use policies, raise policies, and ratepayer accountability policies, says the be wisely used the ratepayer accountability moneys. i documented some of the key things that i've heard from you in staff. it is to help to guide in particular the budget priorities in the findings, providing context for budget hearings -- so that we can come to meet with you in prison changes in the budget and you can see how they fit in reconciled to your policy, and then help the rate payers, as well as letting the public know that we are attempting to ensure stewardship. this helps us to align thinking, as well as budget deliberations, as well as helping to display when we meet with the bond oversight committee and the citizens advisory committee and others. the next several slides summarize those key budget policies, of which there are a

number. i will just highlight a couple money to slide. the key ordinances', charter section, as well as in some cases the california constitution and government code. debt law is present as well. a policy that we adhere to it with requirements under the charter section, as well as the debt management policy did you have elevated as one of the commission adopted policies. the other keep out -- a key policy -- the other key policy is the environmental justice and community benefit policy. adjusted in 2009 and 2011. but we discussed in december, as well as previously, is the race policy. we are currently responsible to adhering to the san francisco charter, the rates provision

under the voter adopted mandate in 2002. we are as well subject to the california government code, another proposition in the public works code. however, that may not go far enough. you may want to consider further action. as we discussed in december, behind page 11, you may want to consider further adoption. the commissioner comments regarding stakeholder input, we have met with the bond oversight committee in we are meeting with the rate fairness board this friday for their review. we are scheduling with the citizens advisory committee as well to have that input. we are also reaching out and will continue to do so with our customers for an important

customer and put, which we would like. -- for important customer input, which we would like. this is a topic that has come up in how well we communicate what we do and how well we do it. earlier it was our comprehensive manual finance report. you have seen the popular annual finance report. we took many of the good works of other institutions and we tried to put that and still that into information that is easily usable by our stakeholders and ratepayers. however, there may be a possibility and opportunity for the commission to elevate that category of policy study to a policy adopted by the commission, if you would like that. i have a patch for your consideration to the presentation of possible topics for ratepayer accountability. the next steps would be to

discuss it today what you would like staff to do as far as existing policy and further development of new policy. we are open to hearing additional requests that we would like you to report on next thursday, or this coming thursday, in the budget areas regarding existing or proposed policies. i have a number of attachments that i will not go through. they are here for your review. if i may ask the commission in commission president for further direction. >> thank you. >> several things come out of it. i thought it was useful, as we get into the budget process, but that it controls what we do. we are not free agents. a lot of what we do, we do not incorporate free agents, we hire according to the purchaser. we implement policy as law.

so, a good deal of what we do is basically, we are writing the check for things that were promised some time ago. i think that that is important to recognize. there were two things in particular that i wanted to focus on, however. they are part and parcel of laying increasing focus on the next time that we go out with a rate package request. that will be in about two years. we are three years into a five- year rate announcement. in two years we will have to go out and do that again. that request, by the projections we have had in prior meetings, of the be significant. it would not surprise me if there was some push back on that. if there was questioning by the people of san francisco, and our wholesale customers as well,

that after five years of rate increases -- and it is actually more than that, because we increase them before the last ordinance, when is it going to end? i can hear that. having already purchased it? why is this going on? at one point, we will need to explain that. i think it will be a challenge to do that. if we have reasons for increasing the costs of things, if we have the stuff that is water related that was not in there that we will have to fund, there is the entire sewer system program. that will actually have an impact on ratepayers five times what we have had in san francisco. it is huge. i want to make sure that two years from now we are well- positioned to explain ourselves. to demonstrate why we deserve the trust of the park -- the people as they give us their rates. part of that is the policy that they have in place that we can

work with. the one that we spent the last time with is the race policy that was in front of us a couple of weeks ago. we have a new version of that in front of you today. i would hope that at the end of the budget process, we would adopt that rate policy at the same time that the rates support. the one that you have not seen before, and there is a lot of paper in there, but the ratepayer accountability policy, which desperately needs a new name. while that is an intriguing concept, i think it is backward from what we really need to do. they need to hold us accountable. we need to make assurances to them, if we are going to spend their money properly. this is an outline at the moment and it needs a lot of

work. it may not be something to be in dubai that time we pass the budget. it may be something that we need to flesh out over the next couple of months. but the notion being that when people give us their hard-earned money to do a job, we have two obligations. one, do the job. two, spend the money as if it were our own. we need to have policies and a track record in place to say that we are treating their money as a trust. and that we are being frugal in the way that we spend it. that is what is being aimed at. any comments that you or the public have now, i would be glad to hear. i know that but -- people do listen to this on television. i would urge them to mail any comments that have to the secretary of the commission. but that is something that i know we are going to need to focus on in the weeks and months ahead. scott, thank you for the presentation. commissioners, any thoughts,

comments, or suggestions? >> i guess i just have a question. you asked us a question about providing guidance. maybe you could be more specific on what might be helpful? >> one of the areas of guidance was the rate policy. i know that it was true that we were asked to bring back a rate policy that is addressed in your binder today. we will continue to solicit input from ratepayers and provide that information back to you, as well as a proposed policy by late january, early february. in addition to that, there are other overarching policies for accountability to ratepayers. commissioner, one that i know you talked about in the past was a fleet vehicle replacement policy. while our budget has included the migration and replacement of all of our vehicles with green vehicles for any new replacements, we have not ever

given that staff management perfect -- procedure and elevated it to make commission adopted a policy. that is one example to the degree that he wanted to see in this budget hearing cycle when on the 26 we address fleet operations. we would be happy to work with you in the general manager to do that. there are a number of areas where as we get ready for 2014 in we are discussing with our customers what the necessary rate changes are related to capital investment, how we message that and how we let ratepayers' know we are officially sending -- spending their resources, will benefit everybody. and if you look in your binder, three pages after the end of the slide show, it is the beginning of a draft of the kinds of

things that could be in there. it starts off with accountability and then it has grouping. categories for personnel management and fleets, with workplace environments. in the past we have been fairly loose with calling things that we do internally policies and calling the things that we adopt policies. part of this was adopting our own internal things and serving the word policy for things that were adopted by the commission. what we can do is come back to you as part of the budget and save you should realize that this budget is in full compliance with the replacement policy except for these questions. they said that this was the plan that we had that we thought was a good plan and it is the kind of a need. as you look at that page in those kinds of things, as you see areas where we spend money and are collecting revenue, where you think it would be good

to have a policy statement about how we do it, giving us the kind of feedback would allow us to flesh it out more. >> thank you for that. i have a couple of suggestions in reading this that i did not see. one of them was -- and i do not know if it should be under the vehicle section or the work environment, but something about encouraging public transit for employees. i think that that would be good to have in there as a sort of transit first city. so they can relate to our other -- i did have a bigger question on how it related to other city policies. i wanted to make sure that there was a beast of reference to it. i am looking at this through my green lens, here, but around computing device disposal, with the size of the staff, there is probably a lot of waste generated. especially with technology. does it make sense to have some

kind of the sustainable disposal policy? i had one other suggestion as well. under budget law and policy, i think that these exist. sorry. it is the title. >> that is also the summary of existing policies. >> i thought that we added november of 2002. i do not know if that was an amendment, or the democrats that was voter approval on the right requirement from the rate fairness board, as well as the oversight board. >> maybe it is somewhere else, but it had to do with this kind of water retention program. i do not know what you call it. keeping water out of the system to avoid costly treatment, water quality, preservation. seems like it should be under that. if it is not, maybe there is another place where it appears,

so that we are from back -- proactive. >> i am guessing that it was not high on someone's list in 2002, but it does that mean to be cannot have separate policies for that. >> maybe it will be integrated into some of the language, just keeping out front and center with what the goals are. from an environmental quality perspective. >> i think that we are going to have some experimentation as we go forward and develop these policies. our policies are an odd collection of things. the last time that i've looked through them, they were things that were in response to something of a wrong. to look like you were doing something to pass the policy and move on, it was a very hodgepodge group of stuff. not a systematic approach to what this commission cares about.

there is definitely go for that. i do not think that we want to take department told directions and adopt them as commission policy. i would hope the commission policies would be much higher level than that, much more generic descriptions. i would also hope that there is, for something like the ratepayer accountability policy, that there would be something that could be audited by a third party. our direction to staff is that we want you to be tightfisted. we want someone to come in and say who they are. how we structure that, i am not entirely clear. part of the genesis of this is, as we look at -- there is just a mind-boggling amount of information coming out of the budget. huge. try as we might, and i have done budgets for a long time.

as much time as we have to give it, we will never really have control over the detail of what is in the budget. we can pick out things that look bad and act on those, but as far as this group of five people having mastery of that document, it will never happen. we have to have other ways of doing it. we cannot do it at the detail level. it has to be at the level of providing direction and holding people accountable. this is an attempt to move in that direction and be less concerned with whether the trucks we are by are blue or white, less concerned with that and more concerned with whether we analyze those purchases on a life cycle cost basis. my guess is that we are going to do some experimentation as we go forward. it is important to start it, because in two years we will

have to stand and deliver to the ratepayers. but >> i lost you a little. you are saying, not to get to micro? >> yes. >> but i think it is an important niche in an important thing to buy green. >> when he said blue or white, he was referring to the color of the vehicles. >> of. [laughter] -- oh. [laughter] >> water department vehicles, fired a bargain vehicles, blue, red -- fire department vehicles, blue than red. >> with logos. what's [laughter] a couple of -- [laughter] >> a couple of years ago we did adopt a vehicle policy regarding replacement? >> i have tried to dusted off. we talked about it three years ago at the camp -- at the

chair's request. in those three years, we have never elevated it again. our practice has been three years and 100,000 miles. in some cases, we have exceeded that i as far as having even more -- older vehicles with higher moloch -- higher mileage. in a small number of places we have reviewed them to make sure that they are green and electric. since then, the mayor's office have come out -- has come out with a number of different announcements. so, the policy does exist from back then. >> was there not a clean air program that we had? >> there are a number of them.

the healthy air and clean transportation ordinance. shelling what it would take to comply with those reductions. >> to your point, where there are these existing policies that we can make sure are being enforced and complied with. >> the way that it was described as good. making sure that they're being complied with or not, and if they're not, why? maybe it is an implementation. at least that way we know where they are. within the rate policy there is a provision for compliance saying basically we should raise rates to support budgets that are complying with law and policy. a more complete version of that

would be proposed. any other thoughts or comments? this would be before us during the bi hope that we can get a py to the hat is ready for adoption. the ratepayer assurances policy, perhaps that will take longer. but i look forward to working with you on that as well. >> that includes my report. >> public comment on the general managers' report? >> let me just comment on the rates policy. i think that now would be a good time to start out with -- context from my perspective. several years back, probably 2005 or so, when

[unintelligible] was the finance director for a time. she wanted to pull together these policies for a comprehensive set. there was not the time or organizational capacity existing then to do this. i am glad that this project is actually coming to fruition. it is good and we are all sorts of appreciative that we are at that point. particularly with reference to transparency, i would add a reference to the popular annual transparency report. this is not a great document. not all the apartments do an annual report, not all departments doing good annual report. this commission does a great annual report. that is part of the public accountability. i would reference it there in transparency. some of the other points that

you talked about, i would add compliance. each department probably has to do one now. probably another thing that we are compliant with. maybe the mayor's executive directive as it relates to things like fleet topics. another thing that i would add, maybe it is affordability, it is a little bit of discussion about nexis and proportionality as it relates to prop 218. seven different classes of customers are not cross- subsidizing other classes of customers and they are in fact earning their fair share. we do that anyways, but it is a good place to have reference to that. i will continue to share them with my budget finder on thursday. i do have some homework to read between now and then. thank you.

>> mr. jensen bella >> thank you. first of all, i would like to congratulate the commission in the staff for taking this on. this is unnecessary exercise. it is not an exercise, it is just government. a couple of comments, from our perspective, the commission has in joint one decade is spending on the waterside in terms of spending from 10 years ago. that was adopted in you are welded do it now. they know that there is a limit to spending. you have seen that. we have certainly seen that already. it may account for the decrease water use. but we are not in this yet. as i think about that, i think about your budget process.

it is massive and difficult to bore into regarding detailed policy guidelines. one thing that would be valuable, if you could make it work, there is one thing that you can use in trade offs. it is difficult in a budget this size. you have a lot of different direction that you are pulling out. i would not advise abandoning progress. there are things, historical costs that are probably low priority in advancing these things into the future. the green issues, environmental issues, and so forth, if people were not willing to have a vision, the difficult thing is that when your resources are

limited, i do the think that any of us will have that courage at the state and federal level. on the waterside they've least agreed to do that for 10 years. somehow your budgeting process is going to have to reconcile. >> thank you. any other public comment? thank you. mr. secretary, please call the consent calendar. >> all matters listed hereunder under a consent calendar are considered to be routine by the san francisco public utilities commission, and will be acted upon by a single vote of the commission. the ratification of the

declaration of the emergency made by the general manager of san francisco public utility commissions regarding the division yard. b, the approval of the plans and specifications and awarding of wastewater enterprise, renewal and replacement program, funded to the department of public works pavement renovation program. c, amendment no. 1 to the water enterprise, water system improvement program. d, approve the amended to water enterprise fund agreement with a grid 1 solutions to extend the turnkey installation. and authorize the general manager of the san francisco public utilities commission to execute the contract modification. we have no speaker cards on any

of these items. >> second. >> moved. >> public comments? any discussion? those in favor? >> aye. >> opposed? the motion carries. >> mr. president, the next item will be the regular business calendar, beginning with an update presentation. >> as you will recall, we have had several discussions over the years. it was asked to be brought back to us on a regular basis for what was going on in the industry and regular science. we asked for the update on this discussion today. >> before i set the timer, is five minutes enough for you? >> i do not know how to answer that question.

yes. is there a time of your have in front of you bin laden >> -- in for the view? >> yes. >> would you like us to bring the timer before you? >> yes. this is in the first slide and the final stages of review in production. i am also going to put this report in the context of overall climate change work. i will put it in the context of framing climate change in general. with this study, we did a couple of key things. we calibrated a model and created a tool that models the way that the watershed will respond to the precipitation that we will see as a result. we successfully calibrated at in

the analysis. this is a sensitivity analysis. meaning beyond looking at the sensitivity in the reservoir to changes in temperature and precipitation. what would happen in the watershed with these kinds of changes that were detailed in the outline of the memo. key conclusions are nearing what other providers are finding in this level of analysis. rupp runoff declined, but one was the most serious. snow storage has declined significantly later in the century. the bigger distribution of runoff will shift, moving earlier than what we saw today. finally, temperature increases alone will have an effect. there is a re