>> 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 get into a discussion about the merits of desalinization. but when this came before us for the first time, the most recent time, there were three of us

here. i was uncomfortable with the public concern of lack of opportunity to weigh in and that this out -- and vet this out. my concern was there was not sufficient opportunity for members of our public to engage us in the merits of even having the study continue. given the resolution, and in particular whereas no. 3, which i think is significantly exhaustive -- and then with respect to the description of the agreement at no. 4, the item you place for our consideration regarding public outrage -- the then commissioner -- ad then -- and then commissioner torres's comments about prioritizing -- i

wondered whether we could consider the flexibility in terms of the approach with the public. i wondered whether we would give the public an opportunity, through these engagements, to maybe tell us what their priorities were, depending on who showed up. house staff decides to -- how staff decides to collate and present that data may weigh heavily on our decisions. for me, it has been months since it was raised that time. i feel comfortable with the language, as long as there is enough flexibility given to the members of our public to try to put something together for us to try to digest. >> i think that opportunity will be there. vice president moran: just a

comment -- the issue of how you balance things off. in our retreat, the area of discussion where we made the least progress and exposed perhaps the biggest challenge to ourselves was the consideration of the bottom line, and how we do this. the discussion we had was not sufficient to figure out how we deal with that. i think that is an item we need to deal with in a bunch of product -- a bunch of projects, whether that is reclamation or water supply, specifically desalination, and the clean water program. there are a variety of areas where the basic question of how we process information and make trade-offs is key. that is something we will wrestle with over the next few months. >> for your information, we have a meeting scheduled with all the internal staff from different parts of the puc to talk about bottom line efforts, and any

consultants that we have brought together to find how we do that and how consistent this is, which seems to be the best way to move forward. we are trying to work on that by the time we get back to budget discussions, so we can further talk about what we see as options. there is no perfect way. it really is whatever way our customers or stakeholders can make the easiest decision using that information. we are working on that. president vietor: thank you. one last point i would make that was mentioned in the water supply memo -- there is not a study to quantify the amount of storm water and rain water we could turn into usable supply in san francisco. that would be another important piece to deal with. that hopefully will be a time

line that could be relevant early to mid next year. >> that memo was helpful. it demonstrated that desalination is not the most expensive option by far, which is probably counter intuitive. but it is important nonetheless. any other questions or comments? public comment. >> we have a number of speaker cards. the first would be -- it looks like ms. corwan, then mr. wong, mr. abdullah, mr. brooks. >> good afternoon, commissioners. my name is hassan abdulla. i work for the east bay m.u.d.

i have been project manager for the last few years. we have been studying this project since 2003. san francisco has been one of the original partners. now we have five partners. we are trying to figure out whether desalination is an appropriate water supply option for the region. this has been a truly regional cooperation, a cooperative effort. our vision for the project is to lower environmental effects and project costs by implementing two ideas. first, we want a centralized facility, instead of each agency doing their own desalination at their own facility. we would like one central facility that serves all five, or several agencies. that reduces the footprint. second, our agencies have assets

that exist. some are fully utilized. others are not. we would like to maximize utilization to see if we can help neighboring agencies implement this project. this project has been recognized by the state and federal government. we have received $1.20 million through the state through crop 50 funds. in the last two phases we did, feasibility and pilot test, the state-funded 50% of the work. the rest was shared by the four agencies. what this shows is that for each agency, just by contributing 12.5% of the total project cost, are at the table for studying desalination. this cooperative project allows this cooperative project allows us to leverage our dollar