president vietor: i would like to call the meeting of the public utilities commission to order. first item? >> roll call. [roll call] the next item is approval of the minutes for december 14 in the regular meeting of january and 11. -- and the regular meeting of january 11. president vietor: is there a

motion? >> so moved. president vietor: comments? changes? holland favor? thank you very much. -- all in favor? thank you very much. >> we have no speaker cards for this item. president vietor: are there members of the public that would like to address the commission? next item. >> did we approve january 11? president vietor: we approve them of that the same time. >> communications. of the commissioners receive the electronic copies of all of the communications regarding this meeting. also, this is the time where

commissioners might make any comments related to the calendar as well. president vietor: hearing none, next item, please. >> before the commissioners, a proposed resolution for the citizen's advisory committee. >> before you today, you have a resolution for the 17-member puc advisory committee. many of them have been meeting on a monthly basis, sometimes

having issues brought up like waste water, power, and environmental issues. it might be a nice way to thank them. president vietor: i think we would be honored to consider hopefully passing this resolution. are there vacancies? >> we have been communicating with the board of supervisors. there is one for district 5 and

one for district 10. president vietor: perhaps we can request that those positions get killed as soon as possible so they can continue their work. should we read the resolution? is there representation from the citizen's advisory committee? >> i only see mr. jensen. i believe commissioner torres will be present at that meeting. president vietor: is there a motion to adopt?

if you could express our appreciation, we would appreciate that. >> if there is another business item, this is the time to bring this up. president vietor: i would like to reschedule item 18 because we have a full agenda today. if there is no objection, i would like to do that so we can proceed with the rest of the agenda. hearing no objections, next item. >> items 7-10 will be called together. the public hearing to consider the adoption of the enterprises and bureaus under the jurisdiction of the public

utilities commission for fiscal year 2010, 2011, and 2012. a public hearing to consider the adoption of the 10-year capital plan for the water enterprise, waste water enterprise, and possible action to approve. public hearing to consider adoption of the san francisco public utilities commission for fiscal year 2011-12 through fiscal year 2020-21. motion to calendar a public hearing who on may 10 to consider the adoption of wholesale water rates for fiscal year 2011-12. item 11. a public hearing to consider the adoption of schedules of rates

and charges of the san francisco public utilities commission our enterprise for customers that are not municipal load. president vietor: welcome. >> that's a lot. i and the chief financial officer. we have been through a great deal of discussion today. as well as what we have already provided to the commission, and also what we owe you. we will go through this summary in each of the assistant general managers will be -- to they will

be the fourth budget hearing for the budget cycle. it will begin july 1. it begins the programmatic budgets. it is the culmination of everything have seen to date. -- you have seen to date. it includes the two-year budget under proposition 8. the second year of our proposed budget is $861 million.

the only other changes are the discussed changes for fringe benefit increases. they are actions taken by the retirement board. we were very close in our preliminary projections. the numbers only changed about $200,000 across the program. the previous proposal assumed the pension rate would be a 16.5% of salaries. that rate is slightly higher. we have reflected that in the proposal for you today. we have adopted rates that are slightly lower. instead, it was 6.6% that would be the employer required

contribution. a little bit of savings across those items. behind item number 8 is the 10- yera capital -- 10-year capital plan. item #9 is the 10-year financial plan. it also is requested by commissioner caen and commissioner torres. it includes a scenario to show the conditions once we get to 2014 and 15, what specifically we could do to keep the increase raised -- increased raises. those are included.

behind tab number nine. and it will be on slide 16 and 17 behind tab number nine. >> what caused the increase in the pension projection? the market adjustments, the market value -- it is because of

the stock market valuation declines. we are having to put more cash and because the stock market -- cash in because the stock market has not performed as well. general market conditions, the pension retirement system uses a five-year smoothing. if you look at our recent performance, we have done very well. if you turn the clock back, we are still absorbing those. >> everybody is hurting. is it possible to get a report

from the retirement fund as to what caused this? >> they have prepared such a report. i believe they also did some renewal of their projections. >> we are living longer? >> we are. in addition to the item number nine, there is item number 10, which includes the motion for a wholesale water rate hearing. i also wanted to mention that we have gone and updated that based on the resizing of the waste water department. i know we will come back to run through additional source system

improvement programs. we will continue to update those for each of those illustrations. in addition to today, we held hearings on january 13, january 20, and january 27. we provided those to you in your packet today. we owe you a feedback and follow-up for items we have not provided to you yet. what i will do is turn it over to each of the assistant general managers. they will walk through when they are planning to report back to you. president vietor: thank you. >> the first step is the assistant general manager from the water enterprise. >> thank you.

the items we wanted to follow up on behalf whole enterprise was for the facilities plan. we are in the early planning stages, all three of them very old facilities. we plan to bring a very comprehensive report to you where we go over the planning effort. what the budget and schedule numbers are for the projects. and also identifying the decision points that the commission will have down the line in terms of environmental review, and budget approval, all of those facets. the land management side, we are taking certain parcels in the city of san francisco and putting them in the management of the natural resources division.

that is the twin peaks land. those will come to the natural resources management. we are proposing a minor shift. probably after a year or so of working, we will start to formulate the budget request for the future that might have augmentation of resources. it is premature to say what we are going to do. >> there is no urgent need that has been identified on any of those parcels? >> for example, we go back to $200,000 for an assessment of the trees. the look problematic in terms of

both potential fire risk and the habitat. we might again in this coming year proceed to another. president vietor: i just want to make sure we are covered. and that there are no potential funding needs. >> we have money that we can put in there now. a week in early prioritizes. >> and there is the water department. president vietor: any other questions on the water department?

good afternoon. >> the first two are related, i know that several of you have some questions. we will be coming to you february 22. we will talk specifically about this item. it is somewhere around $4 billion right now. if the commission decides what we are going to do, before billion dollars versus the $7 billion, -- the $4 billion versus the $7 billion.

and how does it affect the rates? >> we will have the rate discussion and the sizing discussion at the same time. >> white of the dilemmas that was brought to my attention. the other part of the dilemma was that when new contract with a program manager, it becomes kind of eight chicken-egg problem. i would like for you guys to figure out how to get us out of

that. if we have a detailed review of that program, so be it. i would hate to adopt a program size based on our understanding. >> we will be happy to try to do that. the odds are, we will conflict them out of doing anything. the other way might be a phase one and phase two.

it might be based on the first discussion. >> the only concern is that you don't want -- >> in any case, the contract would not be a set amount. >> any other questions? xinhua -- [unintelligible] >> at this point, we are sitting

down and hopefully we can finalize that before we come back to you on the twenty second. i believe we can address that at that time. >> those were the only two items that were outstanding on waste water. >> any other questions or comments? >> for the power enterprise, you had a number of issues that you wanted to discuss further. in the context of an area where we have key budget cuts and deferrals, we have $100 million in transmission of grades. it has been reduced. we reduced by $32 million, more

has been taken out of the capital plan. 30 million taken out of the capital plan. $21 million for the go solar sf program. even with those reductions, $62.5 million we have a high rain year. we had not budgeted, so the actual sales ijanuary and february amounts to a little over $3 million.

the go solar sf program and community choice aggregation, issues that you talked about as a group and we have had further conversations with president vietor about. we want to increase funding for energy efficiency and conservation programs. we have program funding shortfalls, and those high priority policy areas. i will take any questions that

you may have. >> prospect. i guess it is still an open issue. that depends on the capital investment structure. is this a cash flow issue. is this an ongoing funding issue that we'll have to deal with? i think it would be presumptuous and misleading to include the perception that we will issue that. rather than stir up the process of trying to be balanced with that, i would be comfortable

removing that from the financial plan and showing the resulting shortfall. it becomes a problem that we need to deal with because i am not suggesting for proposing that we reduce the capital program to its lowest level of need. i am very much aware of the issue and the sensitivity that flows through that. those are issues that we really need to work out. my objective would be to avoid the issue at the same time we are having that same level of subsidy that we currently have. i would propose that as a change to both the capital program and the financial plan. >> that would mean starting in 2014, it is about $62.5 million

that will be funded. we will take those out. it makes us come back and continue the conversation about where does that come from? president vietor: i am hearing is say, you are talking about the power revenue bonds funding and not that that we haven't heard. the clean renewable energy bond that we have done historically -- >> i got a note indicating that it has no cost. and that being the case, it would be no reason for eliminating it. hong >> i have heard this issue

with the general fund. we will learn how to address that issue and look at it with some creative thinking. >> that was at the last meeting also, so we have been tracking that. >> i want confirmation that the suggestion is appropriate? president vietor: i am supportive of it. i feel like it is really money on the table to get that cut in any way. it has really been troubling to see the decrease. go solar, the program should be

funded as much as possible, understanding that we are saddling with our budget this year. i am supportive of that. i would love to hear from other commissioners if they feel is a good use. and we're fortunate enough to have them. >> one other point of clarification. whee recommended be funded at $2 million, we recommended that there be a split between the funding available for low- income and nonprofit vs. the rest of the program participants. we recommended that