president vietor: commissioners? >> i don't have any questions, but i would like to make a point, that is why we have a robust audit program. that is something we have chosen to do and we are doing it in a very transparent way. you hate to get results like that. but that is why we ask for the audit. thank you for all of that. also, this is an issue that they had identified to a lesser degree before. the things we have already put in place to start to address that. >> next is the source system improvement program update.

>> i am here today to give you a presentation on a plan that we would like to follow to implement these were system improvement program. when i came on in 2002, 2003, one of the duties that i was responsible for was to get this organization ready to deliver a large program like the wsip. we brought in staff and we obtained a lot of consultants. we were able to do a lot to prepare ourselves for the water system improvement program. what we would like to go over today is the agenda. first of all, we want to talk

about the similarities of the csip versus the wsip. some of the lessons that we would like to apply -- we also want to talk about some of the unique features c thesip -- that the csip offers that wsip did not. let's talk about the similarities between the programs. what we wanted to do is make sure that we have all of the systems in place, the structure in place. we want to utilize all the systems we have put into place. the other big thing, we wanted to make sure -- we got a program manager from the city.

we are responsible for the direction of the programs. we produced a matrix organization, and what is a matrix organization? it is a functional based organization that is based on functional responsibility like mechanical, and electrical, civil, and construction management. when the project is identified, the project manager goes to the functions to get resources to deliver the project. when the project is over, the resources go back to the bureau to be redeployed. that way, we have the flexibility to work on large projects and small projects. that is why we do capital planning to make sure that we have enough resources so that we

don't have to lay off during times when we don't have a lot of work. the other thing is that we wanted an organization where we could integrate consultants. we are able to accomplish that. a lot of consultants are for three types of purposes. one is for specialized work. the second is for workload that we are capable of doing but chose not to hire the staffing levels so that when work is reduced, we don't have to lay people off. we look at staffing levels to make sure that we hire appropriately. and we have more capacity for something that happens unplanned, we want to build capacity of the project because it takes a long time to hire resources through the city system. we wanted to make sure that we had that flexibility in our contract. one of the other important

things is that we have to be committed to our clients. in this case, it is waste water enterprises. if tommy is not happy, we are not happy. one of the lessons that we wanted to make sure that we apply, one of the things is that we used to get annual appropriation, and it is harder run capital projects when you run out at the end of the year. we want more of a long-term upfront appropriation for financing. we are suggesting 18 months or more. one of the other things that we are still working on is project labor group agreement, and also local hiring. the board right now, supervisor avalos is introducing a local ordinance. we are working to make sure that

we can really tell roll out and provide opportunities on projects. we wanted to clear up the conflict of interest. one of the things we have experienced, we have had three different program manager contracts which had three different teams which had a multiple different consultants doing certain things in the early stages. that led to a lot of conflict because in the early stages of the project, once we get a new contract or program management, these firms that assisted us are now complected from going to the next phase. one of the things that kirin will talk about is program management. we want to have a long-term program management where the firms will help us manage these

projects, and by being committed to help us manage the contract, they are conflicted out of doing any detail design or construction management services. they can help us, they can do third-party reviews. they can do check estimates and all of those things because they will never participate in the design because we have a long- term commitment with them. the other thing is that we want to improve our systems. we have invested a lot of money and time in our systems, and wanted to spend more time integrating. one of the things that we wanted to be able to do was integrated asset management. that is one of the things that we are looking at. we also found that we would like to have stronger quality

assurance, making sure that the procedures we have identified are being followed by everyone. it is not to say that those things weren't done, but we are starting this program from scratch with those kind of things. i will turn it over to karen. >> before you do, can you explain again how the conflict of interest, which we really had a lot of problems with as the project went on, how that is going to be different? >> it is always difficult when you break contracts down. if you have won contracts for one consultant to help us to do program management, you would not have any conflict. as it as you break it up and you

have a contract that will do design and another one that will do construction management, there is a conflict. one can't over see the contract. then you have a program in the multiple designs, multiple construction management because what you're trying to do, we broke the contract down so that everybody in the back of the room can participate. what we are trying to do is get the best out of each company to participate so that we can end up with a facility and a program. that is what we are trying to achieve. and we all sobriquet of the week and provide opportunities for local businesses and also some of the middle businesses that have graduated to provide opportunities for them as well.

>> she has a horrible slide, but it is a draft. if you do this, you cannot do things in red. it will give them an up-front load. -- look. >> good afternoon, commissioners. i'm the director of the waste water enterprise project. that includes the csip, the sewer system improvement project. we need to customize existing procedures. they have a very active asset

management system, so all of the improvements will have to integrate with that. any changes to operation or maintenance can be integrated into practices. we also include city staff training. these are some new things that we are bringing, so we are including that. system optimization is something that is also unique. particularly on the collection systems side, what is the appropriate side? how do we look at this during wet weather and dry weather? those are things that we talked about during the workshop process. the program manager will be able to help us with quite a bit. other unique needs that won't be unique in the future, this is

really sustainability at its height. we look at environmental performance, cost, integrating the public in the discussion about the different projects. i know it will be heard at the commission in december, and we will be incorporating the policies that are adopted here into the program. we have parks, we know how to fix things. the use of virtual design construction. we want to incorporate 3d and design so we can avoid conflict. and also a 4d component so that we can show the time component. how will it look in one year,

two years? these are the things we are discussing. also, the use of urban watershed framework. we have the west side watershed and the bayside watershed. there are eight different basins. what we are looking at doing is characterizing what happens inside of the basins and having a system to do it. it will help us make decisions about the wet weather operations. that looks better on the page. for them to be successful, we'll have to fully integrate the a infrastructure machine that includes construction management engineering contracts and environmental -- we will have some new folks that come in that will be focused on the waste water capital program. the communications director --

who also have right away issues that will be easements and things we will have to require for some of the projects to be effective. in orange, we have the waste water -- they will be helping us direct the program as well. we will have a liaison initiative. almost psychedelic on the screen now, something that is a bit different is that our engineering work and construction management work can be done by the sfpuc, the waste water process engineering group, or they may be using consultants. for the most part, we are

sticking with the wsip model that worked so well. -- model that works so well. one thing that we used very successfully is designed at risk. this is a pretty traditional way of delivering projects. our designer gets started, goes through planning. we determine what it is that we are looking to build. we're looking -- it connects to the environmental review process. some of the jobs will have a full environmental review. we hope several will have a clicker process. the design will continue during the environmental phase and be informed by the environmental work that is going on. at the end, you have a design that is integrated with the environmental. sometimes additional questions

and details are required to be able to provide that. those will be treatments, channel tunnel, the stations. if you look at it on a timescale, it means that engineers are doing alternative analysis, and we are determining what the best alternatives are. we are getting enough that we can start an environmental review process. there might be a year of planning in the year of work in order to get enough detail to start an environmental process. environmental feeds into the blue line at the bottom. we are designing in parallel with environmental, but we will see the line extends past environmental. it will be adopted here, and we would be able to finish the design packages and move to this

construction to get the implementation phase going. this is where a different way of doing things where we might wait a little bit longer, the designer might complete conceptual engineering and provide support. but probably stay between 35%- 50% where we have enough technical information to support the environmental review. when we are in the actual design, we want to have a lot of dialogue and a lot of issues or impact in the neighborhood. possibly the complexity of the permits. this is just a little bit different. planning is supporting the environment to reveal that the engineers are working on the planning side. the design would begin after the environmental review, but the

challenge with this is, if the project for some reason changes, we might have to revisit if the environmental review was complete. there might be some give and take their where we might have to amend the environmental review. i want to make sure that this is clear because we had a lot of discussion in the workshops about this. i think the design found it risky. there are also risks associated with doing a design after the environmental review. either way, the balance of having the public participate is going to be critical for us. president vietor: maybe we can take questions at the end because i have a question on that. >> i will go to the next one. we are also doing a lot of work with our team to develop the

schedules and budgets, anticipating what the cost will be. we are looking at the cost breakdown for the $4.6 billion program. the program is well underway, and the brunt of the money is in construction. the program management team is slightly over 2%. we did the same exercise with the upper source system improvement project and took a look at what money we are going to need for each category. how much is it going to be for environmental review? what will we need for construction? the difference is going to be that we will have an amount that is dedicated for community benefits. that was not the case specifically in the wsip program. >> the 6.7 $8 billion number is

a number -- >> it's for the full program if we implement all of the projects. all of the treatment plant improvements, the treatment plant at treasure island. it is the upper bound that we discussed on july 27. we eloquently got a presentation to give us an idea of what that would mean. this is for midrange, approximately $6 billion. we have to go through a lot of that. i just want to emphasize the reason for the importance. i know that there is still some way -- the types of functions

that the program manager would be supporting is the program of financial control, making sure that we have adequate change management. i meet with general managers, and the general manager has some comments that i want to a corporate -- incorporates. the program manager brings risk management for projects, risk- management for the program, and looking ahead at construction. how do we want to mitigate risk? quality, they talked about construction management, delivery mechanisms, what order of projects -- there are a lot of heavy things.

this will be a long-term relationship. the preliminary design -- we have to take a look at the level of service and make sure that we have the right thing for the right size. right now, we are laying out the projects with the best information for the schedule and the timing. this will be firmed up when we have the program manager on board. this is referring to the regional water control board. there are levels of treatment that we will have to meet. developing this new pla.

a much heavier emphasis on staff training and actual curriculum for projects that will be added to our base level for new stuff like flood control and will impact design. actual glasses that they can transfer and working on projects that are going to be worked on in the future. of reach, we definitely need to think about the project. we talked a lot about climate change and adaptation. but what we need have is a design that can help us. other areas within the city, how

do we handle how do we get this to be information that the engineers can apply in use in design to that we can begin to adapt the system? i am now going to go through briefly the upcoming professional services contract. seemingly, you will be seeing a lot of me because i will be coming to each of the contract as they come in front of you. the program management contract, it will be about $170 million for the program management and professional services contract. that rfp is in draft now. it will be going one more round,

sitting down in detail with the engineers and the unions, trying to get that to you in february so you can get that out. we did have one contract awarded. the technical detail will be put into place, so we are of little hoff -- off-sync. there is possibly up to 18 separate contracts that will be happening into the future. probably 2012 through 2033. on the design side, we got a channel tunnel out that what from mission creek -- went from mission creek. it is undersized. it is replacing the 1940's design to reduce odors.

those are highly critical projects. with the city work being $71,000,000.140000000 dollars. those would problem -- a $71 million, and 14$140 million. it would support analysis and design during construction so we would have a long-term contract to get these done and to build. the city was included in the numbers -- [unintelligible] i also have some cost engineering. we have process engineers through waste water, but we will

have to have some additional as needed resources ultimately be available through waste water. several -- that would be later in the summer. that would be going out through the project controls office. i'll -- will be having contracts let community benefits to have a wider reach. there is the slide that eds does not like.

-- ed does not like. we spoke so much about the digesters. we pulled that consultant in, and we pulled and maybe november 2011. is one of our most important projects. we would be experiencing a full- blown environmental review. that is approximately a three- year effort. we have one year of design work and from work to be able to start that. does that make sense?

president vietor: go ahead, karen. >> so, harlan mentioned the work that we are doing. it is effectively a conflict of interest to talk -- chart. the consulting team might have been selected for environmental review. i have a planning talks and that we don't have a -- [unintelligible] what it maps out, as you go from top to bottom, you know i love charts. you can see what the consultants will be eligible for. they have green, the program management contract. community education, community benefits, they would not be allowed to proposen