2009, and if we do not actually prepare, adopt, and submit the plan to the state, that we are ineligible to receive funding for drought assistance from the state, which is the whole reason for doing an urban water management planning. basically, in summary, our level of service goal is that no greater than 20% systemwide reduction in any one year. what we have found is that supply is positioned to meet retail customer demand under all conditions. the wholesale customer demand exceeds supply in future dry years if we continue on with the limitation of the 265 billion gallons a day after 2018. that is one of the things that has been a bit of a challenge in this document, talking about the fact that we have an interim supply limitation in effect until 2018 with no policy decision on what we will do after that. so we carry it through for the analysis. what happens if we hold that in

place? but it does identify that there are demands from the wholesale side that are in excess of that that need to be dealt with. lastly, the retail per capita water use is in compliance with the water conservation act of 2009. that is what is commonly referred to as the 20% reduction by 2020 for urban water suppliers throughout the state. our per-capita demand in san francisco has been so low for the last five years, we do not actually have to do anything additionally on the conservation side to comply with that mandate. of course, we are continuing on with the conservation activities for lots of different reasons, but as far as that law is concerned, the city of san francisco complies with that right now. just to review, may 24, the draft presented to the commission and the public hearing was held. we have made what i would consider minor revisions to the draft plan based on the public comments we received in writing as well, and in your packet,

there's a table summarizing the comments we received and indicating the responses. the proposed final plan is being considered today. i did hand out one page for the commissioners, and there are copies on the table for an additional change that we are proposing in response to a comment we received yesterday that talks about supply plan activities into the future, and identifies activities going on that are very important to note in our plan that there is not a vacuum out there between now and 2018 on the future water supply for those demands. we think that is a good change to make to the plan to have a more complete record. just to note those demands, for the wholesale customers, again, we have the interim allocation of giving 184 gallons per day to

wholesale customers. as you can see from the chart, somewhere between 2020 and 2025, wholesale customers exceed projections up to 198 million gallons per day in 2035, so there is no net demand out there that needs to be addressed regionally. i want to shift now to the point of item 10, which if you read item 10, it seems a little odd that you do not just roll it into the urban water management plan, but there are specific requirements in ceqa and the water code requiring suppliers to prepare assessments for certain projects that are subject to review under ceqa. we brought some of those to the commission for treasure island and parkmerced. i believe there is one other projects -- hunters point. that was the other one. those were done as individual water supply assessments because they were not in the last urban

modern management plan. we tried to work through your where we have accommodated all of the projections for san francisco that we have now in this urban water management plan. so we have done that by working with the planning department on projections into the future and the city planning staff have agreed -- projections have taken into account all known and projected development for the city into this time, said the action and the second item, item 10, a test that yes, this item can be used for water supply assessment in the future as well. we have the air and water management plan adoption and the certification that the urban water management plan serves as water supply assessments for ceqa purposes. >> i have a question on that -- the resolution of item 11 seems to address retail demand, so the legal imports of this plan is

most focus on retail. is there any legal import on the wholesale portion? >> certainly for the water supply assessment portion of this, there is none. that is strictly done for ceqa purposes by the retail provider. in terms of the descriptions for the wholesale supply, we have indicated where we are with policy, and the potential difference in projections in the future. i do not know the legal ramifications of that one way or the other. maybe bawsca could speak to that or counsel. >> [inaudible] it would almost require complete description of how people relied on urban water management plans

going forward, but it is critical that you adopt your urban water management plan because you are the wholesale supplier. other jurisdictions are adopting their plan are pointing to your conclusions as the basis for their conclusions. as they go forward to approve projects, there would be legal implications after 2018 if those water supply demands were not met. not sure if there is -- commissioner moran: i guess that is a different answer, and gives me some concern. what i thought was the case is each water supplier has to come up with their own urban water management plan, that that is what would be cited in ceqa, that that is what will stand in lieu of a water supply assessment for any project being considered by an agency and any

reference to this document would be incidental to that. >> that is a true statement. my only point was that they cannot be inconsistent in the sense that if they get water from a different source and they can point to that as part of their urban water management plan, that is fine. they cannot represent that san francisco is going to do something other than what san francisco represents it is going to do in its chairman water management plan. commissioner moran: i will be interested if we get any comments about that. my sense of the plan is as it deals with retail demand and supplies that that is its strength. and that the findings we are being asked to make in item 11 are well supported. in the wholesale area, i think there is some significant problems in terms of presenting a cogent and correct view of the

situation. one is we are dependent on information that was provided to us. we did not generate the demand numbers. we cannot validate them. we understand there are some differences in methodology that we do not necessarily understand. and we have made some assumptions that may not reflect what is really going to happen over time. i think it would be a mistake if somebody were to conclude from reading the regional section of this that the system was in balance. a kind of says that because of assumptions that were made, but i do not think it says that. we take action that affect retail only, i am comfortable doing that. we take action that has some legal ramification for the wholesale service area, then i think we need more discussion. >> to be clear, i was referring to the action you are taking. you are only taking action with respect to san francisco's

retail. each independent jurisdiction has their own standard under law that they are required to meet. my only point was that they cannot make up a different story with respect to the supply that they from san francisco. it should be consistent with yours. we have not seen those yet. that was the point you are going to review the other urban water management -- >> i would expect that not all of the urban water management plans will assume deliveries are related to 184. that is only built in 2 hours. my guess is some of the other wholesale areas may not assume. >> as with all other urban water management plans, regardless of whether it is in our service area, the urban water management plans are focused on the local entities and retail. what we provide is a given set of common assumptions to all of

our wholesale customers that they can incorporate into their urban water management plan. what they do after that is completely their own business. >> i would just emphasize that. that they were provided with a set of information that they can use, and i will have to respond to that -- they have to respond to that and incorporate it into planning. whether they go beyond that, the challenge is to the agencies. that is why it is actually adding reference to the work that bawsca is doing. any other questions? commissioner vietor: any public comment on this item? >> we have one speaker card.

>> good afternoon, commissioners. i am here representing san francisco green party and the local grassroots organization. thankfully, you have a couple of different items that allow us to address what is coming up on item 12, which is an moa about desalination. i know that you got the document fairly late on monday, but keep in mind that the reason we made comments that late on desalination is -- commissioner vietor: is this -- we are on item 9 and 10 right now. >> it is part of the water program. it is recommended in the water program. i am hoping to elaborate on it. to speak to the issue of when the comment came to you, we did not know that this was an action item that was moving quickly

until your last meeting. the letter that you got has major environmental groups on a. we had two weeks to turn around, getting groups to sign on to that letter. that is why you are getting it on monday, because we need more warning in the first place that these things are coming up. that highlights the main point about all of this, for us to consider things like desalination for the water system, we need the public and environmental groups that have worked on water issues for decades to get full buy-in on the process of deciding even whether we're going to kick some money in to the study. specifically to the items you are covering now, what we need to do with our water system as far as preserving water and making sure that we've got enough is to not adopt aggressive technological strategies after the fact as a

systematic approach to dealing with water problems. we need to employ prevention. we need to do permeable pavement. we need to restore watersheds. we need to restore wetlands. we need to open up more open space so water does not drain immediately into the day but soaks into the landscape. we need rain bills. we need a lot of efficiency programs to be rolled out. i was glad to hear you mention jobs because building is going to create jobs for a few years, but if we were to aggressively go after san francisco's water use, pavement, the entire storage system, everyone's home, of grading how it uses water, that is what is going to create a boom in jobs -- upgrading everyone's home and how it uses water. you can buy energy or build in

your community, and it is building in the community that will create jobs. all of those things are what we need to focus on. the mayan civilization and others like it collapsed because of water problems. instead of trying to use preventative measures, they opted for new or an abrasive technologies, and a just cause more problems. now, the planet is doing the same thing, so we need to refer to preventative measures and not after the fact emergency measures. >> good afternoon, commissioners. i want to commend your staff on a very comprehensive water management plan. i always enjoy reading about san francisco's demand management measure. we have come a long way, and we

appreciate the opportunity to work with staff on some of this. i also liked the fact that the plan assumes that the cap will extend beyond 2018. i think that is a very prudent thing to do. i appreciate puc's involvement in the water utility client alliance and the commitment to doing more studies on how climate change will affect water supply. that will be very important. couple of things that i think could approve the plan of it -- it seems there is a place holder for the environmental enhancement surcharge. you might have to wait until the supervisors create the actual fund, but it seems those numbers could be incorporated into the plan. second, i think it would be helpful to have a little explanation on the pc's relationship to private water companies. especially since up to 7.4 additional mgd's will be

required for in-stream flows in the watershed. addressing what happens in times of drought. thank you for the opportunity to comment. again, my congratulations to your staff on a really fine job. commissioner vietor: thank you. >> i also want to compliment staff. they came to the citizens advisory committee and gave a presentation. i would like to thank julie for giving us that demonstration. i understand it is totally complete, a really great plan, but i hope the next plan will finally be able to find a yield to non-portable sources like rainwater harvesting and gray water and black water. that would be really great because we have been looking at these for years, and you are not going to have an accurate plan if we really do start doing a

lot more of those alternative supplies. we will have to figure out how to quantify it. the next thing is i am thrilled that you are part of the climb alliance, but the piece that you put on climate change and the urban water management plan i believe is word for word from the 2007 draft eir for the water system improvement program. it would be great if there was an update on that or you left it out altogether because it is kind of embarrassing. thank you. >> 3 comments. one, appreciate staff's work with us during the preparation of the document, incorporating changes toward the end, and also even this morning. ours was one of the comments that came in after 5:00 last night, and your staff was nice enough to incorporate several of those. we appreciate that. one item to note -- i am surprised that the prior speakers did not mention it -- in terms of drought cutbacks, it

shows that san franciscans will be able to get by with a 2% reduction during a significant drought. our experience has been in the past with the bay area is in crisis, everybody gets a little bit. this is mandatory drought. i suspect voluntary rationing would be called for in any event, but it might be worth noting, at least in a future plan. finally, with respect to questions and comments, i am not an attorney. i am not going to try to be an attorney today. i would say that one of your questions was -- are the wholesale customers going to rely upon your document for their future developments? i would say no, i cannot speak for each of them individually, but i would say no. almost regardless of what it would say. prior plan said you would meet demands until the year 2030. that is one of the reasons we need to continue to work

together and develop plans that they can rely on for the future. thank you. commissioner vietor: thank you. i think there were some excellent suggestions. i do not know if there is a way to amend or modify or inc. couple of them, the ones that sort of struck me. i noted that also on the climate change language, that it was dated, and there is a way to put some concurrent language on that, i think it would be appropriate. we do not know a lot more as far as did an science goes, but we do know a little more. it felt a little sparse to me, and i do not know if that is appropriate place to put the language, but that was something that struck me that i wanted to comment on. the urban water management plan seemed like it could use a more robust preface and intro.

this is one of the responsibilities, which is to update this regularly. i also thought that this non- potable question, not necessarily as it relates to this document, but perhaps for our strategic planning session, i think those yield figures would be helpful in helping us look at the portable versus non- portable sources to be able to meet those yield members -- portable -- potable versus non- potable. >> that has been a priority for staff now, working on all of the water sources we have and some of the potentially potable to try to quantify those. that is the single biggest question out there. we're doing work on that front as well as the policy front of

trying to work to prepare an ordinance that would apply to non-potable water supplies throughout the city. we have a number of things throughout the city under way. >> great. those would be my responses. i do not know about the drought language that mr. jensen was talking about and whether that means -- whether that needs to be more specific and robust. >> part of that language is included in the agreement. he is referring to what has already been agreed upon, but there's also a language where we will meet and confer on that language and see if there will be a modification, and that way, we have a modification to the contract. commissioner vietor: ok, so that is a separate conversation that is ongoing. >> if you look to the letter, they mentioned that they would recommend an alternative approach to the plan.

>> part of this is the urban water management plan. this is now june 2011. we have been given a six-month extension by the legislature when they passed legislation affecting water in general. we will be coming back to you in 2015, which means almost immediately, we are back on the water supply plane, once we have the information and have compiled and analyzed it. working with our wholesale customers, mr. jensen mention the water supply study they were doing. that is information that will be coming forward and affecting how we look at our urban water management plan's wholesale section in 2015, which we are really talking about. i would like to make one other comment. mr. brooks talk about a lot of different issues, but we did warn the bay area water stewards in 2004, and we have been meeting with them, and we have been very open. we have had these open

conversations about water supply, where our next increments of water would come from, so there are no real surprises. now, we're just further refining those issues as we move forward. all of these things were in the programmatic environmental impact report of different alternatives, and one of the things we will be working on is what are the alternatives if we are going to make a decision about post-2018? commissioner vietor: thank you. that is helpful. commissioner moran: a couple of commons -- one is on the retail side of things, i have spent some time working with staff, understanding kind of the limits of what we are doing on the conservation front. at first blush, the active conservation numbers look a little small. what i have learned in that process is one of the reasons that those numbers look small is that we have done an awful lot

through riding coats and enforcing codes, so we are getting significant results out of those activities, and they do not show up. i also was pushing to see whether there was a financial cut off that we had established. if you have 100 options, and you rank them by how much they cost, have we decided that we would not do 20% of them? the answer to that is no. we decided there may be one project that we cut because of financial considerations, but it sounds like that was really more for performance reasons. the plant that is in front of us -- the plan that is in front of us represents everything that we have identified as technically feasible irrespective of the unit costs, which is a pretty -- you know, that is a pretty

sign commitment. i just wanted to draw that out. finally, i wanted to return for a minute to the wholesale part of it. i fully appreciate the comfort that some derive from the fact that we have assumed in here that we will continue after 2018 with the same limitation that we currently have in place. i understand that is an assumption. i understand why it gives comfort to some folks. the difficulty is that it obscures how much work has to be done to make that possible, and if we were to make a different assumption, if we were to make an assumption that we would serve water above 184 mgd, to the extent that that was needed by our wholesale customers and was the best environmental

decision that that could make, then we would have a different picture. it would not show as being in balance in 2035. would show that there is a challenge that we have to meet, to either free up some supplies or to come up with some additional supply or reduce demand, and those challenges are very real, and they are out there, and i did not want to let this pass and have lulled into a sense that by 2025 -- 2035, things are just fine because that is an oversimplification of the amount of work that will have to be done between now and then. >> i think that is true about every water agency in the state of california. commissioner moran: we have something that is different. most water agencies note with their customers are. we have a significant uncertainty as to what our relationship will be to our wholesale customers after 2018. that puts in a level of uncertainty that most water

agencies do not have. >> absolutely, i think there's a section in here that calls out the uncertainties. both the ones that all water agencies face, plus the ones about our whole positions, and we have to deal with those. that is what we will be constantly pointing people to when we talk about this plan. in response to your suggestion that we make some edits to the plan, what i would offer to the commission is if you could approve the plan with the provider so that we will make changes in those sections, those are merely descriptive changes. they do not get at the numbers and the legal obligations. we could make some changes in that language to beat those sections up without changing the substance of it. staff would be happy to do that.

>> -- commissioner vietor: if there is no objection from the commission, is there a motion to adopt? >> we need two motions, 149 and 147 -- 1491410 -- one for nine and one for ten. commissioner vietor: why don't we take item 9 first, and that is the motion we will take now, and there has been a second. is there any public comment on item 9? hearing none, all those in favor? opposed? motion carries. now, we will take resolution on item 10. public comment? questions, comments? hearing none, all those in favor?

thank you. >> madame president, the next item, item 11, discussion and possible action to authorize the general manager of the san francisco public utilities commission to develop between the city and county of san francisco and parker said investors to support the park merced project -- parkmerced project. >> i will make a brief staff introduction. the mayor's office will be making a presentation. this is another development agreement he would have to assent to. unless treasure island, there are no easy dollars in this one -- unlike treasure island, there are no