very conscious of the environmental issues. but we are stranded by the previous history before we were able to take destiny into our own hands. we're one of the later customers and we feel that we are disadvantaged. i hope that you will take into consideration these concerns. thank you very much. >> good afternoon. i am the director of water resources, and you see this as part of your package. we complement the outreach efforts by the staff to present this draft and respond with comments. we recognize that this is the choice that will be made but there has a distinction between individuals with the guarantee

and the supply allocation. this is based upon the initial draft that is distributed. and the methodology was based upon these agencies, with the numbers developed by each agency. this bus -- this best serves to remain under the annual number of 265 million gallons per day until 2018. and this will not create any unreasonable burden upon the agency, and those agencies that did not possess this guarantee. use all that we were one in six, and this has one of the lowest water usage is in the region, and i believe that all agencies -- we have a strong

water conservation program for the local plumbing codes, and we recognize our responsibilities for the city of san francisco. we would like to give the water supply to harding park and in the westside basin for drought reliability. these programs are designed to reduce risk. and this should remain the primary focus of the san francisco methodology to achieve this number. thank you. >> thank you for your comments. the next speaker? >> president and members of the commission, i am the manager of south bay water recycling. the regional water recycling program.

i would like to discuss the impact of the interim supply allocations that this would have on the water supply. and would like to thank you for your diligence, in meeting with the wholesalers of water to explain your methodology. i also have a copy that is entered into the record. we have serious concerns about the approach that reduces the allocation to san jose by 20%. compared to the current usage as allows other wholesale agencies with 10% increase over the usage in 2018. this is contrary to the agreement and the goal of the overall system usage. this is especially troublesome, for the bay area leaders in water conservation. not only have we worked in

these goals and retell programs, we also have refunded $20 million in local infrastructure. nearly 10% of the water used in san jose is served by them. and this has been decreasing over the last decade, and the usage of last year was the lowest in 10 years. we are good stewards of this resource. if the commission decides to continue this approach that allows some agencies more than what is required, we believe that this should be phased in over time to make certain that these projections are correct. this could prevent an overestimation. in short, we're asking for special treatment, but we would like our customers not to be unduly saddled with excess of charges.

-- excessive charges. >> i am the director of water in santa clara, and we have been a longstanding customer since 1974. we have a non current agreement. we have a very aggressive conservation program. the other wholesaler noted that the city of santa clara was the best in conserving of all the agencies and the county. as the owner of the control plant, we have aggressively invested in recycled water. this accounts for 25% of all the water used in this area. we are looking at a potential

draft that will burden the city above and beyond all of the aggressive conservation and the recycle water that we have been performing. we feel that the intention of the agreement, we were looking at if there is a reduction, on average this will affect all the permanent customers. just not the customers that refuse to comply. if you would like to incorporate this into the equation, instead of that and 10% to some customers, the 6% allocation to those customers, their own projections for 2018 still allow the city of santa clara to meet the requirements and the commitment for san francisco. i appreciate the work of your staff, and the transparency and

the openness in providing information to the retailers. >> the next speaker? >> i am the that the director for the city of hayward. i would like to thank your work on this issue and the transparent manner in which you have communicated. you have reviewed a couple of different options for allocating the water and in our opinion, the first option has the only projection for 2018, this is reasonable and equitable and sustainable for all the agencies. the second is, much less the sensible and almost certainly is

going to cause financial hardship. this is if and when the total derivatives have exceeded this number. although we respect the legal standing, we find, in the water supply, there is no legal position to compare these in terms of the allocation. this also keeps hayward's usage at the 2018 level and denies us what has been given to other agencies. if the commission chooses to proceed with the second option, something must be done to make this all tentative. let me address the matter of content. in the second option we have been assigned an isa to the 2018

demand. we cannot express the precedent that this is setting. this completely ignores and is contrary to the contract. the water supply agreement approved by all parties clearly recognizes that the supply contract is unique. this does not include the limitation and there is no expiration date. they will supply the total service area and the contract is superior to any other.

can the second option to be improved upon, except for the other shortcomings? we believe that there are changes that can be made that will address these concerns. may i finish? the 10% additional allocation that is used by the staff is a completely arbitrary figure. and a lower percentage can be used to offset the shortfall. we are requesting, if you wanted to the second option, to provide these agencies with the projected purchases, with an allocation that is either equal to the isg or 5% greater than the purchases.

this may fall short of the projected demand, in the allocation equal to the projected amount, or + 20%. i have a copy of the results of this analysis that show how the allocation is going to look if you pursue this. i would be more than happy to share this with you. and i just want to thank you for the opportunity to comment. >> thank you. >> the next speaker? >> that afternoon, commissioner. -- good afternoon, commissioner. i would like to thank you and for your great leadership, last year.

i think that the staff has done a great job with a very challenging issue. there is a lot of historic promises, and there is a lot of difference in the demand for water use. there will be winners and losers. and some agencies appreciate the first draft, and others appreciate draft #2. but the losers should not be the agency that has the lowest per capita water usage. the lowest water use in all the territory. i think that they are around 45 gallons per person every day, against one year ago when this was about 50 gallons. they should be rewarded for that. and maybe work something into the formula. the local water use is 50 gallons -- and they should be guaranteed with the projections

are for 2018. and you divide the rest among the other agencies. on the other hand, there are those that stand to lose under the second draft. they have 300 gallons per day and they have money to purchase this. they are going to purchase some water, and they would use the water to expand the water program. this is in east paulo alto. this is a little bit challenging. and some communities are in a better position. something i would really encourage for you to look at , is to consider the pricing for the wholesale customer. you may have four tiers. the cheapest would be for people with 60 gallons, and over 100

gallons -- this is what is going to encourage recycling and conservation to marry -- the cycling and commerce -- recycling and conservation. that will get the communities together. >> the next speaker? >> good afternoon. i am the utilities director for paul although -- paulo alto. i like to commend the staff effort, working on this -- the process has been cordial and opened and i appreciate this. -- cordial and open and i appreciate this. we have not agreed with the unilateral position for this allocation and we continue to seek legal remedies if appropriate. we provided a couple of letters

in response to these proposals. in summary, we believe that the water supply agreement and the individual guarantee provides critical certainties for this agency. this has created an environment where we can work together for conservation of recycled water and new supply developments. the change this principle now would place a cornerstone the has been in place for 25 years, weakening the long-running relationship between the agencies. you have a responsibility to many constituents. most of whom did not have any formal representation in san francisco. we consider this agency to be in partnership. and we are troubled by any

action that puts the sppuc for dictating policy outside their borders. the memo states that the individual accounts to not account for individual water use, land-use planning, and water decisions by an individual customer. we respectfully disagree with that statement. the isg has influenced everything that has happened with land use in paulo alto since 1984. the perpetual rights of each of these agencies -- especially based on subjective issues. this is an interpretation of what constitutes good water yes. however, we recognize the nature

of this and it will cease to exist after 2018. we empathize with the commission of the commission -- the position of the commission. there are several issues that cannot be ignored. in the second draft isa proposal, this is below our isg. the surplus, the difference between the isg and isa is re- allocated and we are supporting a reassessment for agencies with contract rights to recieve recognition of those rights. >> can you read the last part -- about if you support the reaoolocation of -- reallocation of the isg? >> paulo alto supports

reassessing how they allocate the surplus, the difference between the isg and isa so agencies with contract rights recieve their rights. aulpaulo alto may be one of the. >> the next speaker? >> any others? >> we had two other cards. mr. gordon and mrs. -- >> thank you for having us. i am naomi, a sophmore at stanford. >> i am a junior. >> we like to read the statement. we are for the students were

susceptible stanford, to keep stanford never city and the surrounding areas clean. we're trying to keep a harmonious relationship between the local communities. we have been approached by several members of these communities to find better water demand allocations. as residents and concern members of the community, we believe it is our responsibility to advocate for the just usage of water in this area. we have the first draft interest -- entrance because this all greeks the environmental goals of -- meets the environmental goals. specifically with paulo alto, this meets the needs of the city and we cannot support the second draft. there is an unfair burden on

east paulo alto residents. and reduces conservation by allocating them in excess. we ask you to reverse the trend of environmental injustice, to allocate a more justified use of water in the bay area. >> thank you. >> i am the interim city manager for east palo alto. i want to thank those of you who have read this, and those of you who are supporting east palo alto.

after -- being the last speaker, everyone has basically said what could possibly say, so i will be brief. it seems that we actually have a plan before us that actually does not treat everybody equitably. and i would ask for the commission to consider flexibility among all the jurisdictions. and i would also like to say that there is nothing in the report that i have seen that encourages or rewards those who are conserving. it seems that there are penalties that somehow this is how we reward people. adversely. i definitely would like for them to consider how you reward people for doing what we all need to do.

with that, i will close my comments. i definitely urge you to consider, because certainly we are opposed to the second option. >> thank you very much. and the next speaker? >> i have a couple of brief comments, and one of them is to emphasize something about the first comments. this is according to the correspondence -- we're not conceding the legality of this, or opposing the collection of the enhancements surcharges. the second is a minor point, but major in principle. the sets forth the allocation to san francisco for the retail

customers. and to the wholesale customers. wholesale customers in the water supply agreement, in this very provision, this is capitalized as a defined term, and includes not only -- those who are included. this does not include the smallest will sell customers. they are not part of that agreement and they do not belong there. we hope that this is removed. thank you. >> and other any other public comments? >> i have a question. i did not mean to put you on the spot that this is uncomfortable. in the presentation that we have, we have the water supply agreement, and it says this is the responsibility of the tolls of customer to limit the water

for the supply guarantee. the believe that this limits the ability to give someone the allocation in excess of the supply guarantee? for example, we have the projections that surpass the supply guarantee. is it acceptable to the allocation that is beyond this? >> i like to consider this and give you a thoughtful reply. the provisions are not related in the contract. >> we have no other speaker cards. >> commissioners, obviously. this is not an item that you have to decide today, but as the last of the slides says, it would be useful to have some preliminary thoughts from you for the day, or individually,

about how you would like for us to proceed. there are questions, for example. if someone goes over by 1 gallon, is this the same kind of provision if this goes over by 2 billion gallons. did you want for this to be significant and important, because the whole point is to make certain that we never have to impose this. what is significant and what is important. this is something that we're willing to say, this is 300% of what would have been charged, what is the $7 million because this is the cost of litigation. or another million dollars. what signals are we trying to send out right here.

and the discussion that some people raise, how much do we impose -- impose the thoughts about how people should spend region should use the water or should we be more agnostic? what are some of these issues? >> where will i start? first, let me repeat this to the staff with the information to work with. i want to thank everybody for submitting their comments, orally and in writing. this has been extraordinarily helpful as we go through this process and i appreciate you taking time to do this. the couple of things, by way of starting out. -- by way of starting out -- my

eye -- my way of starting out. we should not be counted on to do anything in particular but let me go beyond that. let me say that i think that the intention of the water supply agreement was that no surcharge should never be charged, and that if we are successful in making this conservation, and the reclamation, of limiting the water supply for the consumption, we would not have to deal with any surcharge. and that is the intention of the agreement. it would certainly be my hope that we are successful in doing this. the presentation on the budget situation and the support for the ability to ultimately get there.

the first allocation is interesting in a couple of ways. the first of these supports the notion that there is a significant likelihood that we would never have to impose this surcharge. and any allocation -- this may be -- this may have no effect, and we would be allocated of any financial obligations. the first of this table tennis -- that we would not be faced with a situation where we would be subject to this and i think

it is also important to recognize that we are not allocating water and that nowhere in the supply agreement were in the prior history or anywhere that i am aware of, would we get into the situation where because somebody went over some number that the supply was taken away. that is not part of this and we are not allocating water with some degree of probability and the not allocating costs. this leads to the question, what are we doing. one thing that we are doing is that we are not -- we are dealing with the al leiter of the circumstance with the sensitivity analysis, if this comes to bear.