you mentioned is, is dealing with brine, uh, and even dealing with , you know, it's easy to, you know, people have talked about

nutrients. oh, yeah. we'll take care of nutrients. we recycled water, we'll take care of nutrients. right cycled water doesn't take care of nutrients by itself. there's still residual someplace. and so how you do it and where you do it really is an important question to answer. i think that's one of the reasons some of the wastewater programs, uh, around the bay are interested in. they're they're seeing these nutrient and other regulations coming, and they're trying to think of, you know, if we can link up with this kind of project, maybe we can come up with a better solution. i think that's why silicon valley clean water is very actively interested. they're thinking that way. uh, on the other side, union sanitary district is actually worried about all these new regulations, and they might have to pay for a lot of other things. so gee, should they be paying for into a part of this? these are these are questions everybody has. and the answers are not simple and obvious by any means. in fact, i saw a table the other day about palo

altos recycled water for drinking water purposes, and there was a column that said, you know, concerns. and the question was brine. and the question was, did we do we need an ocean outfall for brine? well, an ocean outfall from palo alto is a long pipeline. so, you know, those questions are out there. people are trying to answer them and know that if you don't come up with a good answer, the project's not going to be cost effective. it's just not going to work because it's not going to really solve the problem. um, so and on on site stuff, i think, you know, paula and her staff have really been out there on that and really pushing on that and looking at different opportunities. and, and we think that that can work in a lot of places. it doesn't work everywhere. uh and you've got to actually think about a number of the side effects of reusing water in a building. you know, it doesn't necessarily, you know, uh, a classic example

that we've run into. and i'm not sure what the solution will ever be, is plumbing is built to a certain size. well when you stop bringing in less water, all of a sudden the water quality starts to change because the water is aging and it's not flushing through the pipes as much. uh, and it was a great idea to recycle all that water, but all of a sudden, the main plumbing isn't working as as it was intended to. uh, so that's a technical consideration that needs to be there. uh i'm, you know, it's a little easier to list all the problems than the solutions. um, because, again, they will probably be different in different places, but they all need to be thought about and carefully considered. uh, for recommendations for real projects as they come forward. and i just want to highlight that these are the projects that actually challenge us to be more system level thinkers. you know how all these different pieces kind of come together. it's not just as you highlighted. it's

not just one thing. it's many things along the way. and also the regulatory requirement. it's of managing the bay and how the effluent that's put out there is going to change is going to be dictating a lot of the operational processes to which we still don't have a handle on, because i don't even think the water board or regional boards are have a handle on it. um, so i think these are all very important. um questions, but they're not that we don't have an answer for, um, again, i also want to say, since you brought up, um, the water department, i think the, uh, miss kehoe and her team, i think, honestly, like the work that they have done on on site reuse, have been exemplary. uh, we have led that effort every body talks about san francisco as a leader in that i. it's definitely a it is a it's definitely a i personally take it with a lot of pride to

go to meetings and hear, um, how we are always mentioned as a leader in that. so i want to acknowledge that how we have led that effort in the us and, um, uh, internationally. so thanks for highlighting that. um, that, that that's about it. thank you so much for that. thank you. i have no more. oh i'm done. thank you, commissioner maxwell. thank you. um on 2000, marin. um, what are some of the innovative components of that building? what should we be excited about. come on, stop laughing. would well, i'm thinking about all the problems in the existing yard that we're going to eliminate. and those are exciting. you know , um, in terms of new and different things, uh, actually, i would i would rather than try to answer that here, i would suggest that, you know, maybe we give the commission a briefing on that project. that would be good. but i'd like two things. i mean, this is we're doing the

budget. we're about to spend money for it. um uh, so what are a couple of things that we should be looking forward to? well, i think one of the key things there is the, uh, uh, the community of the workforce, the layout there is really conducive to it being a larger community as opposed to, you know, i have to take a half a day hike to get out to the shop way off here in the corner. no, i'm part of that. and i'm, i'm crossing paths with people on a regular basis. so even just that simple thing and in fact, uh, that slide that i showed showed the parking around the outside. the original plan had the parking inside side of the building. uh footprint. uh, and, and our consultants pointed out to us something very obvious. well you're going to have people driving around where people are walking, and that is actually unsafe. and you're going to disrupt the idea of promoting

that kind of, uh, connectivity. so, so that, that that simple change, you know, what i think was an important one, uh, the facilities that we're looking at, uh, yeah. these will be all modern, up to date, uh, uh, you know, facilities for, uh, our, our trades, you know, the, the plumbing shop, the auto shop, um , all of those are going to have of, uh, you know, the latest equipment in them to be able to do the right thing. that's where the conversation about hydrogen has started. gee, do we need to be ready for hydrogen here? and how much space do you need? and is that doable here? do we need to have a shared facility someplace else? uh, those are the things those are the questions we have to answer, uh, and have a clear plan for which might mean we have a hydrogen station at 2000 marin. or it might mean that we do it someplace else. uh, and i don't know where the someplace else

might actually be, but knowing that we're going to need to be prepared for that and making sure our plan accommodates that is the most important step we can do right now. of course, there's solar on the rooftops. um, i think we're looking we're looking at on that at at that in part, um, that is something that i don't, i can't tell you off the top of my head, if that is. i hope it is. uh, but i think that's something we'll be looking at. steve says. yes it is. that's good. good all right. um, and then regarding our, um, wastewater and the and the purified and diesel ionization, um, our public engagement, i hear you talking about that. and um, so is there what do we have? what are we doing? is, is some of that in our budget? because we need to start doing it now. so, yeah, it is in our budget actually for the purified water project, we have started to take

the initial steps here, uh, which is actually we ran focus groups of our own staff, people who do i guess we would consider you know, somewhat informed about issues and trying to see what kind of reactions we get there. and we've got not only our staff, but some highly qualified consultants who've dealt with these issues in other areas as well, working closely with them. and that is going to be part of i think. i don't recall the exact amounts we have in there for the san francisco purified water project, but that is a component of the budget for those to make sure that, uh, and when we all anybody who's been in the business for a while recognizes that if you don't start out, uh, an outreach program early and maintain it all the way through and beyond, uh, the starting point, your project's going to fail. so as part of our ten year budget, uh, two year budget plan and ten year budget, uh, dealing with

public engagement. yes. and just perfect. thank you. commissioner jamie. uh, mr. ritchie, i wanted to actually one thing that i took a note earlier, and it sort of came up with the its discussion and, um, and i didn't see in this part, i was wondering if there is a way for the next time you're having this conversation, if we can sort of think about how, um, we can think about natural assets or green assets that we have and also the information technology and data assets that we have as, as sort of a line items that we can think about it. do we need capital investment in them? how do they work? you know, sort of i wonder what it takes to kind of re tag them. uh, possibly, um, to make sure they do show up. um, in different ways in our, um, capital project. well,

the watershed, our watersheds are huge, single biggest green assets. uh, so the capital program has a watershed component of that, uh, that there are various items there. uh, it's part of the programmatic, uh, effort, but it's also in the operating budget. uh, again, that's that's the primary activity of the natural resources and lands management division, together with some others to some extent. but that's really their bread and butter said that whole division is really focused towards that, uh, in a big way. so i think there are lots of ways we can see that in the budget. we could call it out a little differently to present that, but that is a big deal for us. i do i acknowledge it's under operating budget for sure. i was just wondering if there is a way we can, because i know you guys do a lot more than just i mean, i operate and maintain those. there are also, uh, we do, um, um, prescribed burn. we do a lot of different activities

in those to make sure they're in healthy cells. conditions um, but i'm assuming there are also certain investments that we can we need to do beyond just the operational part. so it's operating and capital as well, right? it's not just, you know. yes. look at look at things and say, okay, it's doing good actually a big deal. we've been going through the last couple of years is removing a lot of non native trees from the peninsula watershed. uh and does that show up in the capital? i didn't see that. that does not show up in capital. so that's why i was thinking like is and i don't want to like for us to actually i do want for us to rethink how we do that, just because i want to make sure we have enough resources for those capital investments beyond just operational costs, that there is just because we're going to depend on them more and more as we move forward, and we might have more issues. so just, um, just would be great if you can think about it and we can. it is not the only area where we have

those issues. yes yes, i am sure. so as the, um, i know every one of those, one of the areas that we have has the data and information technology and data and the whole it's as part of it. and i know that a lot of work happens there, but i wonder if also to make sure we have enough resources to invest in those kind of info structure, we can put them as an item that is separately has its own capital and operational. um, uh, sort of allocation. um to make sure we, we, i mean, i know we are making enough investment, but it's important to call them out to make sure people know what we are investing in. thank you. commissioners. any other questions? comments for mr. ritchie? mr. ritchie thank you. thank you. we will now open up the item to public comment.

donna do you have any members of the public present for comment on item four? a. see miss sankhla. welcome good morning, commissioners. ms. nicole sangkhla bhaskar, ceo um, i did pass this to the commission secretary. so you have a copy of it just because you have a short time. um, i am pleased to see that you have included a robust list of projects and programs as part of this ten year cip, and we do support the proposed budget for both the water enterprise and the hetch hetchy enterprise. i think that's important for me to state, um, a couple issues that i want to call to your attention for you to think about. um, there is some known project delivery issues that continue to impact the implementation of cip projects. um, this is called out in several of the project sheets . you know, that there's delays because of a staffing issue that you're, you know, about this,

um, and the puc's new capital planning improvements initiative , led by deputy general manager ron flynn, has been working to identify how to address this as your largest customer. we would like to be more closely involved in that effort, and i also think it would be important for metrics to be included in it for the commission, so that there's a way for you to track on an ongoing basis how is it doing? and i think that would be an important piece for you. i also think it's important for the puc to document your history of funding. the first two years of your cip with past appropriations. i don't disagree with the idea, but i think it's important to show that more proactively to the public because because it can create the feeling that you cannot deliver your program. and i think that's a risk that none of us want. so i think it's important to highlight that. and then lastly, the future wholesale water customers volumes that are in your financial planning documents, um, those differ from the demand

projections. the bhaskar does. we've talked about this in the past. our demand projections are based on adopted land use policy practices in compliance with state law and compliance with regulatory requirements. rina housing, all of those things. we go through very rigorous process to do that. your financial department's projections are done for a different purpose. i think it's important to cite that source. so it's very clear where that comes from, so that it's there's no confusion about what assumptions are being made for your financial planning purposes. thank you very much. thank you. are there any more folks in the house for public comment? seeing none, do we have anybody on the remote queue? donna. no, we had no remote comments today. no requests for public comment on the remote crew. so public comment is now over. are there any other comments or that the commissioners would like to make

? thank you. so i'd like to donna, could you call the final item? uh, we have a motion to continue the meeting to a special meeting for friday, february second. is there a motion and second to continue to motion to continue? second, roll call, please. president paulson, i vice president rivera, i commissioner jaime i commissioner maxwell, i commissioner stacey i and you have five eyes. eyes we will adjourn until next friday at 9 a.m. and we are will be in room four. we'll be in room 4416416. not this room, but 416 down the hall. thank you.

>> providing excellent customer service to each other so that we can succeed together. because we're a small division out here, and we're separated from the rest of the p.u.c., a lot of people wear a lot of different hats. everyone is really adept not just at their own job assigned

to them, but really understanding how their job relates to the other functions, and then, how they can work together with other functions in the organization to solve those problems and meet our core mission. >> we procure, track, and store materials and supplies for the project here. our real goal is to provide the best materials, services and supplies to the 250 people that work here at hetch hetchy, and turn, that supports everyone here in the city. i have a very small, but very efficient and effective team. we really focus hard on doing things right, and then focus on doing the right thing, that benefits everyone. >> the accounting team has several different functions. what happens is because we're so remote out here, we have small groups of people that have to do what the equivalent are of many people in the city. out here, our accounting team handles everything. they love it, they know it

inside out, they cherish it, they do their best to make the system work at its most efficient. they work for ways to improve it all the time, and that's really an amazing thing. this is really unique because it's everybody across the board. they're invested it, and they do their best for it. >> they're a pretty dynamic team, actually. the warehouse team guys, and the gals over in accounting work very well together. i'm typically in engineering, so i don't work with them all day on an every day basis. so when i do, they've included me in their team and treated me as part of the family. it's pretty amazing. >> this team really understanding the mission of the organization and our responsibilities to deliver water and power, and the team also understands that in order to do that, we have a commitment to each other, so we're all committed to the success of the organization,

and that means providing excellent customer service to each other so that we can succeed cisco public utilities commission is called to order. this is the last of the meetings as of the last and continuation of the of the budget hearing. so can we have a roll call please? president paulson here, vice president rivera here, commissioner jeremy, here. commissioner. maxwell. commissioner stacy, here. you have a quorum. all present. okay so i'd like to announce that the san francisco public utilities commission acknowledges that it owns and are stewards of the unceded lands locatit