i would agree but the building built in the 2000 tehran region in -- era max down the slide triggered by would support -- era maxed out. >> many of the statements made b y president goh also resonate with me, especially the -- i don't know if that wa s a failure to consider a lot split prior to construction, or if

that was considered at all. the maximum use was evidence it was built to its full potential, rather than more modest. never having done a condo conversion, it is useful to hear that on both sides of tehe issue. it probably does carry greater home value, so i don't know what offsets what. being more new than president goh, i am aware of the small lot

issue, and i am sympathetic in that regard. i am not sure where i am going to land. it is pretty mixed. >> were we to overturn it, we would have to find discretion, and the other way to overturn it is to have error, and there is the fact that it is not the predominant element of that neighborhood, but they do exist. one thing that is very similar with the pennsylvania thing is

that if you ride by their tonight and it is not a split lot and we allowed it to be a split lot, you would not know the difference. another consideration would be the fact that a large building was built in 2000. the economy was very different theory of we do not actually know why they chose to go that route -- the economy was very different. we do not actually know why they chose that route. have been serious changes in terms of the ability to get a loan and the value. the segment of the real-estate market has been hit hardest are condominiums, and i think it could case was presented as to why that is not an equal option or even reasonable. the difference between this and the case in pennsylvania was

there was a parking there, and more importantly, there was serious opposition to it. it was a feeling that someone sought to gain the system. i do not take anyone thinks that is going on here, and when i read this i was hoping someone would talk me out of fitten -- out of its, but a statement made by one of the appellants have really resonated with me was that what we are supposed to do of here is to seek a balance and not do violation to the code and make sure what we do does no harm to the community, and i do not know how we could demonstrate any harm to that community, and we could see how there are great benefits to be had by the appellant, and were

we to allow it. i feel we should overturn the denial with findings to be written later, having not to do with abuse and discretion but having a different feeling. >> would you condition it? >> absolutely. thank you for bringing that up. it had to do with enlarging the envelope so as not to have that great an impact. >> i think vice president garcia, if you could be more specific, but would be helpful.

>> it would stay the density would have to remain as it is now. it is the reasonable way to state that? >> if i may suggest language, it is that both properties be limited to single family dwellings and that there be no future expansion without variants. >> how about the envelope. >> i think he is talking about expansion. >> both properties would be limited to single family dwellings. >> would that be in perpetuity? >> until this sort or another board would ensue if it's. -- this board or another board would undo it. i would not overturn that, and

if they did come in for an application, we would deny it, and they would have to come appeal to you why the condition would have to be removed. >> we would not be sitting on the board. greg >> may be pure give some people are here for a long time. -- maybe. some people would be her for a long time. >> i would like to ask the appellants if that is something they would be willing to a except -- to accept. >> i would accept that condition. >> i am just clarifying your motion. you would be adopting findings, and those findings would include a determination of the error at

the discretion. >> we will call the motion again. >> on the motion from the vice- president to grant this appeal, overrule, the conditions to be adopted at a later time, but there would be a notice of special restrictions to limit both properties to single family dwelling and no further envelope expansion without a bearing. on that motion? >> no further envelope expansion, period. iraq's again, the limit to -- >> again, the limit to single family dwelling and no further envelope expansion. >> that means height as well.

reaction we are seeing an indication that is cracked. -- >> we are seeing an indication that is cracked -- correct. >> on this appeal with those conditions. commissioner fung: no. >> thank you. the vote is 4-1. the appeal is granted. the variances are granted, and we will schedule findings to be adopted at a later time. >> there are no further items to come before the board.

captioned by the national captioning institute --www.ncicap.org-- >> i would like to call the meeting of the public utilities commission to order. vice-president moran: here. commissioner caen: here. commissioner courtney: here. >> commissioner vietor is

excused. >> we have to work harder. mr. secretary, if would call the next item. >> that would be the approval of minutes of the special joint meeting on may 5, 2011. >> moved and seconded. link electronics, inc. model number: pdr-885 software version: 3.0c address the commission on the items not on the agenda today. we have no speaker cards. >> do we have any speakers? seeing none, moving on to communications. >> the commissioners have received electronically copies of all of the letters in the summary.

are there any questions regarding the staff report admitted in this packet? >> i have a comment on the letter summary? regarding the impact of climate change and storage and those of you who have been around for awhile now that i have been a big advocate of more storage. i would point that in your direction for observation. >> i had a conversation with staff a little while ago about the same subject. the conclusions of that are somewhat interesting. i do not know if staff wants to speak to that. at the climate change modeling we have done indicates that we

are relatively untouched by that. in terms of the effect on an odd mix of what elevation our watershed is at a what water rights we have. >> i am speaking about the ability to capture rainfall. you need some kind of container to have the ring go into it. >> thank you. any other comments on the communications or the staff report? any public comment? hearing none, on two other commission business. commissioners, i have just a couple of items. first, i understand that item 9e is not ready for action at this time . we thispull that -- will pull

that. i had a conversation earlier today. we discussed several of the items that were on the agenda today where contracts have multiple modifications over time. some of them are obviously going to happen. others look to be items that we could learn from and do better at in the future and perhaps making a better understanding for these conditions. there is clearly an informal process in place to do a post- mortem on a lot of these situations. we can learn from that what we can. one thing that struck me is that

it would be useful and important to have the informal process more formalized to make sure that as we have surprises, that we learn from them to the extent that we can. to make sure that if there were mistakes, that they are not repeated. that is something that she has been working within her own staff for. we could proceed to formalize that. at some appropriate time, you could come back to the commission to describe your progress. the last comment, i believe this is the last meeting for somebody that has been promoted. she will be going over here. the good news is that she is staying in the family.

i want to thank you for your work in support of us over the years. we will miss you. it is good to know that you will be around. and the other commission business? mr. secretary. >> the next item would be the report of the general manager. >> good afternoon, commission. today we have just one item in the general manager's report. it is an update for the water system program. >> good afternoon, commissioners. mr. secretary, if you could hook up the computer. your packet should include a copy of our latest report for

the latest quarter of this fiscal year. this covers december 26 through april 2. the publication of this report was delayed by a few weeks because it is essentially going to be the basis for the program revisions that we will be presenting to you in july. i advised you a month or so ago that we would be coming back to secure approval for budget. if you do approve those, we would turn to the revisions of the department of public health and safety -- safety seismic commissions. i wanted to thank the opportunity to thank my team for the extra effort and diligence that went into this particular report. we want to come out with as accurate of a forecast as possible. that is our understanding of

project risks. starting with an overview of our local program, these are as of april 1. the number in parentheses are the projects in each stage. we only have five of our 40 local projects remaining. three of those five projects are actually water supply projects. during the third quarter, we move to the hunters point reservoir project from reservoir construction. we wanted to remind you that about 72% of the total project value is allocated with two large water supply projects. we wanted to point out that we have five ongoing local projects in construction and two-thirds of our local projects have had

their construction completed. similar formats for the regional program, and here we only have six projects. six out of our 46 regional projects remaining. two of those six projects are support projects. habitat reserve program and watershed improvement program. during the reporting quarter, we reached $2.3 billion worth of product construction. if later today you approve the construction, the piece of the pie will grow by $423 million. during the quarter, the replacement project went from this, and we also had three projects move into construction. that would be the water improvement project, the dam project, and the replacement

project. as of april 2, we completed construction on two-thirds of our regional projects. another familiar slide where we compare the variances on schedule and costs from the last reporting quarter to this quarter. you can see that we are forecasting program costs to be $148 million less than the approved budget. that is on the regional side. this is a $27 million reduction in the savings we had accumulated under the approved budget. the forecasted completion of the regional program is now eight months later than what was reported in the previous quarter. this is still tied to the project. i will explain that later in my

presentation. focusing on the last to the appeal columns, we are forecasting to be $43 million over the approved project. that is a $12 million increase over the last quarter. the majority of this increase are associated with two of our local water supply projects. the forecasted completion date on the local project is about 22 months later. this is a nine-month slip from the last quarter. >> that is in months. nine months? >> lighter than what was predicted. >> the west side recycle water project has encountered major

challenges where a number of public comments have forced us to take a step back and look at finding alternatives to the current recommended site in golden gate park. we have conducted a number of workshops to address those comments. those have been completed. we are now starting up this phase. the project was essentially put on hold pending these three sets of workshops. we are working very closely with the water supply group to facilitate that process. this is a chart that i also share with you every quarter. it shows the approved budget in red in comparison to the forecasted costs in blue.

we continue to have forecasted cost that is well below approved. with respect to the last quarter, the savings were reduced by $39 million. it is important to keep in mind that we are still forecasting to underrun are approved budget by $5 million. let's look a little bit at the breakdown of the forecasted cost change between the second and third quarters. what you see in the boxes are the changes from q3 to q2. the red ones are cost increases. this has increased by 40.5 and

$13.8 million respectively. our construction costs have decreased for a net of $39 million. these are costs associated with project management and our various environmental efforts, construction management, as well as other soft costs. other costs include costs associated with mitigation, improvements, and real estate to spend -- expenses. overall, the increase in costs are attributed to a limited number of projects. shown here are the projects that have had the largest increases in costs. he'd appear projects have had very large increases over $10 million.

that increase is based on a new 35% design cost. the previous metric was based on a conceptual engineering estimate. it did not include a number of issues that we have to deal with including a real-estate transaction as well as a much longer schedule for that project. in the case of the peninsula pipeline seismic upgrade project, the increases with refinement for the project based on the latest geo technical information, the decision was made to replace a number of pipeline segments on the peninsula where we are vulnerable to liquefaction. this is in the -- in to the additional scope in three different occasions. i will elaborate more on the cost increases.

more from that perspective later in my presentation. >> it does occur to me that a couple of the projects we have been tracking in terms of costs have had some cost increases. if you could just give me an update on that spread sheet you give me from time to time. >> in the reporting quarter, we have some projects that we were forecasted to complete almost six months later. i wanted to elaborate more on the regional projects, which are the four above the darker line. this is a project that is now completed. it has reached the central completion. we need to keep the contract opened to allow the contractor to come back and perform some of the repairs at no cost to us.

they accidently damage being closure of the generator on site. what is important to know is that the facility is fully operational. we just need to extend the contract for the repair. for the peninsula pipeline, the addition of new scope has resulted in the increase in the project schedule. we added eight months to the project as a recommendation that came from a third party review in the design phase. the additional eight months was recommended to account for the temporary slow down or maybe even shut down of activities during hot and dry days to try to control the airborne asbestos that we may encounter. this is more of a contingency

type addition to the project. finally, for the filter gallery, we did a review on that project. this was recommended for two reasons. one was to be able to procure long lead items and this will deal with the work we will be doing that will build our environmental seasonal restrictions. now that i have highlighted the major changes at the project level, i wanted to summarize what did cause the cost increases and the leas report of this quarter. you should note that we follow the recommendation by our program adviser. late last year, he recommended that we produce more detailed resource