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 responsibility. there will be a need to maintain the area. that is what i am getting at. >> these require maintenance of the area and the sublease has the most modern form of sublease in the city attorney's office and it requires all of the prevailing wage requirements under section 24.22.

>> can you direct me to a number within the file that refers to that prevailing wage provision? >> section 24.22, wages and working conditions. this was not in your packet because this is a different matter.

>> we had a discussion about our desire to recognize that there is a particular wage rate for this type of work, landscaping, horticulture. my concern is that the prevailing wage that is on file at the department of industrial relations might not cover the type of work we have covered here with specific wage rate. that goes outside of our city boundaries. my concern is that we kind of missed an opportunity to find the leaseholder to an appropriate wage for that work.

i don't have the benefit of seeing the actual number, the actual rate of pay for the actual work that needs to be bid out or completed. >> none of them have the actual number. >> is that the admin code? >> that is a section of the sublease. >> we would be happy to bring back that information at the

next meeting. you will not see absolute dollar amounts but obviously they change all of the time. >> there is a reference in the document to the prevailing wage rate. the problem is, is the work that will be done accurately reflected in that document? i know what the prevailing wage rate is. i have not had the opportunity to take a hard look at the plan. i am interested in figuring out what your language points to add the commission.

>> this is crafted by the city attorney's office for ultimate flexibility for each lease and sublease. we're happy to supply this supporting detail that you will require but i cannot believe that any lease or sublease in the city and county will draw down to the landscaping model. >> let's bring it back to you. >> this is absolutely appropriate for you to make every effort to provide language that gives you the greatest flexibility. i would not dispute that. that is appropriate for me to make every effort. >> without objections. we will continue that until the next meeting. >> thank you.

>> we have no speaker cards and this item. shall we proceed to the next item? >> yes, please. >> item 12, discussion and possible action to except work for water enterprise, water system improvement contract, the new crystal springs bypass tunnel, increase the contract and authorize final payment. >> commissioners, good afternoon. i don't have a formal presentation but i want to highlight the fact that this project has been incredibly successful and completed on time and with only 3.1% contingency for a pretty large tunnel project. i just wanted to highlight that fact. >> we are very pleased with that outcome.

>> i have a motion. do i have a second? >> second. >> thank you, public comment. >> we have no speaker cards. >> thank you, next item. >> item 13, discussion and possible action to authorize the general manager to execute a memorandum of agreement with the east bay municipal utility district, contra costa water district, santa clara valley water district, and alameda flood control and water conservation district, a four site analysis to further study the feasibility of a bay area regional desalinization project. >> if you could bring out the slides, please. we are here to talk about san francisco participation in the

project. i want to go over why we are doing this. first, we talked about the strategic planning. this is a supply shortfall which includes our in streamflow requirements and this is the result of a couple of all listed projects. we have a great degree of uncertainty about certain aspects of the water supply. will there be other projects that we are not able to complete? will there be a regulatory hit that we have to deal with. we can have an array of options before the commission decides what to do about the future supply. desalinization is one of those options. there is a limited number of supply options. none of them are cheap and none of them are ready to implement. we have a full array of information and hand.

in this case, the regional partnership spreads the cost across several agencies. during any project, this will still require an environmental review. some questions remain to be answered. i will review a little bit of the project history here and start by who are the partners and who could benefit. the participants are shown here on the map. the history of the project is back to 2003.

there was a pilot study performed in 2010. we work with staff among the agencies to try to flesh out institutional issues that need to be dealt with. we are looking at a site specific studies to help give us the information and make a decision on. each one of those stars represents when it was before the commission as an individual item. we have also identified this in broader manners. this has been going on since 2003. we would like to make a decision as to whether this is worth pursuing or not. there is a quick summary of the costs. the total costs have been about

$2.3 million. half of which was from a grant from the department of water resources. our partners have contributed $183,000. this is roughly equivalent to the amount of dollars that we have contributed. going back into the history, the feasibility study was to identify project objectives, goals, for each agency. we have identified among the agencies 22 potential sites and it goes down to 13th feasible sides and we ended up with three sites to be evaluated. one near the east and the bridge, one on the ocean side of san francisco. the feasibility studies, we

identified conveyance options or how we can move water around. this is based on reliability, public this happens, and public acceptance of cost. we have shared about 50% of those costs. during the pilot study, we determined that the plant was technically viable. reconstructed a private society -- facility for the water intake. we found some have been varied quite a bit. this was actually cheaper to the salt water in that brackish area rather than ocean water. we found reverse osmosis had the greatest water recovery which is basically treating the water twice.

we also found that this is on the edge of the delta sell out there was some that were found to be frozen during the spring part of the year and we have to be concerned if we continue with the project. during the last couple of years, we've looked at institutional issues among the agencies. we have incorporated the agency and concluded that the ocean side was not really viable for consideration as a regional project. san francisco might want to consider that for its own needs. there are water rights limitations. we have looked back at different demands and this is 14 million gallons per day. we had looked at 70 million gallons a day, but we are

getting closer to reality. that would be up to 9 million gallons for san francisco. up to 6 million gallons in dry years, when other agencies have needs. we determine 1900 dollars per acre foot for santa clara valley water district. we also looked at the cost of moving water through various distribution systems to get them to san francisco and santa clara. we are looking at sites pacific studies between 2011 and 2013. that would consist of four components. one is hydraulic modeling of the east bay system, the key to moving the water through. in effect, they would take desalinated water from the east contra costa site and move it

through their system, either to zone 7, our system, or both. it would move on that way. finding out how other system would accomplish this, and the costs and issues, would be important. secondly, water quality modeling, hydrological modeling in the delta, to make sure we understand how this project would fit with everything else. are there unreserved problems we will have to deal with, or can we take water at the time we think we could without having in a -- having an effect on bell resources? finally, with greenhouse gas production -- could we reduce the carbon footprint of a desalination site? we are aware that our energy intensive. a key thing we have been keeping our eye on is membrane technology, the key to the future.

we are trying to make it more viable and bring energy use down more. membranes have not yet made it a slam dunk. last but not least, public and regulatory outreach is where we are going to meet with members of the public, as well as regulatory agencies, to go through what we are learning in terms of the studies and where we may go. we have estimated our staff time component would be about 340 hours, about $35,000, on top of the cash cost which would contribute about $200,000. those dollars add up to roughly a million dollars of expenditure. on the left of the slide, we have a diagram of the public outrage plan, which in the case of san francisco and the west beirut -- we have identified three public meetings. one would be later this winter

to go through detailed scientific studies. about a year from now, we would meet to go over what we are finding it preliminarily, the information coming out. finally, in meeting to report what we found from various studies, we would prepare to move forward with a recommendation one way or the other four condition action. we expect to meet with six to 10 agencies to solicit their planning concerns. within the last month, we have met with two groups -- the bay area water stewards on august 24. about 20 folks were there, representing different environmental groups. and bawsca, to discuss the concerns we had and this presentation to talk about the regional desalination project. on august 29, we met with a

water task force to review the same information so they were informed as we could make them, based on what we know now. we are recommending again that we go forward with this study. we think it will provide useful information in a timely fashion that can allow the commission to make a good decision on the project. i would be happy to answer any questions. >> under the memorandum of agreement that is in our materials, specifically page 3, where you outline the responsibility of various agencies, what is going to be the proposed organization? is this going to be a regional authority? to go forward with this project, we would need to have either a memorandum of understanding with the agencies, or a contract, or a jpa would be a possibility.

>> a joint powers agreement, but none of those exist yet. >> correct. >> once you determine the responsibilities of the agency, will they be coordinated to reflect proportional representation, or will it be equal representation from all agencies? >> participating in the study is right now -- my expectation personally has been at the end there will be less than five. there may be two or three. there may be only one. >> those are three agencies. they can override san francisco concerns? >> we have not explored how that might work out. we could set it up where there has to be unanimous agreement. >> sort of like the budget committee in congress now, which will never receive agreement. >> that is right. >> that is my concern when we start to establish regional agencies that combine the political interests of four

distinct areas, or three. you will run into serious problems as to who controls the water, and whether we will be able to access the 5 billion -- the 9 billion gallons we are thinking of accessing. i know that is in the future, but i want to lay the foundation that those are serious concerns in terms of a regional authority and the impact on ratepayers in san francisco. will we be subject to the political whims of the east bay, contra costa, or santa clara as a result? >> that would be the nature of the agreement we would have to make come up with the protections we need. >> right. when you are looking at the criteria to determine next steps -- you are asking us to approve the $200,000 to move forward with other regions. how much is santa clara providing? >> $200,000.

>> it is an equal share. >> yes. >> what is the criteria you will use -- you are the expert. what is the criteria on whether we move forward after we have expended the $200,000? >> at that time, we will have gathered information of other possible water supply options, including conservation, recycled water, and ground water, water transfers. that is the universe we are talking about. we would try to arrange those in a way where we are comparing apples to apples and enabling the commission to make the best decision, which could be to pursue one or more of those different options. >> i hate to do this to you because i would hate it to be done to me to speculate. in terms of the carbon footprint, how much of a priority is that going to be in

determining criteria acceptability? >> we talked about strategic planning. we need to find our best tools to analyze on this basis how we want to move forward. in the environmental side of things, the that could count very highly. >> that is my question. how are you going to weigh the various elements of the criteria? will one have more weight than the other? it is carbon footprint more important than whether we get the 9 million gallons per day? is it more important, the regional agreement on cost? i am proposing that because these are questions that need to be addressed. i know the environmental community are concerned about this as well. i do also. >> i agree. that is where the strategic planning discussion was, identifying that staff have a lot of work ahead of them to figure out how we are going to

make those things useful decision making tools so we can say carbon footprint is more important than what might appear to be a cheap source of water, because even the cheap sources have things we find unacceptable. >> i accept the professionalism of our staff, but do you think it is necessary to hire outside consultants that may give us a broader view of what we are talking about? >> i think it is a combination of things. we know a lot. we also find from time to time it is useful to have help to sharpen the view. >> are there similar to such adventures in the united states, where this regional approach is being proposed? >> if you went around the country, you would find every possible combination as people grapple. >> is it possible for staff to give us a comparable analysis in terms of criteria they came up with, how they waited carbon

footprint versus accessibility versus price? for me, political dimensions are important as you involve other districts that may not have a common interest. >> i think that is doable. i mentioned that we are in california and see ourselves clearly. right now, texas is going through a horrendous drought. they are doing things they never imagined they would be doing before. there is a lot of talk about direct local reuse and recycle water. whether the last two years and the coming years have changed the dynamic completely -- >> we do not even know the impact of the british petroleum blast on water resources. >> these are all challenging things. the jet stream -- texas could be california next year. all these things will be different from each other, but we can provide that information and gain insight into how other

folks have grappled with the same questions. >> have you made a preliminary heat -- a preliminary determination of the most successful desalination plants in the world? >> there are staff from other agencies here who might provide that. i do not know if i would call it most successful, but the most obvious is the middle east. energy is relatively cheap and water is scarce. from their point of view, it is a big success. >> i am sure it has been subsidized by the saudis. i wanted to point out there is more we could afford to do. >> absolutely. commissioner caen: i think you could point out also that we have done other activities with other water districts in concert. this is not unique. we have worked with different district. >> that is correct.

in this case, the connection to east bay municipal utility district was a pipeline designed for emergency uses. if we wanted to make it permanent connection, we would have to review the changing purpose of that project. we have successfully built a connection. 10 years ago, people would not have thought that would happen. the same with santa clara. we have connections. those ties are what have allowed us to make it through these shut down periods, where we could call on water from other agencies to help us. it has gone the other way as well. we have developed a strong collaborative relationship that included plumbing and moving water. commissioner courtney: thank you, mr. ritchie. i am glad you brought up texas. that was helpful for me, because i did not want to