president vietor: good afternoon. i would like to call the meeting of the san francisco public utilities commission to order. mr. secretary, could you call the roll? secretary housh: [reading roll] i would like to note that commissioner caen is on the way. president vietor: next item. secretary housh: the approval of the minutes of july 12, 2011. >> president vietor: approved? next item. general manager harrington: --

secretary housh: public comment for members of the public may address the commission on matters that are within the commission's jurisdiction and that are not on today's agenda. we have no cards. president vietor: anyone? next item. secretary housh: identifies, -- i no. 5. -- item 5. general manager harrington: -- president vietor: can hold this until commissioner -- can we hold this until commissioner caen arrives? which item?

yes. vice president moran? vice president moran: usually, it is a very detailed conversation about how we seek to balance these overtime. we really need to look get that and see what the implication is for rates for both water and on the power side, so i just suggest that we put this so that we can deal with the big issues before we get into the more detailed review of the budget. and then, there are a couple of policies that were listed as enterprise policies, and my intent is that we establish policies of those areas.

i have seen a draft. it makes sense to start and then extend it in others. but i wanted to be clear that my intent was to have those affect all three. president vietor: thank you. other questions or comments on the communications? hearing none, next item. secretary housh: the next item with the other new business, if the commissioner has any item. vice president moran: this is a question on the time budget. i think we have not been able to fit in folks a couple of times, and i think it would be useful to see if any of us have any time limits we are working with and how much time staff needs so that we can make sure that our discussion is wrapped up. my time is that i do not have

any particular time limit today. president vietor: how long will the closed session items take, approximately? " secretary housh: i think if we had 30 minutes, that would be good. president vietor: commissioner torres, when do you have to leave? commissioner torres: i would like to leave by 5:00 at the latest. president vietor: i appreciate that. vice president moran: if we wrap up our business, we should be able to do that. president vietor: next item. secretary housh: item number seven, a report of the general manager. >> we want to start with mr. rydstrom. we sold bonds last week.

>> good afternoon. we went to market again last week and sold water revenue bonds. if i could have the commission secretary go to the overhead projector? a very successful sale, achieving $18.10 million worth of interest savings over the lifetime of the 30-year bonds for ratepayers. that includes refunding some of our 2001 and 2002 revenue bonds. competitively, we sold the bonds. once again, we have bank of america, merrill lynch the winning bidder. on the next slide, slides 3, you can see all three sales. some of the bonds were the largest, $603 million. we had several bidders, and bank

of america/merrill lynch once again the winning bidder there. to help put this into perspective for bank of america/merrill lynch, they have been one of our largest buyers since 2006, and the enterprise has been selling a great deal of bonds. about $1.60 billion total they have purchased, including what they have just purchased. this bid was to fund our hetch- hetchy facilities as well as our water in the city. citigroup global bought those, and then our bank of america/merrill lynch bought all of the re-fundings. so we premature cheap what was adopted as part of the last budget hearing. in that model, we had an average cost of borrowing. we achieved an average overall

of about 4.48%, so we are pretty close. the items that also happens, the bond sale, moody's did downgrade us given our weakness. we had thought that would occur. moody's previously had as one notch higher than s&p, so now, with the movies in adjustment -- the moody's adjustment, what that means is we are still very much on a roll with the debt. a strong aa. we noticed in the electronic markets, as we're required to do with our material disclosure, and all of our bond documents, for our build america bond revenues. president vietor: commissioner moran. vice president moran: did they

state a reason for the downgrade? >> this is on a current basis as well as a projected basis. what movies does is just take them all and line them up in a row, and based on our current level of water sailors and the cumulative fund balance reserves, that made us go into the third notch of aa. vice president moran: and was the size of the balancing accounts an issue there? >> they factor in all of the cash we have available. and also noticed a long term strength of the economics.

we cannot fall out of sync. the willingness of the commission to adopt the rate increases that were needed and the cost management, the efficiencies. they did give us a lot of credit strength, which we should be proud of, nevertheless. that is where we stacked up for them. vice president moran: thank you. >> the next items on the calendar, we will be going to market next summer. what this means, through the sale, we have sold $3.30 billion of the improvement program of

the total. we have locked in ratepayer savings because we sold long- term fixed-rate debt, not unseen since the '60s. three under $84 million for ratepayers. future outreach reports. we will also be working on some bonds, as well, to take advantage of these as well as some conservation bonds. that is it. further questions? president vietor: questions? comments? thank you. >> there was a letter about possibly closing bacon street,

and i wanted mr. moala to talk about that. >> toom -- tommy moala, communications. this is the reservoirs, the north and south basin. bacon streak extends longer than that, but this is just between the north and south basin. over the last years, the section of road has been closed due to construction we have been doing at that reservoir. it has been closed for all of our construction supplies and in line with neighborhood impact. that work is still ongoing as of now. so as we are looking ahead to the future, one of the things

that was discussed during the planning stage of this project was looking at security options for the reservoir, and because the street does bisect about one-quarter of the water to san francisco, we decided to install these as part of the project. these can be raised or lowered on the right-hand side. and the reason why these were installed was to provide operational flexibility in the event of an emergency, and if we ever need to close a street of, we can limit access. basically whenever we need to. and now, we are hosting on july 28 something on bacon street with a neighbor to talk about the long-term plan for the stretch of roadway and whether or not we want to concede -- continue with this.

this tree is bisecting a drinking reservoir pecan -- reservoir. i am happy to take any questions. president vietor: so those are going to stay down? what you call them? they had issues with the street being blocked. >> there are some issues that have been raised for our public safety vehicle. so we have been talking to both the san francisco police department and the fire department to make sure there are no overriding safety concerns.

the fire department says they do not even have a on the map. another thing to note is that this is a nonconforming city street. about 24 feet, 9 inches in width. a conforming city street is about 40 feet in width, so it is a little bit narrower, and emergency vehicles when likely not use this narrow street, because if there was another large vehicle coming in the opposite direction, you would not be able to get past one another. that is part of the conversation we will have with the community. president vietor: ok, great, so that will help to inform the situation going forward. if that happens, that will be great. any other questions or comments? thank you. yes, please. et can you come up? -- can you come up? yes, there was a letter that

was a public record letter that was submitted from one of the neighbors, saying that they do not want it closed. it feels like a part of the neighborhood, so, hence, the community meeting to get more input from some of the leaders. >> next up, lake merced, and we went to report the status on that. as you know, we wanted to have an mou, and it is on the agenda today, and there is a report. >> the general manager for water. we have been working with rec and park for some time. we produced a draft to that and put it out and had a public meeting last tuesday evening at the clubhouse. 43 people attended, and we had a lively discussion. we heard comments that focused,

having me pu -- the puc take complete control. people have been disappointed in the management of lake merced. there is a desire for an additional boat house. a lot of people fishing, boating, different kinds. again, we heard a lot of commons. we have been summarizing those. we are aiming to bring it back to the commission for consideration in september. president vietor: and the issues primarily at the community are what? they would like the puc to maintain control is possible, rather than the split control? >> yes, you raise that it is a range now -- the way that it is

arranged now is general resource management, they are managers, some people have been disappointed and have an interest in the pc taking more responsibility, so this is what we need to find. >> and it comes down to the fact that a number of neighbors know that we have money and that they do not, and as long as they are responsible for doing things without much money to do it, they will not have as much. whether they can fix the war for fishing or other things like that.

and we have said that recreation and parks is in control of that, not the puc. president vietor: saving money? >> it is an issue. there are a lot of parts in need of assistance, and we would have to do some increases to take care of that. >> obviously, the difference is this is an asset of ours that we irresponsibly -- responsibility for to a certain degree. how much of management or natural resources can we attribute the money to? that is the challenge. president vietor: is there some way to contract with rec and park? >> we actually do for some basic maintenance and upkeep of the area right now. president vietor: what about

some recreation services? >> that is what we do. president vietor: yes. commissioner: i think that is part of the purview, not we decided we give money to another agency. if the agency is lacking money, then they should go to the board for more money, a park bond, etc., or if they want to have an opportunity or democracy. >> while i would like to be clear, using the new four of the recreation. commissioner: and let the

ratepayers' decide, not a small group of people. >> there are a number recommendations about what should be done with the future of lake merced. there are boaters. there is the pacific rod and gun club represented there as well. the audubon society and the coalition, a number of different folks. things that folks feel pretty strongly about lake merced.