the permit is upheld without modification. president peterson: no further business. with that, we are adjourned.

supervisor avalos: good morning. welcome to a budget and finance committee. my name is john ablow. we are joined -- avalos. we are joined by ross mirkarimi and sean elsbernd. mr. kirk, please go ahead with the announcements. >> [clerk announcements] supervisor avalos: item #one please. -- 1 please.

>> item 1. resolution fixing prevailing wage rates for: (1) workers performing work under city contracts for public work and improvement; (2) workers performing work under city contracts for janitorial services; (3) workers performing work in public off-street parking lots, garages, or storage facilities for automobiles on property owned or leased by the city; (4) workers engaged in theatrical or technical services for shows on property owned by the city; (5) workers performing moving services under city contracts at facilities owned or leased by the city; and (6) workers engaged in the hauling of solid waste generated by the city in the course of city operations, pursuant to a contract with the city. supervisor avalos: thank you. representative from the department? >> good morning, supervisors. this is the annual setting of the prevailing wages for the crafts of labour that will be

done -- performed for the city. this is in accordance of charter section 80.7, and various administrative sections -- code sections. supervisor avalos: thank you. i recognize there are a number of contracts that were referred to which included prevailing wages. my main question is, the wages become different as those contracts changed here every year -- year after year. that is what we provide the prevailing wage as? >> we provide them as mou's, the kind of labor, as well as the labor determinations as given by the department of industrial regulations. supervisor avalos: thank you. mr. rose, if you could share your report. >> the prevailing wage rates are

set forward in our report. our recommendation is a policy matter for the board of supervisors. supervisor avalos: thank you for your presentation. we can go on to public comment. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. okay, without objection. to the full board with recommendations. mr. young, please call item no. 2. >> item 2. resolution approving the issuance of water revenue bonds and water revenue refunding bonds in an aggregate principal amount not to exceed $600,000,000 to be issued by the public utilities commission of the city and county of san francisco; affirming covenants contained in the indenture pursuant to which the water revenue bonds are issued; authorizing the taking of appropriate actions in connection therewith; and related matters. supervisor avalos: thank you.

we have various representatives from the puc. >> tottery strong, general manager, cfo. we are here as part of our quarterly bond sale. since we last visited you, we sold bonds in may for the sewer system, in may -- june for the water supply system, again in july for the water supply system. every time we come before you for the file and record as well as reviewed by the public utilities commission, is about 700 pages of bonding and funding documents. this is your high-level review in the brief, in addition to the documents that are on file with the clerk and commission. we have issued $2.2 billion worth of bonds over the past couple of years, specifically for the water improvement system plan. that, along with sorbonne sales, and sales for the new

headquarters building, we have sales of $400 million of estimated debt service costs for ratepayers for the next 30 years. we have done that because we have been fortunate beneficiaries of what has been record low borrowing rates in the u.s. economy for tax-exempt and build america bond financing. we come to you today because the american recovery and reinvestment act is scheduled to sunset the bill the american bonds. dependent upon how congress acts or does or does not renew the program, a window could potentially close for municipal issuers on december 31. we would like to be able to capture one more quarter's worth of savings in order to do that. for today, it is a similar size to our other quarterly sales, up

boards of $600 million for the water system improvement program. we have gone to the sfpuc commission and got approval last week. we come before you this week. the next week there is a resolution. we are continuing our plan of content -- competitive bond sales. bidders are allowed to bid on our bonds. if we sell a combination of tax- exempt and taxable bonds. they have to buy everything or nothing, so they have to put in their best and lowest bid from the outset. we do not do that on the electronic markets, so you can watch it in real-time bidding. the closing is slated for the middle of december. the hybrid structure includes tax exempt and build america bonds. we looked at the price of those together to make sure the combination of those two bonds are the lowest cost to ratepayers to lock in the

cheapest cost and cheapest financing we can. funding for the water improve the system program, they are long-term assets that are part of the program. we are looking at 40-year debt. to give you a flavor, we have been selling bonds recently, july and june, getting 3.7% total interest cost. that is 3.7% effectively over 30-year financing. this gives you a frame of reference for every percentage we are lower than the 5% model, which is a prudent planning model for a double a highly rated utility, such as the public utility commission, here in san francisco. for every% under 5, that is $23 million in savings for every $100 million for road. that savings occurs over 30 years. as much as we can sell now at the lowest rate, the better for

ratepayers. the financing overview also included in your report and summarized in the budget analyst report, financing authority is an under proposition e. this is consistent with your earlier ordinance reviewed in the past. the comptroller continues to keep any budgetary appropriations on controllers reserves until funding is actually in the treasury to spend. we will be capturing what we think might be the last bill the american bond that ms. paley's -- ms. allen is can claim through congress. -- municipalities can claim through congress. the documents were pretty lengthy, but in summary, about $0.83 of each dollar goes to

construction costs and work. again, we fund capital interests for three years on average. we are also required to fund in- cash debt reserves, and that is the case since 2008. our credit now is basically equal to or higher than most assuredly companies and bond insurers. when we offer bond buyers the potential to have the option to purchase insurance, they had not done that because of sfpuc's high credit rating. the forms of agreement are the usual ones. there are 10 of them primarily. the commission resolution, preliminary official statement. we would then make updates on that based on our financial statement. the 10th, 11th, and potentially 12th indenture, every time we

have to issue bonds. the official notice of sale, intent to sail, bond purchase agreements in the event that the markets turned south and then we have to renegotiate a sale. we do not anticipate that. company agreements. escrow agreements. that is the key highlights. with that, i am happy to answer any questions. i would like to thank the budget analyst for their report. >supervisor avalos: great. thank you. it is great to hear the work of the puc, especially on maintaining and achieving a high credit rating. it goes very far with so many projects, but with the others coming up as well. mr. rose, if you could share with us your report. >> mr. chairman, members of the committee, i would point out on

page five of the report the estimated debt service for this issuance is $1.3 billion, that includes the $600 million of subject principal and $720,000 -- $720 million of interest, average annual debt service over a 40-year period, $42.2 million. we recommend you approve this resolution. supervisor avalos: thank you. supervisor mirkarimi? supervisor mirkarimi: just to echo, a good job. supervisor avalos: let's go on to public comment. seeing none, public comment is closed. >> i believe there is an amendment that needs to be posed? supervisor avalos: on our desk we have an amendment on the

whole. >> on page 3 row 10, there was a clarification to make a number, the digit 6 instead of five. only wrote 10, page 3, change that digit to make it consistent. i think that is the only edit. i do see one additional edit provided by the city attorney's office. it is again to provide consistency with our other financing documents. on page 6, provided on rows 6

through 8, proposition p requirements to cover said cost with oversight committees, nothing shall preclude the commission from paying the fees associated with oversight costs of the revenue bonds committee from any legally available funds other than the commission. this is consistent policy. we would plan to and would always plan to fully fund what is the least cost funding source for the oversight. but i should mention as well, every time we meet with the rating agencies as well as potential bond investors, they are very thrilled that the san francisco government has an independent comptroller's office that does their audits, and oversight committee that does their audits, the additional scrutiny of the budget analyst. they consider that a credit strength as well for the public utility as we sell bonds.

thank you. supervisor avalos: ok. supervisor mirkarimi: continue the motion as amended. supervisor avalos: as amended. a very good. >> this will be recommended to the full board next week. that completes our agenda. supervisor avalos: we are adjourned.