i go into that, i should tell you that this project is now 45% complete. we're trying to rehab existing infrastructures. this makes it more difficult. basically, the four categories of changes are site conditions, and those fall into two subcategories, geotechnical. a different condition and what was in the bid documents. for example, there was a greater concentration in a number of areas on our side. there were also some discrepancies of what was on our drawings versus what reality was. sometimes, drawings do not reflect all of the conditions that are. we ran into some things that were not shown in any of the drawings, so those result in

changes. there were also, one of the biggest categories was scope additions. the water enterprise asked that we add a few scope items to the contract to address some immediate needs. when you get out in the field, and you start building new improvements, you find that some of the existing improvements that you thought were in good conditions are not in good condition, so the water enterprise, for example, asked us to rehabilitate some of the foundations on which the nine chemical tanks of the plant set. -- 6. we also realized that some of the chemical pipelines were leaking. these changes initiated by the client alabama $9.80 million, so what i want you -- initiated by the client add up to $9.80 million. on the $4.20 million need to come from our program management

reserves, now $167 million. the additional will be covered by the water enterprise as part of their capital improvement funds because these improvements that we will be building, some of them were already identified in their capital program. now, it is much easier, much more efficient, much more timely and effective to amend the existing contract to do that work, versus trying to get a separate contract group to come on site. when you have two different contractors trying to share that side, there are complications and also a timing issue. that is the reason why we are adding those into our contract. there were also environmental challenge encounters. we had nesting of protected birds that had to be removed. they delayed the project. and on all of our projects right now, we are encountering some of these challenges. these are recurring themes, and that is what i was going to

discuss in my overall presentation, where the conditions sometimes on site is different than what we had assumed. contamination shows up in some cases that was previously unknown. so this is how we came up with this additional cost. these costs include all of our change orders and trends and account for some of the project risks that we see out there for the remaining of the project. again, it will not change the entire cost of the program because we have a good reserve that is therefore a situation like this. with that, my job and the job of our team is to control these changes and make sure we finish with money left in the reserve, so these treatment facility projects are definitely some of our more challenging projects. president vietor: ok. this is a big dollar amounts again.

wsip. is there a motion to approve this item? commissioner: i will move. commissioner: i will second. president vietor: commission iran -- commissioner moran? commissioner moran: was this part of the initial? >> some of the costs associated with the chemical tanks, pipelines, as well as the foundation, were added later as a change. after the contract was awarded. vice president moran: the tanks were awarded?

>> i would need to verify that, commissioner. i believe that the tank replacement themselves were included in an addendum to the original contract, so they were bid as part of the original contract. now, there were additional items associated with that, like the mechanical and electrical work that were added to the existing contract. vice president moran: the reason i ask, and i will support the program, the request of scope changes are my least favorite, and i do believe in the process. you tend to get a better price, so if you have the foresight to say you are messing with this, you tend to get a better price than if you do not. the condition of the foundation, that may be a surprise. >> i fully agree with you, and i think to that extent, we want to bid out that work.

the costs and to put another bid package on the street may compensate for these big savings. vice president moran: as far as the original package. >> i agree. vice president moran: you cannot have two contractors. >> we went through a lot of discussion. it was not an easy thing. >> by the way, i do not approve those on my own. i bring them up to the team, and general manager ed harrington, we go over those. vice president moran: thank you. president vietor: so all of those in favor of moving item 13 for reproof opposed? secretary housh: there are no speaker cards on that item.

item number 14, a discussion and possible action to approve an increase to the preapproved 10% construction cost contingency for water enterprise, water system improvement program- funded construction contract number wd-2591, for a total contingency amount of under $4 million, and operas the general manager to consider and if appropriate approved modifications to the contract. >> we need to complete the work in a certain time because we are in the middle of a sensitive area. we also need to complete that work to make sure that they have flexibility with the use of the new improvements this season and not have to delay the whole thing one year. in order to keep on track schedules wise, we have to do

two ships. -- shifts. and we got a late start because of the very wet conditions. this is a job where we had to de-water the. downstream of the dam, and because of the very wet conditions, the construction starts had to be delayed because we were not able to de-water the area. this is one reason why we are running into some cost overruns there. and the volume of hazardous material that had to be removed and disposed of in a special landfill was much greater than what was assumed. what conditions were different as well then what some of the geotechnical investigation showed -- rock conditions were different. and this was a dam built in the

late 1800's, so the drawings may not be quite as accurate as they should be, and when we got out there and started digging, the foot of the dam was actually different than what were shown in the dry, so we had to make some adjustments for that. the project also encountered some environmental challenges. we had to relocate some fish twice, and they kept coming back, so that provided some additional challenges, as well, but i am very pleased with them on the job. this is a project that has been on the books for over 10 years, and i am going to be really pleased when it is all done, considering where it is relation to the san andreas fault. president vietor: is there a motion? commissioner: so moved. commissioner: 2nd. president vietor: some comments.

commissioner moran, and i am sure it was a fiercely debated at the management level. >> we did not have as many owner-initiated changes. the situation was an appeal. president vietor: right, right. commissioner caen: you have stated here to authorize the general managing to consider and if appropriate to approve. is that not a little wishy- washy? i would like to know the numbers as opposed to "if appropriate." >> the way it works, because you're in construction, decisions need to be made very qckly because of the standby cost a lot of times, the way we work it is whenever we go over the 10% contingency, all of these additional change orders need to get funneled through the

general manager, which normally they would not, so that is kind of what that language states. basically by approving these agenda items, you are intrusting the general manager in making a judgment on whether he feels these change orders are justifiable, up to the limit that is sent into this agenda item, and in the agenda item, we describe what the area of these changes are. commissioner: you are asking us to go up to that amount but not to pay. >> yes. president vietor: all of those in favor? opposed? next item. secretary housh: there is a minor change to the one that was issued. this is for an amount not to exceed $6,400,000 plus with the soul, responsible, and

responsive bidder, yerba buena engineering and construction inc., or any qualified contractor, and upon successful, approve the plan and specifications, and award water and a prize water system improvement program, habitat reserve program, homestead pond, san andreas reservoir wegmans, and adobe go to grasslands, in an amount not to exceed -- to perform wetlands compensation. to adopt findings in the environmental quality act, including statements and overriding considerations. >> this is several that will be awarded. this is for mitigation for the wsip. the challenge there is to find enough qualified and interested contractors to bid on these

jobs. and we did have a successful bidder. since it was a sole bidder, we negotiated down by about half a million dollars, and i am hoping that future contracts will have a little more interest, so i think we will talk with our contract group and see how we can actually achieve that. we do now have this successful, and commissioner, i am not sure you have been notified, but we have changed the agenda item. it is a pretty straightforward item, actually. commissioner: it seems that since this is -- that even though there is only one bidder, this will continue to be a competitive field. >> if we find a contractor who can get the funding requirements met, and they do very good work,

it could be that the same contractor does a lot of these, and i would have no problem with that. president vietor: all of those in favor of -- i am sorry. all of those in favor of item 15? a second? commissioner moran? questions and comments? all of those in favor? aye? opposed? unanimously, it passes. next item, please. secretary housh: the next item is are closed session. >> we do not need one today. we were going to be looking at our new police liaison. one man has been brought back to the department. he is now the police liaison. we can have that happen some other day. president vietor: thanks. so if there are no further items?

secretary housh: is there any additional new business? >> just one item. you have this on your desk. there was an article posted last week on our stearnes program. it was a very good article. i just wanted to make sure you were aware of it. 110 at risk youth. it is a great program. president vietor: yes, we loved the project. thank you publicly. they are not here. for their continued good work and efforts. any other business? commission business? any other comment? hearing none, the meeting is adjourned. [gavel] captioned by the national captioning instit