double $1 at 3% inflation, that matters a lot to us, because our inflation in construction is typically not 3%. it is upwards of 5% or in some cases higher, and that was in the chart that kiran showed, so that helps frame the context of rates and how would affect our average customer, and so the discussion today is really to what is the best policy making and deliberation with being to be able to fit affordably into our customers pocketbooks, a 10- year capital plan that we can implement, including what that means for the difference scenarios for the improvement program and then whether or not to move forward today with the program management consultant to keep progress in to keep moving on the progress. commissioner torres, does that

into your question? commissioner torres: not really. i want to drill down a little more. >> if you look back actually in san francisco, you look back at our electric bills that the bureau of labor statistics put this out, the average inflation has been about 6%. commissioner torres: that is commensurate with the rate increase. in respect to the $8 billion model, that is the one niese the highest increase in. >> correct. commissioner torres: and the decision has to be made by this body about the money under the best scenario, so as we begin to look at those numbers, as we see those rates necessarily increasing, and what other

safeguards are we going to put into place so that these charts remained et? >> that is a great question. we come back to the commission every time we do a quarterly budget update to show you where we are. in addition to that, during the annual budget process, we are always bringing forward 10-year illustrations of the affordability index as well as the projected rate increases, and while we are discussing with you a large 30-year program, the world changes, et and decisions can be changed along the way, and for planning purposes, we are showing you what we think is best by year, but in some cases, we may have to revisit that, and we are given the opportunity every year, in case we need to fine-tune the program by ratcheting down for some time to stay affordable or perhaps to defer year or two of a large part of the program, so it is

never completely done. commissioner torres: going out 28 years from now, you will be retired then. hopefully, all of us will be retired. >> wage increases or chemicals would go higher or lower, that would need an adjustment. we live in a beautiful area. commissioner: we are not at a point yet where akin say we want those charts to stay steadfast. -- not at a point yet where we can say we want those charts to stay steadfast. >> -- commissioner: we were

looking at whether or not they were viable. not to a large extent, but after that review occurs, it would obviously have some impact on the numbers, and we do not know what impact this will have, that sacramento will have. i know the parties are trying to reach a modicum of compromise, but i do not know that we will be able to reach that in time, and given where we are federally, we do not know what kind of bonds, build america bonds, will be available. right now, it is fine. we certainly do not have the borrowing capacity in the state that the city of san francisco has in terms of the incredible rate that you can borrow money at, but still, at the end of the day, as we see the debate occurring in the house, and we see the movement in terms of this budget a but the federal

and state level, a lot of the expectations we thought might be available may not be available, and i just want to make sure that we take that into account, because you may be getting great interest rates in terms of the bonds out there, but there may not be that federal subsidy to help us out down the road, and that is a challenge we face with many of the bond initiatives across the state in this nation, when the obama administration has put forward, which may not be available. >> it commissioner moran, the point brought up is a good one. we have a long ways to go. we will probably be back to talk about the base line and twist of dollars and actually about one year from now. we would expect to have a program manager on in the fall.

the process takes awhile to get through the requester proposal process, and the selection of the rates will qualify -- it will be key. what we really need to day -- commissioner moran: a procurement manager and a program manager. >> we will then be able to go through line by line what we have got, and they will be validating staff's work, doing additional work to look at where our facilities are. some projects may be broken up into pieces. some, infrastructure could be in such bad shape that we would have to rip it out ahead of the improvement programs and do it right away. commissioner moran: what is your timetable for finding that

person? >> we are having discussions with the union. when those discussions and, we anticipate those discussions will end, and we will put the rfp out on the street, so we can have large consultant firms be able to make their -- it goes out in march. commissionermoran: march 1. >> it is on the street for a period of time. i will actually go through the details of what we know and what work has been done to get proposals. we do a shortlist. we have a fairly extensive interview process of the top candidates. this been decided, it comes back to the board of supervisors,

and, unfortunately, it looks like we are hitting the board in august, when the board shuts down for bids, anyway, so it would be shortly thereafter. we would get the controllers authorization. >> there is no way to accelerate that process? >> there seem to be lots of ways to slow it down though. commissioner moran: of course, there are. it is government. [laughter] >> you do not want to hurry and get married to someone. we waited, and that is why i am trying to push to get it out on the streets as soon as possible so that they will know we are real this time, but i just wanted to make sure that we get

the right team to work with for the next 15 years, because as i mentioned before, we saw a lot of turnover, and i just want to make sure that everyone is clear what our expectations are as far as needs on this program. commissioner: this is not an action item. this is basically for us to give feedback, and i guess the most meaningful feedback you have is that we are impatient. >> that is a good thing to hear. that means that you want us to go ahead and get the rfp on the streets. president vietor: anything else? the next item is for the waste water. before we get to that, any other

reactions or input and we're looking for a staff on this? any public comment? ms. jackson? >> espinola jackson. i did not know i would be jumping up so much today. i really hope that you pass on this. 15 years have passed. we have had several directors. the process has been really, really slowed down, and like you said, things have been happening, and i am glad that i was here today so that i could whisper in my baby's ear. i have been working on this

since the 1970's. i heard her say that you have been out there. we need to really get the work going. thank you very much. president vietor: ok, any other further public comment? if you did state your name for the record, sir? >> my name is larry wong. i represent the collective bargaining unit for the engineer's and technical people. the past couple of months, kerin has approached local 21. at two of the meetings, we gave presentations. last week, we talked about the work scope. at this point, local 21 supports the rfp conditionally.

it was involved in the resources of the puc staff, equipment, a final review of plans, reviewing training requirements, but making sure things are up to snuff, preparing a manual and policies, identifying staging areas. the one thing the union has a problem with is that you already have staff on board. they have the capability to do many of these items. the thing i find stressful is not interesting -- this was developed with the program. the program manager is being asked again to develop it.

so does that mean we are throwing good money after bad? so i am wondering, last year, the commission had a panel to make a series of recommendations. one was a plan. another was a transfer of technology. so the staff as been working with consultants and the manager, and it comes to a point where are we going to keep on hiring to do the work, or are we going to use our own people to do the work? kranitz, there is other expertise needed for local impact, design, technology, and the union supports experts in those areas. what i really question is there really last half of the rfp.

construction management comte and what i would encourage the union to do is to allocate some of his responsibilities but, because they have the experience, they have the training. prepare procedures because the staff right now is utilizing the procedure, and when the program comes on line, they will tweak it. so the collective bargaining unit is all for this going out. but we have a reservation about the tasks. president vietor: think you w

mr.ong. >> this has been a lot of work, and we have a few comments. >> this is the current item we're talking about, and one thing you're talking about to local 21, the department of public works, and the whole theory behind this need for an rfp is the expertise that we do not have, so the m.o. you clearly states that the infrastructure -- the mou clearly states it will provide whatever resources are necessary to perform the task, and and work outside of that, we will ask for dpw experience, and if none in the city has the experience, then we will ask. the reason we put certain tasks in the rfp is to identify that we may not have this experience, and we want the consultant to

provide someone with expertise in that area, and clearly, if we do not need the services, then we do not pay for the services, but we felt it was vital to put it in an rfp. before we do that, we will work with in-house pc, so that is where we sort of disagree -- within house puc. this is so they will know what expertise they have, so that is the difference between the two right now. president vietor: thank you. mr.w ong,. -- mr. wong, i think we have heard your point.

commissioners, any of the comments before we move on? thank you. let's call the next item then. secretary housh: item number 10, -- >> i think a recommendation today is that there is general agreement on the first two years and that it requires a 10- year capital plan. we fully expect it would change as we go through that, but i would recommend that you adopt the plan, knowing that will be a variable and changing plan as we move forward. commissioners -- president

vietor: commissioners? women make a comment. the greatest concern is that we do not create white elephants that we will have to worry about down the line. i do not think we do. one of the things i know that commissioner caen is interested in is getting the work on the digesters going. that has been a long time in the works. it is good that in the first couple of years, we do that. that is enabled by this. i think the recognition that we're going to have to be taking a look, not only the approach, that is the important business of this commission over probably the next several years. any public comment?

commissioners? commissioner caen: i would like to move this. secretary housh: next item, and ms 13. the proposed budgets for the bureau's 42011-2012 and 2012- 2013. >> we have met, and i see that they are here today. we are still recommending that we go ahead with what our plan was and move forward. if the commission has questions, we will be happy to answer those.

commissioner: commissioners.? : commissioner what has been the response? you did meet with the union, right? >> yes. this group has been municipal executive association with members of local 21. commissioner: any progress? >> we exchanged ideas, but in the process of the way the budget works, this is a preliminary phase, and those discussions get more intense as you move to the other phases of the discussion. >> so the last time we met, we talked about our role. my primary concern with local 21

was the was not certain we were engaging in conduct which i thought we may have been required to engage in. i had a chance to meet with the mayor. i had a chance to meet with local 21. this is the first by it had heard there was an seiu member involved. i have been persuaded that while we move down this road in good faith, i do not think anyone wants to take this with confidence, but i am pretty confident that for me, personally, we can move along in this direction and have every opportunity, as does the union, to exchange ideas in an effort to reach an agreement, so i am prepared to move the item four, especially after speaking with the city attorney about what our obligations are and now being convinced that we have met our obligations with respect to this.

commissioner: do we have any public comment? secretary housh: we have two speaker cards. >> i am a representative organizer. good afternoon, commissioners. yes, since the last commission hearing, we did have the opportunity to meet with mr. carlin and mr. harrington, and we did get a chance to submit a report on the findings given to you, a letter from february 3. hopefully, you have a copy of that. so in our meeting which was last tuesday, all five of our members from the real-estate services department along with friends from local 21 in did

meet with mr. harrington, and we were surprised by the frankness and the angry tone that he used when addressing our members. suggesting the elimination of some classifications. there were performance decisions within the departments, and when i say that, he pointed out problems, and we consider this to be kind of divergent that had been presented a previous hearings. he talked mostly about development at the previous commission hearings, but in this meeting, he was clearly focusing on performance problems, and we believe this is not an issue that should be addressed in this forum as targets of the moved

through the budget process. this clearly is a personnel matter that he has with the department. our concern about but is that there is no accountability in the proposal. as far as we're concerned, there have been no attempt made to hold management accountable. correcting existing problems that he has pointed out, a pretty extreme approached. wanting to replace experienced real-estate professionals with a general classification, no background in real estate, and we believe that is pretty extreme without having gone through other steps to hold management accountable. the employees did performance in the other missions every year. while they do have lots of years of experience and are very professional, they do have to

follow the directives of their upper managers and directors that are given the department, so, again, we do not see this rather interesting approach as a solution, and we have suggested to mr. harrington into mr. carlin that they add a classification in any support they can give staff. we have attached a chart that we gave you with the proposed reorganization, what it would look like, appear which would not make any difference in terms of the budget cost, so we are asking you to do it.

commissioner: this is yours? the one added new position? >> yes. commissioner: tell us about the senior administrative analyst. >> that person would add a skill set to the office. having the support of an analyst. i am not quite sure how to answer your question any more specifically. they do a lot of work with charts and numbers. i think with this position, they would have to get some with some special skills in contracts or leases or something of that nature. commissioner: would you consider

this to be sort of your first counterproposal to the unions? yes or no? >> yes. commissioner: earlier, you were making references to management. were you making that with the entire pc or within the bureau or department? >> both. commissioner: just so you know, it is a concern of mine but the workers understand what the procedures are that we are following here. and so, i have talked to a lot of people. i have spent time. i have talked to rebecca. i have talked to a number of people. my primary concern is probably high lighted on page 3 of your memorandum of february 16 to us. it is specifically related to the procedural concerns that i

had our last meeting and whether or not everything was out in the open. the puc is trying to circumvent the process. specifically, with respect to that line, that may be the case once you get the layoff notices, but as i sit here, et for you, i know that because this is being proposed and will go to the mayor's office, because i think ed lee is someone who understands the collective bargaining process, due process, i am trying to explain to you why i am prepared to move this forward, because on an advisory board, i think i have no choice but to move this forward,

because now, i am not only fairly convinced you'll get face time with management, but you will get face time with the mayor's office, and i do not think we are done with it yet, because it is certainly a proposal, but we will hear what you have to say. >> well, it is my understanding that the commission does not make with the decisions -- make the decisions but deals with the personnel issues. is that correct? ok. that is why i say we were rather surprised in the meeting to listen to mr. harrington, because clearly, i mean, at one point, he asked the staff if he thought -- they thought things were working well, and he asked us. .he said he could replace the existing scope of the department, or he could simply write everybody up for poor performance in institute plans,