at get something from september 13 and the urban agriculture project. i wanted to encourage you to look at the letter as we look at valuation of those projects. the other item that was an opportunity to bid for a consultant worked. $1.5 million of a project that is going to civil service. in any of it -- any event, there may be an opportunity to partner with the department of the environment folks. i do not know that what happened or if it is the best solution,

but it is an opportunity for the departments to work something out and i hope that that might happen. i wanted to call that your attention. in terms of good news, there is some likelihood that i will be appointed to the full pucac and i will be able to serve you in that capacity as well. state to done that. >> more work. >> ok. >> you get more pay? >> it will double my salary from zero. more in a bit. [laughter] >> public comment. >> there are no speaker cards. >> moving on to communications, does the commission have any comments or questions on the items distributed as part of the package? is there any public comment on communications? seeing none, the next item is

other commission business. do we have other commission business? i see none. mr. harrington, the report of the general manager. >> we have two items on the counter -- on the calendar. before that, the first update, as you recall in december we adopted a new power rates for the departments of city -- departments of the city and county of san francisco. no one at the board has asked for a hearing or any other action on those items. if nothing else surprising happens in the next couple of days, those will be accepted. second, you may have heard a variety of things about candlestick park in terms of power. to be clear, the outside of candlestick park is handled by pg&e. the inside is handled by the

recreation and park department. since we had some problems with the last football game out there, barbara and her folks have been helpful in trying to work with everyone in the commission. the mayor asked the fire chief and me to put together a plan. we did that. pg&e has done a lot of reworking of the lines. we did a test between christmas and new year's. we did another test yesterday. everything is working well in up to speed. there should be no problems for this saturday game. again, our involvement is helping to see that it works for everyone. >> bill a commissioner be allowed to go? -- will the commissioner be allowed to go? [laughter] >> we may have some people at the boxes outside of the park. to see if they do anything.

but that is possibly the worst place to see the game. third issue, we have included a shutdown of the system. for the last couple of years we have been shutting it down in january for 30 to 45 days when usage is lower. the shutdown was supposed to be finished over the last couple of days, but when it came back up we had a gate problem. so, we have postponed the return until this saturday. it has taken a few days to get the gate up and running on a temporary basis. it is a gate valve that opens and closes. water is now flowing in should get here by saturday and should be fine. other than that, the next item is the water system program update.

>> good afternoon, commissioners. happy new year. i would like to start today's conversation with an update on the november 25 pipeline failure. this is the event was reported on at the last meeting. as you recall, we had independent commission review of the incident. it was performed by a reputable failure analysis firm. they've provided us with their findings on december 19. they concluded that the pipeline failure was due to insufficient restraint in a bolted coupling that misused in a service connection to the city of south san francisco. it was essentially a design error that was performed by the puc engineers. the report also identified two other contributing factors that

may have contributed to a lesser extent. we have been diligently following up in taking the necessary steps to ensure the quality of our internal designs. from this point on, all calculations will need to be reviewed by senior engineering staff. we met with moscow last week to discuss the findings of the report and the steps being taken. we are going to give the city council of the city of south san francisco an update tomorrow evening. on the overall progress and

trends for the program with construction activities picking up in the next few months, will soon reach the peak of construction. in general, i am really pleased with our progress. there are two projects in the region with cost trends indicating potential needs for additional funding. those will be the water treatment plant projects. unforeseen side conditions at of project sites, as well as scope changes at the treatment plants are the main reasons for these additional costs. i will keep you updated on the costs of these projects in upcoming reports. we have some very good news to report. since i last presented to you in september, we have reached substantial completion on the construction of two projects. we are also on track to reach

final completion on the eastern bay division pipeline in february. the reason why this is important to note is that this is the last local project to transition into risk -- construction. in my last update i mention significant challenges with the new irvington tunnel. there is no question that these challenges remain, but things are looking up at the moment. we are currently achieving constant production rates using three, not for headings. we are also being -- we are also keeping up with intrusion.

as i mentioned before, we are seeing is some of the most challenging round condition experts that the industry has seen. -- ground conditions that experts have seen in this industry. the bay tunnel boring machine is achieving production rates that are equal or exceed what was planned. we are working on a proposal with a contractor to reduce the size of the construction shack on the east side of the tunnel, -- shaft on the east side of the tunnel, which would result in potentially lower costs and less of an impact on the environment. that concludes my presentation. >> commissioners, any questions?

>> we apparently have three more weeks to go. it will be an important milestone. once we are under water, the risks will go up. >> i was trying to think of how to approach an issue and i appreciate your thinking on it now or later. this commission and staff spent a lot of time putting in place project management systems. this was in preparation for the program. we are now at the stage when those systems are being exercised. when stuff goes bump in the night. for those that have not been involved in that process, and perhaps some commissioners with certain members of the public have as well, but now is the time when something happens when

you scratch your head and say -- could that have been prevented? is the response of vigorous enough and thorough enough? i think that it might be worth a brief update, at some point, as to how staff deals with that kind of issue. perhaps using a case example of what happened, how does that react back to the original bid documents. just to talk us through that so that we and the public can understand what the process is and the intention being paid to that. >> a case study. >> if you find a rich case, that could be a good way to do it. you may have to invent one.

>> i can think of a few already. >> that certainly has the truth element to it. >> we will put it on the events calendar. thank you. >> mr. harrington? >> the second item, commissioner, you may want to introduce as part of the discussion about policy review to the budget. >> i will let todd make the presentation first. i will jump in and make comments after that. >> good afternoon, todd. -- afternoon. my name is todd. as we get ready to move into the next budget season, and i know you have received your package, u.s. to meet to review and summarize the key policies that you already have in place and hold staff accountable for

implementing. you also wanted to look at a couple of additional ones this year, including a race policy. the package before you is relatively thick, but there are only four slides that will be new materials to you. i will point those out quickly. the key policy areas that you already have as part of the puc budget are the environmental laws, community, and justice policies. we will point out some of the key areas that we put those policies in to practice. you also look at further land 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 ne