is pretty much what you would believe. we are all but broken back there. over the last few years our elections have come to be known as a wave of elections, with radical swings back and forth between who has been sent to washington. years ago there were 60 members of the democratic blue dog caucus. they are now down to 20. they are on their way to single- digit. we have the tea party in washington. they came to town, committed to everything that was said. they have noticed a change in the debate in washington. we have to give them credit. they are determined to make these changes. the result has been that we are all fiscal, all the time. we start of the budgetary analysis earlier this year.

holdovers from the previous congress. we went straight into the debt limit discussion. recently, we had another flare- up over issues to keep the government functioning. now i am on the so-called super- committee. deficit reduction by thanksgiving, or there will be a massive recession that takes place under spending levels, fairly well having consumed the agenda in washington. items that we could have worked on in the past, climate change or energy legislation, spending levels -- discretionary spending continues. funds are extremely scarce. there is more demand for them than ever. which is why i hope it makes the ocean side property so key in yesterday's suspicions.

but i think that meaningful financial support for the kinds of things we have seen in the past with other entities in the past will continue to diminish. it will be a very lean talk in that respect. of all of the leads we have had out here this week, they were extremely useful as we were about to reach the point where we would need to reach our professional representatives to make sure that they were aware of the status of that. certain things happen. we are about to reach a mid- stage crescendo and we will have to do outreach with delegation members. that is one of the discussions we have had. it has been extremely useful to be out here, from my standpoint. i would love the chance to

answer any questions you might have. >> commissioners? >> i want to make it clear that the tea party is not a populist movement. it was started by dick armey and funded by the insurance companies. what ever happened after that, i do not know. i find it absolutely ironic that the entire movement was based around objection to the obama health care plan, funded by the very people that would be regulated. to me that he party represents nothing more than a cup -- corporate elite, g grassroots movement. how did you enjoy that work? >> it was a fabulous job. it may be the best job i was ever going to have. the problem with those jobs is that you just burn out.

>> i understand. given the challenges that we face, what do you think about the challenges that this agency should be concerned about in the future? >> well, i think that don pedro was the key. those are fairly specific. this is so challenging to know what the agenda is going to be. there is a backlog of routine matters that are not being processed by the congress right now. every now and then, you get a little window. then you can get some of this stuff done. but for the most part, the system is dysfunctional. it has always been dysfunctional to some degree in my 30 years there, but the degree to which the cases have become

dysfunctional, and the cases themselves, to a certain extent. just stopping the most basic and routine functions. it is hard to know the way out. one of the great ironies is that 40% described themselves as independent. in last year's off-year elections, 18% were in the pet -- 18% voted for democrats. in the other year, it was 18% for the republicans. the result of that is that they see people in congress that are most like them. they hired out a moderate and independent thinking members of congress. as long as we are as heavily populated by the extremes, it

will continue to be a challenge. it is entirely possible that we are going to have everything teed up for a program spending. yet we will not be able to get the bill done. at oceanside, includingsomeone, fo, w>> thank you. >> welcome. >> thank you. >> i have a question for you. going forward, what do you see your role for us as being? >> the issues are increasingly less than straightforward.

if you could have witnessed the conversation that we had yesterday with the corps of engineers, it would have sounded like a foreign language to you. because we were so deep into the barrages budgetary elements and authorizations, things of that nature. the administration has handcuffed itself. i think that part of that is helping you work through that morass of procedural minutia. just trying to make a success on what is going on back there.

we said we were going to do a bunch of stuff, and knowing how to interpret that with what is real is a part of the role that we play. one of the things that we have done through the years, months of delegation numbers and key committee staff, if they have been raising your hecche fees, we know that we can deal with the issue. it allows your supporters in the congress to follow.

>> ok, commissioners. most of these matters come to us without warning. >> it is nice to see wall. >> other comment? or next item? >> i was going to take the general managers' report as a whole.

>> we have an update from ms. laponte. her parents are here today as well. welcome. >> they should be up front with her. [laughter] >> good afternoon, commissioners. >> for the benefit of your parents, for one i would like to say how badly they should know we are indebted to you. >> thank you very much. very kind of you. the timing was such that we were not able to give you quality reports since the last revised budget and scheduling program, so we thought it would be good to give you a brief update on what we have achieved encountered over the last few months. key milestones that we have achieved since mid-july, in

addition to advertising three smaller construction contracts, we issued a notice to proceed on two very important construction contracts that started construction as replacement contracts with one of the most significant milestone for this program. we were very excited that the commissioners were able to join us for the groundbreaking. during that time period, we also completed the construction phase of two projects. we will come back in front of you in early november. this is a summary of our cost variances, which were reported in fiscal year 2010-2011. since you have approved the

revised budget, we have had few variances. the largest one is the still valley treatment plant, improving the contingency for that project. i explained it to you at the time that we added additional costs associated through different cost categories. the biggest one was the differing site conditions. whenever you prove -- build improvements in a facility, that is a typical challenge. there is a small cost variance for the number for projects in which you have improved contingencies for. cost increases also refer to site conditions. mostly the need to build additional erosion protection in a quarry. discharged to the quarry, we have an agreement with the corey operator.

on the positive side, we reported significant cost savings in the project. things are being moved to management reserve. we also realize cost savings on to projects that are being completed. the university will moderate the project. it goes without saying that you will encounter your fair share of challenges. we are looking at minimizing the schedule impact as well as cost. the issues we have encountered in the field funnel into four different categories and that is typical of any large infrastructure project.

the issue of unforeseen conditions. whenever you have a project that has a lot of underground work, you have risks associated with the fact that you might encounter conditions that were not expected. you cannot perform these every two feet. you have a water treatment plant, the geology turned out to be different. there is also assumptions you need to make based on contamination, based on available data and preliminary assessments. whenever you work in a very urban industrialized tight area, you will run into contamination that was contaminated. the other situation that happens is when protected species find

their way to our project sites, that is not always easy to control. finally, whenever you do improvements on facilities that were built in the late 1800's, early 1900's, you don't always have the best records. we build our improvements based on what we believe the infrastructure is to be. the low or foundation of the dam was shown in the drawings. on the environmental side, the environmental requirements may change during the multiple year of the project. a good example is that you use storm management requirements that were imposed by the regional board last year which has impacted some of our contracts.

then, the documents and the missions. when you have the documents that total may be 1000 shrines, thousands of specifications, it is challenging to make sure that you cross check everything. there are references back-and- forth between those drawings and specifications. if there is a slight amount of issues with clarity and specificity, when there is issues like that, they always rule against the owner. it is always that the contractor is right. if the contract is not perfect, that can be an issue.

when we uncover existing utilities, we realize that some of the hour improvements might not be as good of a shape as they are. we should fix what needs to be fixed right away and the challenge is if you try to bring a different contractor, it might not be possible. there is times wynn additional work is minimal. those issues are coming up now more and more and we have a good management reserve and we still fall well within the original estimates. we need to stay on our toes in the larger projects which are starting to roll in and we will definitely see more of those types of challenges. some of the more challenging

projects are now well on their way. with that said, the dam will not be an easy project. to counterbalance that, there is a lot of great achievements. after a year of field work, as i mentioned last time, i started excavation of the bay tunnel. i attended a meeting which show the progress which had been performing as planned. we made the crossing under the pipeline which was a sensitive type of operation. i felt good about that. some workers safety issues regarding two of our tunnels, we took that feedback very seriously. we undertook a full assessment of the situation and took

immediate corrective action. the feedback is that they are very satisfied with how we have been responding. despite a number of field challenges. we have reached important milestones. we are starting the testing of the eastern segment and we also are well on our way to restore the right of way both on the east bay and the peninsula. we are doing extremely well on the systems shut down. we are up to 75 successful shutdowns without any major hiccups. also noteworthy is that we have a number of facilities where we have full use and that does

increase our systems reliability and operational systems. last week, we received an award for the 2011 civil engineering project of the year from the american society of civil engineers. i was extremely proud to receive the award. we had city staff who were supported by great consultants. today, we will be seeking your approval for the clothes out of the new crystal springs bypassed tunnel.

at the first meeting in october, we will ask your approval for increase contingency on the east bay's to segment. we encountered a number of unforeseen side conditions and we underestimated some of the work requirements. the bad news is that this contract, it is 95% complete and this is pretty much on schedule. the overall cost even when you count the change orders, this would be under the estimate for this work. for we will seek your approval for the clothes out of another project in the san joaquin region. that is all i have for you today. >> any questions? >> it very impressive.

it amazes me that we have all of these shutdowns without any problems. >> believe me, this is the highest risk on the program and i think the water and a price deserves all of the credit. >> thank you very much. "thank you. >> that concludes the general managers' report. >> any further comments? >> we have no speaker cards. >> the next item is the bay area ãsupply and conservation agency report. >> good afternoon. i do have comments on the general managers' report. first of all, let me follow up

on something that came up. the commissioner asked for copies of documents that i have referred to. you might have received those. i have those here and i should have given them to michael before. it is always a pleasure to see -- i find his reports informative and sobering. he spoke about the federal budget process. i learned how little discretion actually has. today was even more so in terms of the financial status and the challenges that people faced. i think that from our perspective, it is important

that you don't rely on federal funds and you are able to proceed. you have gotten all of the permits out of the way. we can only wish you good luck. with respect to the water system it improvement program, our board met last week. david briggs was there and had some comments about the shutdown schedule which is very encouraging. also the work he has done and his staff has done looking at the crossings of the pipeline in your system. his report was encouraging that. we are very encouraged with the risk. we are very encouraged with the containment. we had comments about the commission and your actions in

incorporating some of the recommendations. compliments to julie, ed, your entire staff. the member was quite pessimistic and did not quite think we would see this much under control. we have met with julie and i've talked about some refinements to the report. these are minor and they pale in comparison to the great work you are doing. thank you very much. >> are there any questions. >> i am attending the millbrae's city council meeting tonight and we are giving an update. >> are there any public comments? >> we have no speaker cards. >> next item. >> this will be the consent

calendar. all items listed are considered to be retained and will be acted upon by a single book. host -- by a single vote, a, approved the plan specifications and award wastewater enterprise, renewable replacement contracts. b, approved amendment number 22 water emprise, water system improvement program to execute this amendment and to extend the duration by six months with no change to the body of the agreement. does any commissioner wish to remove any item?

>> seeing no such request, do we have a motion? >> so moved. >> is any public comment? >> we have no speaker cards. >> ok, all those in favor. >> the next item is regular business. item 10, discussion and possible action to authorize the general manager of the san francisco public utilities commission to request approval from the board of supervisors to except and extend the public utilities commission share of the telephone department of public health grants funds. >> this is a pretty straightforward action to request the board of supervisors to except grant funds for a project already completed. >> moved and seconded.

is any public comment? >> we have no speaker cards. >> thank you. >> item 11, discussion and possible action to approve the terms and conditions to authorize the general manager to consent the existing right of way from sac, transferred a portion of san antonio centers leasehold rights to mgp ix properties. >> i am here to answer any questions you have. >> are there any questions? do we have a motion? >> so moved. >> second. >> moved and seconded. any public comment? >> we have no speaker cards.

>> did we have a discussion about the open space? this is the shopping area downtown. >> this is in the peninsula. >> is there a green space that is part of the development? >> this is a very narrow strip of land that will be used for access and landscaping? >> my concern is in general there will be a neat to have employees maintain the area unless each of the lease holders will parcel it out and the individual leaseholders take up that responsibi.