if there is an interest. the market is rebounding, but at this point they cannot identify market demand. the financial market, the movies, whoever they are reaching out to. that is the uncertainty. this amendment will be annually reviewed. the $500,000 estimate was our estimate so that we could address the budget issue. if they get $100,000, they get a significant number of complaints. so, that trigger is available. saying look, we are not happy with the revenue that we got and we will love do this anymore. supervisor chu: supervisor kim: jig -- supervisor kim: is this

amendment for one year? >> we were initially told that they would have to pull the system from this amendment on an annual basis. that is what the amendment would be. anywhere from one year to three years. supervisor chu: to clarify, it would last for the duration and every year of that provision? in one year the board has the ability to say -- never mind? >> correct. supervisor chu: we opened and closed public comment already on this item. lots, colleagues? -- fox, colleagues? -- thoughts, colleagues?

supervisor kim: i am not thrilled with this amendment, but i am willing to move forward. we have had a series of agreements and contracts come to the budget committee. really, they have been getting more challenging each time. we have tried to support the next one, and the next one. i would somewhat hesitantly support this again. if we are not reaching additional revenue, that it would then consider not continuing for the last two years, moving forward with this today. we want to keep pushing on the mta to be a stronger negotiator for the city and the budget. supervisor chu: thank you.

on this item i would echo the comments from supervisor cam. my first reaction was -- another one of these contracts. we have to evaluate it to see if we want to renegotiate. understanding that the budget already anticipated half of a million dollars for this, i would not be thrilled to add more to the budget item without knowing more. but i can pass this along with the knowledge that it is a three-year agreement with one- year options to exit from it. i hope that the mta will reevaluate and if there is an opportunity to renegotiate, knowing that we will do so aggressively. on a larger message about

bringing contracts forward to the board, as the supervisor said, it becomes harder and harder to agree to contracts that do not seem to be as advantageous. i know that there are changes occurring at the mta, but we want to make note of that as i do not know that this board and committee can continue to approve contracts. fat >> thank you, supervisors. we hear you loud and clear. supervisor chu: we have a motion to send it forward with recommendation. supervisor mirkarimi: what about without recommendation? supervisor kim: i can do that. supervisor chu: we have a motion to send this forward without recommendation and we will do that without objection. thank you. item number six, please. >> item #6. resolution approving and authorizing the general manager

of the san francisco public utilities commission to execute sewer system improvement program-funded agreement no. cs-165, program management services, with aecom-parsons joint venture, for an amount not to exceed $150,000,000 with a term of up to 15 years, under charter section 9.118. supervisor chu: thank you. for this item we have the public utilities commission. >> good morning, supervisors. as you may know, the puc is embarking on a water system improvement program, $4.6 million. another program that we would like to give you more details about, the improvement program for $7 billion. i would like to invite the program director to give me an overview and talk about the item before you.

thank you. >> good morning, supervisors. firstly, i would like to commend the budget analysts for their thorough analysis of this contract. we appreciate the solid endorsement, recommending approval of the contract. it is very critical to us. it will be assisted by the program management contract when it is upgraded. i thought that i could take a few minutes to give you an overview m. some highlights. if the i.t. folks could bring up the slide. before that, i want to remind you that the last capital improvement work was the clean water program, planned in the 1970's. that did not compensate for the challenges that we have today.

12 years ago, when we were planning the water supply improvement program, it was contemplated that waste water capital improvements would be included. many critical improvements are needed urgently. i will walk through some of the details with you. basically, our first improvement program was constructed in the 1800's, leaving assets that are over 120 years old, operating in the ground. two of our largest treatment plants are located in residential neighborhoods. they are utilizing 1940's technology. on the west side of the city we have the ocean side that has been in service 24/7 for the

last 10 years. recently we have taken over operation of the treasure island treatment plant build back in the 60's. on an average day there are 77 rain gallons. during wet weather we handle storm dowland's as well. there are numerous issues for the system. seismic, aging infrastructure, and new issues with green infrastructure. climate change is also presenting challenges for us. rising sea levels and infiltration. flooding, odors, noise, and stabilization rates are a big issue for the public. we want to have opportunities to enhance things for the public. with a brief overview on the level of service endorsed by the

commission last july, this will be the guiding principle for regulatory compliance. flooding provides benefits to impacted communities and modification of the system for climate change, including economic stability. briefly, i want to overview the technical improvements that have been identified. there are approximately 20. we have systems to improve flooding screening in san francisco, better managing the eight watersheds in the city. we have improvements at each of the city's treatment plants. as well as infrastructure to meet disposal requirements. additionally, infrastructure has not been updated since the earthquake and it has failed since then. i want to highlight a few of the

projects you will be seeing over the next six months. the first is the bay bridge improvement project surrounded by central shops and water department yards. we have neighbors directly across the street. one of our most key projects is the new bio-solid strategy facility. you can see tend circles. one does not have a roof. it collapsed and failed. recently we lost another. if that continues, we will no longer be able to meet regulatory requirements. the facility is located 20 feet from homes and businesses. they complain of older issues and visual impacts. we will be replacing the facility with a brand new

facility, placing things much further from the public. another contract that you will be seeing is the central bayside improvement project, taking a look at the channel bass and in the city, looking at ways to improve storm water in the city. currently it is subject to flooding and other challenges. to be able to capture storm water and use that for groundwater recharge. how we are going to do that throughout the city is we are going to look at each of the drainage basins inside of san francisco, utilizing and urban water framework approach that will utilize values for alternatives for storm water management to maximize the amount of water that can be treated at the treatment

plants, including sales and permanent pavement, as well as what we call great infrastructure, including storage. we want to take advantage of opportunities where it is going to work to recharge ground water basins for non-portable supplies. supervisor chu: going back, what is the distinction between the green area and a lighter green area? >> id is a ridge line separating the city from north to south. if it falls on the right of that line [no audio] the ridge line is the dark line in the middle that separates typography. if it falls on the right, it will drain into the bay.

on the left it will end up in the pacific ocean. we have three basins on the west side, five basins on the east side. you can also see on their the historic creep, which is historic. that is a lot of the reason why we have some opportunities for daylight increase. taking advantage of the currents of storm water moving out of the system. there are programs that have been developed by staff to respond to the levels of service selected by the commission. $6.9 billion, including collections system projects. the timeline for the program, each project it's in the program by planning, the timeline is

currently a plus in terms of the joint projects being completed. what we really need is validation on the cost and delivery mechanism for the schedule for the boat -- for the program. we really appreciate the budget ellis -- budget analysts help in learning about the improvement program and capturing the key elements in the report before you. supervisor chu: thank you. mr. rose? >> members of the committee, this was recommended by the pec based on a competitive process.

$10 million per year for a 15 year term. payments will be administered on a test basis. table two, page 5 of our report, provides a breakdown of the budget. the bulk of that would be labor. $134 million. an average hourly rate of $206.30 for an estimated 36,000 hours. the puc estimates the cost at issuing commercial paper on page 6 of our report, a $150 million principal and $159 million in total cost of $340.2 million

based on an annual interest rate of 5.5%. in terms of the impact on a single-family residence on the bottom of page 6, the average impact would be $1.74. that would be on the monthly bill. we recommend that you approve this resolution. supervisor chu: thank you. with regards to the project, i understand the project still has major components outstanding that we are working on? but that in the cycle we should be seeing those projects coming to completion fairly soon? average case, puc wrapping up on the projects. i would imagine that it is never

cheap to renovate and fixed sewer lines. and what we think the project might cost overall, it is something that this contract will help but you see refined further. >> the reason for firing the manager is to define the rate impact. we believe that we can keep rate impacts to a single digit. we would be bringing each project as they are being implemented. the implementation phase is usually about three years in start-ups, looking at the option

to deliver products to the voters and system. let's -- supervisor chu: in terms of this specific contract, the project is the anticipated to be paid for with commercial paper. will be retired with later that, later -- more debt later on? >> that would be serving bonds through the appropriated process. supervisor chu: let's open this public -- this item for public comment. members that wish to comment on item number six? seeing no one, the item is closed. we have a motion to send the item forward with recommendations.

item number seven, please. >> item number 7. resolution approving, in accordance with section 147(f) of the internal revenue code, the issuance and sale of tax- exempt bonds by the california municipal finance authority in an aggregate principal amount not to exceed $11,000,000 to finance various capital facilities owned or leased by children's day school. supervisor chu: thank you very much. >> good morning. we are here before you to approve the issuance of bonds for purposes of federal tax law issuance. the public being financed, including acquisition of property at 605-601 delores'

street. as you mentioned, the director of finance obligations is available, should you have any questions on the process. supervisor chu: body, would you like to say few words? let's thank you. we are expanding. the program is growing. we need additional facilities. this would allow us to have a satellite campus. supervisor chu: general expansion of space. this item does not have a budget analyst report because there is no fiscal impact on the city. we would not be liable for any payments associated with this item. let's open this up for public comment. would any members of the public wish to speak? seeing no one, public comment is

closed. we have a motion to send this item out with a recommendation to the full board. item number eight, please. >> item #8. ordinance amending the an francisco administrative code, section 18.13.1 to limit the overtime worked in any fiscal year by any employee to 20% of regularly scheduled hours and requiring monthly written reports regarding critical staffing shortages. supervisor chu: this item was before the budget and finance committee last week. there was a suggestion to amend the legislation to allow for some clean up. i believe that the supervisors representative is here. >> thank you, supervisors. you are correct, in the last week we have been working

closely with the comptroller's office on the amendments that all in your hands and then added to code for 14 annual reports. as we discussed with the controller in many cases, these reports provide redundant and overlapping information to and do not make recommendations to mitigate spending. the proposed changes moved to more rational reporting requirements to get to the goal that i mentioned. specifically, and i have copies for the public, this changes have a comptroller views costs and projections. the new annual reporting requirement would be instituted

to have significantly more analysis and recommendation in the board. making better recommendations to manage them. the president suggests that these amendments be stopped. supervisor kim: is there anything that -- supervisor chu: is there anything you would add? >> only that we appreciate the willingness to work with us on simplification rules that have grown up over many years and we think will lead to better reporting on how many years are being spent and how many to litigate. supervisor chu: i do none of the dhr folks are here to provide

more information? >> brought to my knowledge, no. so, i did not know if he was going to be here for that. let's open this up for public comment. item #8. seeing no one, public comment is close. supervisor mirkarimi: motion to except and move forward. supervisor chu: we have a motion to send this forward with the recommendation. i will be supportive, in the last meeting, in terms that whether or not it will reduce the general level over time, i am not convinced that it will. this will spread over a large number of employees.

it does not change the conditions on which partners are entering overtime. i would be comfortable -- do you think that his measure in the office, second of all spreading out over a larger number of city employees, i hope that people do not have the expectation that just because this passes we will see a significantly large reduction in overtime next year. and there will be over time for the city with the recommendation. we can do that without a rejection.

we are one to take a quick break before heading on to item number nine. we are a two person committee right now. we cannot leave without losing forum. we are going to take a quick break. we will be right back.