is prone to failure, too. it can be age. it can be corrosion, and it can also fail in performance due to size. our treatment plants are really were courses. they are working, working, working. we have mechanical processes that have to run 24/7, and then have to be reliable. we have equipment that has excessive wear and corrosion and facilities reaching the end of their useful life. we talk a lot about the digesters. the digesters are a 1940's design, but we also have issues with our treatment plants.

you can see the collapsing ceiling. most of you have seen the situation and conditions, and it is dire. we are living on effectively borrowed time. over the last 18 months, we went through hearings and workshops and public workshops and hours and hours of discussion and came up with goals and levels of service for the waste water system. i'm going to run through these five, and then we will start drilling into what the project are in a sewer system improvement program, what size we want to look for in the future, and getting started.

the first goal is provide reliable, resilience, and flexible systems that can respond to catastrophic events. that is to do with compliance with state and federal regulatory requirements, really making sure that all of our equipment is up and running during the wet weather events and making sure that our collection system is utilizing capacity. our combined sewer system is unique in that we are holding everything, capturing everything and trying to treat it. we want to make sure that our critical functions have 100% redundant. the force mains i showed you, we are concerned because we want to be able to have two ways to be able to convey that much flow, or a rupture could cause waste water into the bay or damage people's homes. we want to make sure we have facilities on line after an earthquake within 72 hours. because we do have our trends for storage boxes, those can act as reservoirs to hold things so

we can stabilize the system and get things back online. minimizing flooding is, of course, an issue and a public concern. and being able to control and manage flows from a storm and a typical design but we are looking for our scissor system to be able to handle is 1.3 inches of rain. providing benefits to impacted communities, limiting voters to the defense line, and being a good neighbor. looking at the question that commissioner torres asked, the sea level rise, our staff for his debates in regional and national forums, and we have to make sure that anything we build in the future is going to be there in the future, and as we are planning, we have to look at what the change will mean for rainfall intensity, and what it will mean for sea level rise and

what it will mean for the future. >> can i interrupt in the future -- can i interrupt you real quick? >> we have to chase the palms that pump flows out on the bayside. we're looking at ways to block the system so we are not getting as much salt water in, but in some cases, that can cause an upstream problem by blocking the outflow that might cause flooding on land. it is going to affect how we cite things. where we can build the digestive facility.

we might not want to be building in the day lands where there would be issues with sea level rise and we could be affected by that. we want them to be able to have a 100-year life so we can have an asset that will be in place for some time. treatment plants, we're not planning on moving them to higher ground. they are at the perfect location to maximize our benefits of gravity. they are sited so that gravity can stay on our side. and, of course, how help me with this. achieving economic and environmental sustainability. it is a lot of things, beneficial to all the different things. the outcomes of wastewater treatment. it is also getting to the point where we have stabilized life cycle costs, so we have not just up and down. we did not have emergency

response types of things. we get a head so we extend the useful life of the office. we also talked about utilizing our methane, which is generated as a byproduct of the treatment either generating energy or developing a gap in the system. to my favorite topic, we will beginning into the project included in the sewer system improvement program. this map includes collection system odor control project, a lot of low and pack design projects, and these are actually rolled into one category -- a lot of low impact design projects. it will be looked at as a flood control collection system improvements and low impact design. sadly, we have not gotten to have our urban watershed framework discussion yet, but we will. [inaudible] we can methodically look at each base and in the city and analyze opportunities and challenges and

look at low impact design complex and system improvement, lots of different ways of managing storm water better so we can relieve some of the situations we have now. we have upgrades at each of our treatment plants, north point, oceanside, and southeast, and we have a full rebuild at treasure island. that addresses the issue we were talking about with salt water interested -- entering the system so water can go out, but saw water cannot come in. the channel tunnel is a critical improvement, and we have also included on your outfall rehabilitation, and i'm going to go over some of these projects briefly. i also want to highlight what is not included because we always have to highlight that. there was definitely a lot of great feedback we got during the workshop process. but we're not looking at relocating south -- se plants. at a cost of with a $5 billion. we are not looking at a crosstown,, which would be about

$2 billion. we are not looking at rebuilding. we are looking at taking care of what we have now. we are not looking at replacing or building new things out to debate. we are looking at improvements. nutrient removal would be something that possibly may hit in the future, but it is out well into the future. that will be something we would have to address. we have put all the projects on a pie chart. if you look at this, we are at $5 billion with that list. what we are going to do now is talk to some of those projects, and i will have the support of our finance group in a little bit to talk about what the

financing costs are and how the program could be fully funded and when we look at some of the alternative funding programs, we can see what the financing costs would be to support the program. in addition to the $2 billion to address the biggest threats, which is the digestive facility, we have other issues. this is a 40-acre site, built back in 1952, and we have issues with structural seismic treatments, odor control. we have to replace some of the major inflow points. this is where the flows into the treatment plants. we have upgrades to mechanical equipment as well as architectural landscaping, but there is an awful lot of work that has to be done. some basic structural and seismic improvements so we can make sure the plan is going to be functional after an earthquake. each of those little dotted lines highlights some of the it

improvements included in the $730 million. oceanside improvement projects, about $250 million. there is upgrades to the west side pump station, which is just north of the treatment plants, upgrades to electrical implementation. once again, you see improvements to grit removal. we have tremendous problems with sand coming into the system through the transport problems -- process an hitting the plant ready hardware it can cause some real problems. also, there's a lot of wear on the mechanical equipment. we have to have enhanced ways of removing the sand from the treatment process. seismic upgrades as well. the north point plant is a 6.5- acre facility, and it is really in a residential business area. it is a pretty densely populated residential area.

gore control is a major concern that if this facility as well send joh. we are now the operators of the treatment plant but in the near future we will be ones that are holding the permits responsible. this is just being held together barely. we will need to rebuild this with a brand new facility. we expect the life of these to be about -- >> what about the rate payers and treasure island?

>> redevelopment plans called for about 4000 to 6000 units. then there is a small amount of mixed use commercial including a smaller hotel. >> would that be impacted by the governor's proposal to do away with this? >> it could be negatively impacted. >> the number might be -- >> that could change significantly depending on the economy as well as three development and finance. >> we are projecting what we are receiving income from those protected residents prefe? >> we went out in the 10-year financial plan and then we went out 20 years following that. we have assumed based on what is

the guest at -- best guess at this point. >> thank you. >> the pictures of treasure island are the least alarming. if we hold a permit, almost in respect of of what the rate of built out is, we have an obligation that we have to meet. that certainly affects our financing. that is a clear and present need.

this involves having industrial diverse. we anticipate this to have lights at about 50 years. that crosses the creak so there is some vulnerability there. i did not go into flooding as much as i could have but basically in we have flooding issues that hit many different neighborhoods. they have to do with the tributary area on how much below is moving towards a certain area. in some cases, we have physical obstructions.

we can do some improvements to reduce localized flooding which is with impact design or other system improvements. this is the result of our modeling. we will look at how the system is performing in wet weather. the full project list treatment systems we have our dollars in 2010 as well as those in a time of construction. what we have to do is lay them out in a schedule and escalate the price to the midpoint of construction. the total sum would be $6.9

billion. now i will move into a discussion on what is in our 10- year -- and get some conclusion as to how we move forward. really what this was is that we laid out the entire program on our schedule for all 30-years of it. the 30-year duration. there is a 10-year -- for the source of the improvement program. we are getting the planning going, getting the environment reviews started and really what we locked down was the first two years of funding. now, we are -- to get a program manager on board to assist us. at the first 10-years of our program, because we have to so

many big projects starting out, this is $4.1 billion. if we were to look just at the end-year capital program, just to finish those programs, deferring a lot of flood control, work on the outfalls, and we are living on borrowed time. we would be pushing it out for other decades to other times. there is planned work that can be methodical. we compare the -- to many other options. i want to spend some time on

because this is a little bit tricky. i will have three slides that are basically in the same month. this is a $2 million program. when you add financing, when you lay out the program over time and you add out financing cause is $1.5 billion and brings the total to $8.4 billion for that program that has everything in it. this is the system improvement program. this goes to $4.1 billion and at the financing cost would be $5.1 billion.

we will be talking about a 9% increase in program. in this case, you would be looking at other things that would be forgone. on the left of the 8 billion we have other scenarios where we are pulling trijets and reducing the amount of scope that would be delivered. in some cases, reducing actual programs. in red, you can see on the treasure island, we are at 9%. we would not be able to afford the treasure island treatment plant. we have program management. this will be scalable depending on the size of the program that

we issue. we will have a larger program or a smaller program. what we are proposing is a 15- year contract, $450 million, to have a professional group come in and analyze this program further, validate the project, validate the construction schedules. >> everything is the same except for the final column. >> yes. >> project management would be a function of city sass' the dissipation. we have staff to try to get it

to move. -- project management would be a function of the staff of the participation. if we have a project manager help us, they are slated for being able to participate in design or construction later. and minimize the risks to the system at midday the scope that we have. >> what have we learned from our current program about this particular issue? >> well, i think no one argues that we needed the help of a

program manager. we have greatly benefited from having -- and the technical expert going through a and a validating the schedule. a lot of the schedules that will support this have been created by the program. we have some challenges that we did not have. we have the bayside issues, but we also learned about these seismic standards. do you want to go through your top-10? >> are these on conflicts or more general? >> good afternoon. i am the assistant general manager. one of the big lessons was definitely the conflict of interest. as you recall, we started with

-- and after five years, the companies ended up with parsons and jacobs. one of the things that happened is that the competed and say formed two teams to compete against each other. and there was a learning curve. we had to teach them that we built over the first five years, after that five years, ruston's broke up again and they competed against each other and then parsons' teamed up with -- and -- went after it. parsons and -- one and because of the conflict of interest, we had to bifurcate the contract because parsons in the pre construction activity. the thing that we learned and

that whole process is to get one partner that will help us from the beginning to the end so that we can have a comfort but they need to know up front that they cannot pursue any other work other than helping us to plan and manage the work and they think that was a very valuable lesson. >> the reason i bring this up is because these commissioners were not here. this was not a pretty picture. i guess we did not foresee it. so, we did not anticipate correctly. i just wanted to bring this to everyone's attention that this would never happen again. that is the reason. >> >> that is why we have this

very detailed chart. we have posted a draft for so that we can solicit questions and other clarifications from consultants that might be interested in participating as our program manager. >> now, we'll go back to a chart that was similar to the first one that i walked through with you. we will talk about the differences between these programs. when we look at the $8 billion programs basically, we are all in and we are completing all of the projects that are on the list. if we look at the treatment plant project, we go across the first line to the diastolic facility. the $8 billion program completes the task and the bio solid program. it would need additional funding for the 10-year and above the 9%

rate increase. biofuel we would be able to cover under all options except for the 9%. for improvements to the treatment plants, the 6, 7, and 8 billion for southeast what would be able to cover everything. when we look at a 10-year, we would be covering only part. we would stay with our minimum which is a seismic upgrade. we would not be looking at treatment, controls, we would be making sure that the structure would be stabilized said that it could survive after an earthquake. we would be doing seismic improvements but not necessarily completing the lines and the replacing of the force mains that run from the west side on station. at north point facility, the 10-

year rate increase, we would just be exclusively doing seismic upgrades. the full list of improvements would be $7,000,000,000.- 589932685 dollars. $7 billion and $8 billion . we're not able to complete the outfall in the 10-year and -- or 9%. that is because they are because -- that is because they're outside of the 10-year area and outside of the funding. >> before you moved from the slide, it is it correct to say that the different options that get laid out there are basically three protestations as opposed --