e, i have a motion and a second. all those in favor? opposed? the motion carries. commissioner quarter, what is your pleasure with those three items -- commissioner courtney. commissioner courtney: there are components related to jurisdictional work -- landscaping, gardening, etc. i've had conversations with staff already today. i do not see anything on its face right now that is a great cause for concern, but there is a need to gather more information and do more outreach. staff is not prepared at this time to answer the questions we have, as the winner of those items to the next agenda. commissioner moran: without objection, they will be continued to the next meeting. i would like clarification on item i. my understanding is that this work would be awarded subject to competitive process.

if you could clarify that. >> it was a competitive process. we did have five proposals. the winner was the highest- scoring. we had four panelists. it is not in the agenda item, but the resolution does talk about how they were the highest- rated proposal out of the five. commissioner moran: ok, thank you. any other questions? >> i have a question. is the $33,000 sort of the going rate? >> it is for the size of space we are renting to them. once we get into the building -- i think it is the going rate at this point, and that was part of the package that we looked at. commissioner moran: any other questions or comments? >> i have a question on the items commissioner courtney continued.

just to make sure it will not be a problem, that we will be able to continue operating under the current permit. >> that is correct. some of these are to replace the current permits, but it does not affect operations. commissioner moran: thank you for that clarification. on item i, there's no additional questions. is there any public comment? seeing none, could i have a motion? moved and seconded. those in favor? opposed? the motion carries. if you would call item 9. >> approve revisions to the schedule and cost of three projects being delivered as part of the water system improvement program -- new irvington tunnel project, the bay division pipeline reliability of great

pipeline project, and modification of the existing d chlorination facility project -- existing dechloramination facility project. the total cost impact of these changes is $7,487,700, and the overall program schedule and cost remains the same. >> you should all have a copy of my power point slide. if i could be connected to the system, great. my apologies for not having these in your packet. i just decided this morning that it would help put things in perspective to have a presentation for you. i also wanted to point out that included in your packet is a letter from bawsca in response to our proposed changes. before i get into these proposed

revisions, i wanted to highlight once again for you where the program stands as of today. the program as a whole is 50% complete, based on expenditure. you can see on this slide a breakdown of where each of the 81 wsip projects is at. at this point, we have completed construction once again on 2/3 of our projects, and we have 19 currently active in construction. we will be seeking approval today for a new construction contracts, so that will bring our number of projects in construction to 20. we only have four projects remaining in planning and design. so why is it that we need to approve these revisions to the program? whenever a project encounters significant issues in the field that have an impact on cost

and/or schedule and that' -- tht we can at mickey d's impact, that is when we need to consider revision to what has been approved to these projects -- that is -- that we cannot mitigate impact, that is when we need to consider revision to what has been approved for this project. it allows us to have a more realistic base line against the measure performance. if we try to measure performance and give unrealistic baselines, then the measure of these performance indicators is pretty much meaningless. finally, the california water code requires will identify any project behind schedule and that we provide either a plan or timeline for making up the delay

or for revising the schedule. the last time this commission approved official changes to the program was in july 2011, and at that point, these changes involved only very minor project levels. the most significant change a year ago was an extension of the program from december 2015 to july 2016. the overall program budget remained the same, but we have some savings that the project level that we were able to consolidate and create a program management reserve. that reserve at the time was $161 million. as part of these revisions, we also move 5 water supply projects from the wsip to the water enterprise cip. these are the revisions we propose that we are seeking

approval for today, and they focus exclusively on three projects. today's revisions do not involve any changes in scope and do not change the overall program dates, and they do not change the program budget of $4.59 billion. let me briefly go over the changes -- the scheduled budget changes we are proposing. the new irvington tunnel is just over 50% complete. we have encountered a number of challenges with the project. we had to excavate through rock material that was much harder than what was documented in the contract. the work was also reclassified by calosha, and that is where a

lot of the cost impact came from. there was also a need to control a significant amount of ground water -- groundwater seepage, and that is what impact the schedule the most. this commission authorized the general manager to approve schedule extensions of to 400 days, and the schedule extension we are seeking your approval for today includes officially the 400 days as well as an extension of the closeout period to a six-month timeline, which is standard on our projects. the cost increase -- $4.7 million of the $6.5 million is direct, hard construction costs.

the increase is required to be able to provide the project management and construction management services needed for the completion of the project. the bay division pipeline project is now 90% complete. the original plan for the project was to build a pipeline using two different construction contracts. both of these will be completed by the approved project schedule. however, during construction, we discovered an extensive archaeological burial site in the vicinity, which is on the peninsula, and it was determined it would be most cost-effective and efficient to deal with it by my " tunneling under the site using separate construction contracts -- by micro-tunneling under the site. i wanted to point out that back in july -- since july 2011, this

commission also approved a significant increase of $13.9 million for the construction of this overall project due to issues related to the east bay contracts and that additional money was needed to address unforeseen side conditions. there were a lot of impacted properties. the treatment and disposal of groundwater as well as the need [inaudible] finally, the third project has been affected by a number of issues as well. we have encountered the current site conditions related to the added bills related to the existing facility. there needed to be some design modification to meet some specific criteria for this

facility. what we are trying to do there is very difficult. trying to use chemicals in a place where you have a lot of flow increases. very challenging. there were also delays caused by flooding in thailand, which is where a lot of our equipment is coming from, and there have also been contract compliance issues with the requirement led the office of labor and federal forssmann. the original contractor actually defaulting on its contract in obligation, and we have to replace the contractor. all in all, despite any challenges, we are approaching completion on this project. that concludes my presentation. i would be happy to answer any questions you may have. commissioner moran: thank you. commissioner torres: did we find

out which native american tribe is associated with the burial site? >> i thought i sent an e-mail on that. i do not remember. i know i have an e-mail. i did do the research. commissioner moran: other questions for the commission? this is not an action item -- >> it is actually an action item. commissioner moran: is there any public comment? >> art jensen wiht bawsca -- with bawsca. we recommend that you approve the proposed schedule changes. we find them appropriate. we also recommend that the cost impacts continue to be included in subsequent reports to the commission.

commissioner moran: any other public comment? seeing none, i have a motion and a second. all those in favor? opposed? motion carries. item 10. >> item 10, approve the selection of epc consultants in the seismic upgrade of a division pipelines three and four at hayward fault to provide various project-specific construction management services, authorize the general manager to negotiate and execute a professional services agreement for an amount not to exceed $8,500,000 and with iteration of three years and four months. >> if you want to call both items, they are related. >> item 11, approve the plans and specifications and award a contract to seismic upgrade of a

division pipeline numbers three and a four at the hayward fault in the amount of 31,320,000 and for a contract duration of 825 consecutive calendar days to the lowest, qualified, responsible, and responsive bidders. >> this is a great project milestone for us to move one of our most critical seismic projects into construction, so we are all very excited about that. the bidder did bid $23 million under budget. commissioner moran: that is fabulous. >> i would like to move the two items. >> second. >> public comment? seeing none, all those in favor? suppose? the items carried. item 12. >> item 12, approved amended two to cs-898 new diversion dam road bridge of great with jones and

stokes in order to add the completion of the alameda watershed habitat conservation plan to provide coverage for water supply system and land management operations and maintenance, and authorize the general manager to execute this amendment increasing the agreement by $584,000 for a total not to exceed agreement amount of $1,034,000 and with a time extension of two years. >> this is a contract amendment to allow us to seek the alameda watershed habitat conservation plan, which is necessary as part of the permitting process for maintenance of our bridge and other facilities in the alameda watershed. this is a critical environmental step to make sure we can operate the facilities we develop there. happy to answer any questions. commissioner moran: commissioners, questions? is there any public comment? seeing none, can i have a motion?

moved and i will take that as a second. all those in favor? opposed? the motion carries. >> item 13, authorized the general manager to execute grant agreements with applicants for the non-potable water program. funding of $500,000 is available for fiscal year 2012-2013 for this program. >> this is to authorize a water- conserving grant program similar to our large waterscape grant program. it pairs of with the non-potable water program discussed earlier and will allow us to grant funds of up to $250,000 to building developers either public or private to assist in achieving significant water savings. the required savings would be toilet flushing in large buildings or up to 40% of all non-billable use within the building. this, together with the non- potable gives us a real good start to make inroads on the program. it has been a significant

collaboration among the water enterprise, wastewater enterprise, city attorney's office, apartment building inspection, department of public health to make this a reality. happy to answer any questions. commissioner moran: thank you. commissioners, any questions? is there any public comment? >> i enthusiastically move. commissioner moran: i think we asked for public comment. >> i think this is a great program and innovative. i am sure our friends from bawsca are eager to applaud and things like this, so i want to thank the puc for playing this leadership role. i think this is an example of how we can do a lot more to conserve and reuse water. i think it is fantastic we are looking at projected demand decrease by 2035 to 71 mgd in

san francisco. it gives me hope that we can stay within our water budget. again, real-life concerns about the proposed water transfer -- i think this is an example of how we can avoid that. i do have concerns that when we're talking about the transfer of the last meeting, it sounded like ideas such as conservation and things like the non-portable project -- non-potable project were going to be out of reach of the puc in august, which is great, but it means the decision could take place in july before we have discussed alternatives. somebody was telling me in the last report was that the true cost was almost $2,500 an acre foot, whereas conservation was about $1,100 an acre foot. i think that there will be a lot of projects that come in under

the 2500 that have not been explored yet, maybe because they were seen as too expensive, but now we have a real price tag for the water transfer and we could look to a lot more innovation. i just have a concern about the timing, that that discussion should take place before a vote on the water transfer. again, thank you very much for your leadership on the project. >> the timing issue is that the july 10 meeting will be the workshop, and the two items we will be discussing our more supply options and the sewer system improvement program, so actually, we are not meeting in august. we're meeting july 10 to discuss the things he brought up. commissioner moran: i should also said that the questions you had raised at the last meeting were also raised by bawsca in a recent letter to us. i have asked staff to come up with a concise answer to the

questions raised, and hopefully, we will have that in the near future. >> we will be working on the. commissioner moran: but that is not the item before us. we do have additional public comment. welcome. >> good afternoon. i am the senior epidemiologist at the san francisco department of public health, and i wanted to take an opportunity to let you all know that i have been formally working for quite some time on this project, and i have felt really privilege to be working with staff to allow this type of a project to move forward that will make it possible for development to move forward to safely utilize on- site water systems. the project is a remarkable example of how well our agencies can cooperate to develop a program that needs so many diverse needs.

next week, we will be asking our health commission to consider a resolution in support of the health department's participation in the development of this program, and a look forward to continuing to collaborate with our city program as we move forward to improve and protect the environment, our water resources, and, of course, public health. commissioner moran: we have a motion. and a second. all those in favor? suppose? the motion carries. item 14. >> item 14, approve the terms and conditions and authorize the general manager to execute an option agreement to sell 6.4 acres of real estate to kmj urban communities for $8.1 million. >> we are bringing this back to you for your direction under the terms and conditions that you

directed us. it is very straightforward item at this time. commissioner moran: thank you. commissioners? moved and seconded. is there any public comment? all those in favor? opposed? thank you. motion carries. madam secretary, if you would call the closed session items -- we will ask for public comment -- >> before you close, i want to clarify about when the building will be open for the public for the viewing audience. it will not be open on the weekend. i will be open on june 21 and 22 from 9:00 to 5:00 p.m. commissioner moran: thank you for that clarification >> greater than item 17, closed session, conference with real property negotiator pursuant to government code section 5495 6.8

administrative code section 67.8. under negotiation -- acquisition price and terms of payment. commissioner moran: thank you. is there any public comment on the closed session item? ok, seeing none, can i have a motion on to whether to assert attorney/client privilege? motion to assert. second. any discussion? all those in favor? opposed? we will now go into closed session.