the redline copy in the folder, paragraph three, just a clarification that shows a significant a larger change in clarifying the understanding of what was said. following public comment and after additional comment, the commissioners address for wholesale customers through 2018 and beyond, there was recognition that the relationship with wholesale customers was contractual and long-term supply issues would have to be dealt with under the terms of a large supply agreement. customers represented by the bay area water supply and conservation agency, under an agreement as to how the short and long-term water supply needs can be met.

this changes the post from the vice-president. >> thank you. this was a less formal meeting than most. we were struggling to put together something. if there are any other thoughts on that? and if not, i have a motion and a second. commissioner for me? all of those in favor? >> aye. >> the minutes of the september 13 regular meeting. any comments? >> ok. i have a motion to approve. >> second. >> those in favor? >> aye. >> unanimous. mr. secretary? >> item #four.

public comments. members of the public may address the commission on matters that are within the commission's jurisdiction and are not on today's agenda. >> do we have any public comments? next item, please. >> the next item is communications. letter summary options and print summary is available for public review, as requested by the commission. items held under written report, this is the time to bring those matters up as well. >> commissioners, anything that you would like to comment or question? >> yes. we all received the letter on september 14, from the russian group association regarding the reservoir.

>> the reservoir in question is down on bay street. we have not used it for a number of years. if you drive by it, it appears to be a part. if you drive down the street where the cable cars are, you can see that because the reservoir is not being used anymore, we have had discussions for years about what to do with it. typically supervisors in the area would like it to be turned into some kind of a park. we do need some kind of value of of it. we got the letter and will send a response to all of the commissioners. >> thank you. >> that is up for discussion at some point. >> at a number of points with of this commission, you will see the discussion as part of the land use policy, and the times that -- the kinds of views.

i think that what the neighbors are looking for right now is a fairly quick fix to a roof that they considered dangerous and unsightly. what i would just like to comment on the living management -- >> i would just like to comment on the living management program. it was compelling and the kind of thing that helps to make sense of those comments. >> that was mr. ritchie. >> next item. >> the next item would be -- pardon me. other commission business. we have a certificate of recognition.

please read the recognition. mr. moses de los reyes, if he could come forward to be recognized. he is the general manager small firm advisory committee, honoring him for his distinguished public service in years of civic leadership. driving changes to increase leadership in regional water system construction. >> it is here? >> perhaps there is a twist in the communication? [laughter] >> thank you.

many things regarding your service as well. >> any other new business? commissioners? >> the next item is the report of the general manager. >> before we start, just an announcement. in april we will receive a request for $25 million in state grants to fund the department of wildlife resources. particularly to help to fund the cesar chavez management improvement. you may have noticed that staff has recommended that. the director will have that on friday to make that decision. we expect to receive that decision before too long. a very good, large size grant from the agency. it tends to go to smaller, rural agencies with violations, so that is a good thing.

next, we have our federal lobbyist legislative outlook. did you want to introduce the topic? our assistant general manager, julie ellis. >> good afternoon, commissioners. historically we have brought our federal lobbyists and state lobbyists to the commission to pretty much in role in basic for you all about focusing priorities on the behalf of the federal and state level. many of you have not had the opportunity to meet our federal lobbyists, they're owen. today would be a great chance to show what he can do at the national level with regards to priorities. as a kind of introductory meeting with him.

i look forward to the opportunity. i have had a chance to work with him for the last two days. darryl and his team have gone deep into water with power, beginning to take priority for the upcoming years. >> thank you. thank you, commissioners. i am joined today by adam ingles. he joined a couple of years ago. this is the first time that we have requested the commission at the same time. he is a welcome addition to the team. it was suggested that i give you a short history of the relationship here as to why you have federal lobbyists. getting down to some more

specific issues back in washington. in the mid-1980's, when i was still running for u.s. senate, puc was negotiating a new power contract. one of the district went to the local congressman and got a provision for an appropriations bill that would have adversely affected our ability to charge for power. when i left it the senate in 1990, the commission was in a crisis proceeding at the irrigation district. the motion was that it would be useful to have someone prevent that from occurring in the context of a license procedure. initially it was a protective measure. licensing procedures proceeded

just fine. results quite well. in 1994, remember, newt gingrich and the contract with america. there was a proposal to raise the fee to 25 million. motivated mostly by antipathy toward san francisco more than anything else. it pops up periodically it in the second term. it is an issue that we are constantly monitoring back in washington to make sure that it does not get out of hand. it was more of an aggressive posture, more than anything else. in recent years we have become more entrepreneurial. more advocates. several years back we had a

vision that allowed us to adopt a permanent office with various agencies that were engaged in processing, the theory being that rebuilding the last of this vital piece of infrastructure, while operational, we could not afford to fall behind. we could not afford to miss states as everything had to be so carefully sequenced. from what i have been told, it has been operated well and has been very useful as a model that congress and others are increasingly choosing to follow. the trip out here over the last few days has been extremely useful. the enterprise apartment has got together with local, state, and federal lobbyists to make sure

that we are all communicating with each other and not missing opportunities to pursue the agenda of the commission. we had a very useful meeting with the corps of engineers. we have been working with them for a couple of years. as you know, they have suffered some pretty serious erosion out there as a result of winter storms. we are working towards each repel -- replenishment program in this environment, and it is pretty tricky. you can no longer do your marks. we have had to work on a problematic level in order to get the project past. we have lucky -- we are lucky to have gotten out. it was very meaningful to be with them for a couple of hours yesterday going forward. as far as watching right now, it

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.