we sure did. we had another very successful sale, also led by deputy cfo charles bird in the front row. we had another very successful sale in december. what this means with those $530 million we sold in december -- we have sold $2.70 billion of the $4.60 billion water system improvement bonds. the bidding environment looks very helpful to the san francisco public utility commission and the water department in particular. if i could just have the camera zoomed in on this a little bit, we achieve savings of what equals about $62 million compared to what our financial plan had assumed. we are doing financial plan projections assuming we are able to borrow money at 5%, and instead we were able to borrow money at 4.8% and 4.5%.

in addition, we have gone out and borrowed 40-year debt with a fixed rate. the good news for our ratepayers' is we have locked in those rates and they will be able to benefit from low rates for the next 40 years on this debt. it was a competitive sale. we closed right before the holiday -- the christmas holiday season, closing december 22. the tax exempt structures went out 20 years. that was about $10 million of savings. we were very eager to go to market because we wanted to capture one more sale benefiting from the american recovery and reinvestment act build america bonds. that program allowed the federal government to pay 35% of the interest cost for the rate payers and provide a subsidy. that meant that our rate payers

locked in on that build america bond portion -- that was equivalent to $52 million of savings over the next 40 years. we successfully had a program run by mr. perle and his staff. the bidders love our bonds because they not only secret information like we have shared with you before, they see our quarterly budget statements. they also see our website that mr. harrington walked through. those materials show the up to date -- up-to-date water and power generation. investors like to see that level of transparency, including these two bids. but the tax exemptions, you have five bidders. citigroup was the winning bid. whenever selling bonds competitively, the bidder has to buy everything or nothing. it goes to the lower bidder and

the best deal for the rate payer. jpmorgan we also visited with earlier this morning. they have been very aggressive in bidding. they bought over $1 billion of our bonds over the next -- over the last 18 months. this was the most savings for the repairs, coming in at 4.5% annual true interest rate. the calendar for the water bond -- i mentioned we have sold $2.70 billion to date. what this means just on wsip, the water system improvement project -- we have locked in place six great costs that are paying -- that are saving the ratepayer $3.60 million. if we add on to that the refunding we have done on water, waste water, and the waste water bonds were sold last summer, we have locked in place a total of

$450 million of savings lower than what we had projected. here is our right modeling long term. that is really helping us cover a lot of the shortfall in revenues where we had at lower water sales and lower sewer treatment. you look at that thursday in the budget. we have $1.90 billion more to sell from wsip. we will next need money in the summer, about $600 million in june or july. because the build america bonds program has expired and the president and congress are not looking to renew it, that means we will go back to the tax- exempt market. that is a much smaller pool of investors who buy those bonds. we are looking at every opportunity we can to get our name out there, tell our story, the great savings we report to you on our contracting out.

we regularly share that with potential investors who see quarterly reports. they do look at our point -- our 245-page document, our annual report. that is one of our key target markets. this is another success story. we look forward to a answering any questions you might have. >> congratulations, mr. rydstrom, once again. commissioners, any questions? bravo. >> and thanks to charles, too. >> thank you, charles. we really appreciate it. any public comment on the general managers' report? hearing none, at next item please. >> the next item would be the "supply and conservation agency general manager report. i believe mr. james is here. >> good evening, members of the

commission. i am c.e.o. and general manager of the agency that represents 26 of your wholesale customers outside of san francisco. i would like to meet with you and check with you. president -- commissioner torres, i have not forgotten my promise to meet with you. i hope the rest of you stay put so we can schedule meetings. i will keep my remarks brief. you had a discussion in december at your last meeting. you had a number of items on your calendar. i want to make comments about some of those. you had a presentation by mr. rydstrom on financial issues and rate setting. part of that had to do with water savings and how that affects rates. part of it has to do with how to explain rate increases to customers. i wanted to offer my suggestions because we are some of your customers, and the explanations from you would be useful as well. first of all, on the matter of conservation, excellent graphics

here today show you what is happening with water use. i believe all those represented county feeders, for example the consumption by san francisco. that was how much water flowed across county lines into san francisco. i am a date to junky like commissioner -- a data junky like commmissioner moran. i would love to see more data. but there's a lot lost in that. the data are complex and confusing as well. we have one agency in palo alto that is a multiple-utility agency. they have waste water, garbage, gas, fiber-optic. they cover all the utilities in palo alto. there were trying to make use of their data across different utilities to see if they could sort out the water conservation from the weather and the economic downturn. they had a lot of data.

they are data junkies t 00. they could not make a lot of sense of it yet. the signals are not clear. most of us would like to take credit for the downturn in water usage being conservation. it is not so. palo alto had some good slides at the conference yesterday that showed the water conservation they can identify, but it does not explain the drop in water use. my concern is that most of that is economic downturn. hopefully, there will be lessons learned during that downturn and some of the savings will remain in place, but that is not certain. for water managers, it creates quite a dilemma. you do not know if you can count on the savings. that is problematic. the other problems it creates has to do with rates. we have rates based upon the amount sold. we have just begun some discussions with your manager about how to mitigate that. it is a problem for you.

it is a problem for us. the problem for you is that he does not know who -- know how much revenue he is going to generate. we pay two-thirds of it. you do not know what your income is. most of us are salaried employees. you are on the commission. you know what you're going to make each year as an individual. you do not know as a utility. we have the same problem. we do not know how much we are going to make as individual utilities, and we do not know what our cost to san francisco is going to be. as todd displayed last time, when you under collect revenues one year, you have to add it to the bill for next year and end up chasing your tail. i think there are ways to get around that to provide a steady flow of revenue to you, to provide predictable costs to our agencies, and to still have water use reflect what purchases so there is an incentive to

conserve so that people can do cost effectiveness analyses. we will pursue that with your staff. i hope something good will come out of it. i do not know that this is done anywhere else. this would be another groundbreaking event for san francisco. finally, on the matter of what customers that for the value, you had some discussion of the last time. as i recall, it's sort of focused on getting reliability out of wsip. it does not do a lot for water supply. it is mostly reliability so we do not have 60 days without water. that is a good point. but there are other beneficiaries of the work that you do and we do. if you look at not just the value added but the true benefits, everybody benefits from greater reliability of the system by that i mean --

reliability of the system. by that i mean residents, people with jobs. everybody benefits, current and future. you look at water conservation. who benefits from that? a lot of our communities are investing in water conservation so they can accommodate future growth. it is not the existing customers necessarily who benefit. it is future customers. some agencies are now building that interconnection fees so that future customers payback existing customers for water conservation. it is a smart thing to do. there is another beneficiary that was not mentioned. that is a tremendous amount of cost that goes to this beneficiary. they do not vote. it is the environment. i think when we talk to our public, we should talk articulately about the residents benefit, people with jobs benefit, existing customers benefit, and future customers benefit, and the environment is

benefiting. a lot of my work has been toward that. we have to tell the public that is part of what they are investing in. if you can produce that material for the work you were doing on our behalf, we would be glad to use that and provide it to our 26 agencies so they can provide it to their customers as well. >> thank you, mr. jensen. that was very helpful. commissioners, any comments on mr. jensen's report? hearing none, next item, please. >> the next item is the consent calendar. all matters listed under consent calendar are considered routine by the san francisco public utilities commission and will be acted on by a single vote. approval an amendment to the power enterprise project fund agreement on a renewable and advance energy services with

aepc group, increasing the amendment with a time extension of one year to continue to support renewable and advanced energy generation technologies and related project. b, approved terms and conditions and authorize the general manager to execute a new five-year lease for existing telecommunications with t mobile west corporation for $48,600 annually for installation of mobile/wireless antennas and radio equipment. c, approve the terms and conditions and authorize the general manager to execute a new five-year lease for an existing telecommunications site with t mobile for wireless and mobile antennas related to radio

communications signals. d, approve the terms and conditions and authorize the general manager to execute a new five-year lease at the crystal springs cottage site for the installation of radio equipment used for the transmission and reception of radio communication signals on watershed land. e, approve the plans to install a 60-inch steel water main on 28th avenue. f, approve the plans and specifications to award the contract for north shore and

mariposa pump station to the lowest responsibility -- responsive bitter -- bidder. does any commissioner wish to separate any item from this? president vietor: any items to remove from the consent calendar? is there any comment from the consent calendar? all those in favor? opposed? the motion carries. next item. >> the next item begins the regular calendar. i contend, discussion and possible action to approve a community benefits policy that will provide the framework to develop an agency-wide comprehensive community benefits program. >> hello, commissioners. juliet ellis.

i think this is my first presentation for you on this site. i am the general manager for external affairs. i want to welcome commissioner martin. i am glad you're here. i contend should be familiar to most of you. -- item 10 should be familiar to most of you. this came before you at your commission meeting on november 23 in draft form. as background for commissioner courtney, in late 2009, the commission directed the staff at the public utilities commission to develop a community benefits program, a comprehensive program and policy. shortly after that meeting in 2009, two consultants who had been working with us for the past year began assessing where the public utilities commission is with respect to community benefits programs, helping us develop a definition we used in

the development of the policy before you today. at the meeting on november 23, we also provided the wall with an executive summary of the draft report -- provided you all with an executive summary of the draft report we had been working on around community benefits. that report will be finalized and released in february. since the meeting in november, we incorporated a lot of the comments that we received at that meeting, and specific comments around incorporating language in the policy with regards to implementation of the environmental justice policy. that has been included. there are a couple of other comments that were presented at that meeting that have been incorporated. our next step upon approval of the policy will be to take that and hit the ground running in developing a comprehensive community benefits program and staffing up with that.

that will be used as we think about how to put some meat on the bones around the policy with regard to implementation. in the last couple of days, there have been questions raised with regards to the policy. it has been noticed and people have seen it again. one question we wanted to respond to was a question around how we will operationalize the triple bottom-line approach referred to in the policy. this also speaks really well to the comments that were provided about how we think about measuring and communicating what the impact is and the taurus is we are making between economic benefit -- and the choices we are making between economic benefit and community benefit and environmental benefit. the question is how you create a framework so commissioners can make choices. it will be around making choices with regard to how we way

economic benefit, environmental benefit, and equity benefit. how do we find the sweet spot in the middle where we are getting all three of those goals? internally, we are talking about implementation. that is where we are. the question about how to operationalize the triple bottom-line approach -- it is important. it is front and center. as we develop the program, we are monitoring, evaluating, and prioritizing to create tools and tables to be able to list the concepts set forth in the policy. the other area that has been discussed and highlighted as critical is, for example, the implementation of the environmental justice program approved in 2009. the community benefits program would give us a vehicle to be able to think about implementation. many organizations talk about environmental justice. the question within the puc

staff is what that actually means for day-to-day work. for the commission, the question that comes back to me is when are you going to start implementing it. what does it mean for the decisions we make, the programs we do, and the activities we support? those would be quick responses to one question and has been around how we think about implementation. the other question that came in this week was the role that community-based organizations are going to have as we think about community benefits. in the resolutions, we refer to stakeholders and stakeholder engagement. we do not specifically call out community-based organizations. that has caused some concern with community-based partners. in response to that, i just want to take the opportunity to say as we think about stakeholders' we include community-based organizations as stakeholders. we did not specifically call

out community-based organizations because we also understand there are individuals, residents, and ratepayers attached to organizations, whether they are community organizations or nonprofits. we are talking about the broad family of stakeholders who have skin in the game and are going to be impacted. we want to find all the different ways we can reach out to those constituents. folks who are watching in the audience today -- that includes community-based organizations. whether they are churches or local partners on the ground, we are going to incorporate their feedback in this resolution and identify ways of beginning to work with them immediately. with that, i will stop. you have seen this many times before. i will respond to questions if you have them. president vietor: i have one question on this implementation. will we be hearing in our budget proceedings about what is going

to cost, and the staffing needs to implement it? >> yes. i think the external affairs apartment -- external affairs department is up on the 27. we have been having intensive conversations with the general manager as well as assistant general managers. the great thing about the community benefits program is that it is comprehensive and hits different enterprises. the idea is, for example, as assistant general manager hale is thinking about issues around power and funds coming into the agency that will need to support disadvantaged communities, she will be working with external affairs and the community benefits team to have thus provide leadership about how to do that programming. as we think about the sewer system improvement program, there will be a community benefits approach and strategy. it is not just about new

benefits. it is about how to engage the public as we think about what the impact is going to be, and how we think about our citizens advisory committee. we will be coming forward to you with some budget implications, but we have also been trying to think creatively about how to fund the work, knowing that revenues are down within the agency. the truth is we are starting at ground zero at this point. who is going to write the policy? we do not have anyone staffed up because the new program has not yet been approved. we're hoping to staff up in a way that is smart and takes into account what the revenue issues are, but also is realistic with regards to what has to take place in those limitations. vice president moran: thank you for that. it is incredibly timely. i was noticing at our december meeting that we had two or three items that talked about the triple bottom line.

[laughter] and it made me start thinking about what we really mean by that. what we mean by it gets defined as we figure out how to describe it and quantify it and act on it. the closest parallel i think we have had experience with is in need -- in the mtd area. we said in contracting we wanted the lowest priced bid, but on the other hand we encourage small local hiring. over a considerable time, we developed a way of thinking about that. we said this is work -- is worth up to a certain percentage of the price, but not for huge contracts, and only can qualify after review criteria.

and that is not directly applicable here. this issue is much more complicated than just bid preferences. but there are two things i think might be applicable. one is that in the evolution of that process a lot of thinking and discussion and decision making was made. it was not just how to presented. it was, credit we should give and to what kind of firms. -- it was a question of how much credit we should give and to what kind of firms. i am thinking that someone has yet to go through and figure out what the triple bottom line is. the other thing that came out of this is easy to understand. in that sense, it is very transparent. you can explain it to people. you can argue about it. but you get the point very quickly. as we get into a triple bottom line, there may be a tendency to

get very complicated trying to internalize the economic costs. it is a very hard thing to do, and even harder to explain. i would encourage two things. one is that we try to go toward a straightforward and easy to understand methodology, and that we use the development process as a way of encouraging discussion at the commission level as to what we really mean by that and how we will think about the applications. president vietor: thank you, commissioner moran. any other questions or comments? this is a potential action item. is there a motion to adopt at this time the community benefits policy? >> i will move. >> second. president vietor: any comments

or questions on this? it would be great to take public comment at this time if there is any public comment on the community benefits policy. >> commissioners, i wanted to speak in favor of the policy. as most of the commission knows and is aware, over the past year this has been the product of an incredible amount of work. there have been stakeholder meetings with environmental groups, community groups, and job applicants. a lot of us. it has been very capable. with former commissioner ellis and your general manager consultants, there has been a lot of discussion about this. it is a robust policy. it gets us to a lot of the goals that are seeking to be advanced in terms of leveraging all the opportunities for community

empowerment that are available. when you spend the type of resources the puc is spending to improve things like our waste water system rebuild, $3 billion to $4 billion, it is massive. i think there is a lot of reassurance. we have a general manager that believes in this. i was one of many people who was delighted to see general manager harrington stand up in support of general hiring at the board of supervisors. that was really important. i cannot reiterate too much how important it was to have that. we have someone who believes in this at the helm of this agency, a commission that believes in, from our point of view, the importance of leveraging community-based job opportunities that are good paying, high-quality jobs with benefits -- it is important.

again, i want to speak in favor. i think there are a lot of things we can do with this. we talked about once there is a local hiring policy in place, let's move forward with agreement for the waste water system. there are a lot of good things to accomplish to that. with mandatory local hiring, that a switch is the concern of a year ago, when -- that us wages -- that assuages the concern of a year ago, when there was a question of whether to move forward. there is a lot we can do. this is a great commission. it will be great to implement this. i look forward to working with the commission. president vietor: thank you for your comments. is there any other public comment on this item? hearing none, all those in favor? opposed? congratulations. we are very excited about this policy and look forward to working with you.