engage in strategies that you know our wise measures that are the smart thing to do. the other thing you can do is to develop better tools to make more specific decisions in the future. that is what your staff is working on. you need to step back and look at climate scenarios, look at temperatures. in much more sophisticated foundation for future making. we need to figure out how to operate the systems. i am simply your eye on this issue to urge you to move forward and i look forward to seeing this report when it is finalize. really, to continue to work with you and working with your staff on adaptation issues.

>> thank you. this is a great report. >> i am shocked on page 91. i've never seen a clear los angeles the like that. >> if you could provide a link to the secretary for this report so that we can include it in the minutes, that would be good. thank you. >> is it any other public comment? seeing none, would you call item 10. >> workshop and discussion presentation on repair replacement bowles agency wide. >> we are talking about the budget coming up. you should never expect to be the masters of every detail but

there are some overriding things that are happening in this budget. this will make a big difference in terms of how much money is spent and the rate impact of those decisions. the single biggest items is the level of speed with which we start to pick up our repair and replacement likes. we wanted to have our discussion today with you. >> thank you for that introduction. >> thank you. this is to talk about relative priorities. we would like to illustrate the water mains in san francisco and

really talk about what level do you want to start funding in terms of the replacements in san francisco and this has a direct effect and your budget. this will take rate increases. we're talking about three different programs, but the sioux were system replacement. the new system is spot stores. we have been doing in this in the past and we want to accelerate the program. just remind you once again that most of our water mains are small and we have about 1,200 miles. there are about 1,300 miles an streets in san francisco. almost every street has a water main on in it.

this is a graphic that mr. ritchie will be using on tuesday. we wanted to put it up there to show you that this is the area where you want to be. this would be a good repair or replacement rate. what we have our two proposed alternatives. with those alternatives, you can see a â. this will come to the same age at the same time and it will have an accelerated program. the source system, about 850 miles of sewers. the majority of them are less than 36 inches. there are large systems that are conveyance systems.

850 miles of stores in san francisco. an illustration showing among we do about 6 miles for you now. two different replacement rates. the big take away is that you have this increase in spending for several years. at 11 miles per year, you have this steady state of spending that you would have to have ongoing for a longer amount of time. this is the hidden story that we have. you have given us resources and we have used those too increase the miles of sewer inspection in san francisco. lo and behold, we find defects in the sewers. . we are doing about 150 miles of

sewer assessments in san francisco. we are on a six year cycle now of looking for all of our sewers and what condition they are arraigned. as we find these things that have to be fixed, we actually do fix them but we don't have enough money to fix all the spot repairs. >> what are the natures of the repairs? >> this could be one section of a sewer pipe. we are talking about several blocks long. these roughly average about $25,000 purses a block of sewer replacement. >> have you found that these are longer lasting? >> this is amazing what they're pretty resilient at this point and time but there is a program to keep doing this.

>> before you go beyond that slide, we dealt with a different curve and that was the age of the pipe and the assumption was that tribes that it old fail. in fact, they don't fail like they said, they fail may be a century later. this is unobserved defect -- this is donan observed defects. but the other tool is evaluated based on risk. -- >> the other tool is evaluating based on risk. have seen actual visual

inspections the changes the whole paradigm and that becomes part of the tool will we go on and say, well, we have visual defects rather than waiting for it to collapse in these little pot holes. in water main replacements, we have been looking at about 6 miles per year and we have been doing this through 2018. traditionally, we have cash funded water main replacements. we will move into 15 miles of water main replacements in san francisco. again, to get us into that great area, we are in the state of balance which would be a acceptable. it means that our annual service will rise in 2015 and the

average monthly bill will go up. the service will rise and 2022 because we have issued the bonds and the monthly bill will go up $6 and that includes those that you have had to conserve as rate increases. you can get a sense of the budget miles over the past several years and we will be going from 6 to 15. what this means is that you have cash verses that funding. if you consider this and this is part of your discussions are part of the budget, this would increase by $218 million and this would get you to $508 million. sioux were replacement goes along the same lines. you made a really wise decision in proving the resources to do the condition assessment.

we are moving into the 150 mile stage. we are looking at going from a capital plan to 15 miles per year. when the debt service is taken into consideration, the average monthly sioux were bill would go up by $2 in 2015 and again in 2020 to. you can see the 15-year increments going out over the 10-year. the increase is only 147 million on the suicide because you have a lot of cash their. this is over 10 years. this is the source spot repair. this is probably the first time we have ever seen this and this is something to follow along. we actually do sioux were spot

repairs. they are budgeted in the operating budget in the department of public works at $6 million per year. they take care of about 300 spot repairs in san francisco. we did an infusion of cash in fiscal year 2011-2012 to try to get down the backlog of spot repairs. but we are proposing as part of the long-term program is that we would actually fund $8 million a year of additional repairs for the next 10 years. our goal would be to actually get to about 700 or so repairs a year in san francisco. now i will throw in the confounding factor and that is the 2011 department of public works bond that was approved in november. this is a program managed by the

department of public works and what it will do is actually increase the amount of street restoration and paving in san francisco. they will go to 60 miles a year and that will continue for the next three years. there is a list of streets that will actually be restored or repaved over the next three years. they will be putting in ramps and also sidewalk improvements. some of the things you would like to see. we need to coordinate this with our repair and replacement program. this is one of the biggest cost that we have which is restoring the streets. this has gotten more restrictive. sometimes you have to restore the curve and that is a big thing that will cost us.

there is a lot of pressure for them and us to make sure that we are doing the same streets. this is a good thing for us. there are some trade-offs that you need to make. this does have this your rate impact as you would like to increase the amount of the main replacement. the question is cash verses debt funding. if you want to do with debt funding, there will be rate increases that you have to anticipate. that is where we left it. usually when you present the budget, each would present the budget on their capital program. thank you.

"we will be giving you more information and you can see some dollar amounts and the percentage of rate increases. >> thank you. i think what i would be interested in knowing is based on proposition be, is it $248 million? >> over three years. the decisions are being made i would assume almost immediately and i would be interested in knowing because you would like to prioritize. there would be a reason to start somewhere rather than somewhere else. i would like to know how that

would take placend how that is taking place and whether we have sufficient influence to try to guide the process or if there is some kind of bureaucratic issue that may be would be the subject matter of a conversation that took place in the future. can you develop on the decision making process as it relates to putting that money to work? >> there is a list of streets that they have laid out over the next three years. there is a city process that was involved in the discussion about how we coordinate. we set up the task force to sit down. we have been met once too hopefully come to a conclusion that we can coordinate our activities together.

we have the year one list that we want to do. we want to look at this your replacements. we're looking at their perspective. these look like we can coordinate on it. that discussion is going on. we can go back on how that is working and it really is a coordination effort. >> they have criteria and maps. >> should we assume that decisions that we are preparing to make it through the budget process would be contingent on, will we be directed? >> the department of public works will be doing the maps.

>> the real issue is that they will pay of those streets anyway. the issue is that if they are doing 60 miles, we try to get 6 miles done or will we get 12 done? they will do with or without us. >> if you were to improve the budget with the goal, and if we can have the cost paid for by the bond, we save that money and we can actually stretch the amount of miles. that is our ultimate goal. >> we have plenty that we can choose from. >> we have already kind of moved some things around. >> with respect -- which employees would be doing the paving? would this be employees of the

puc order at -- or would this be contract it out? >> this is a combination of the public works employees which would be the early people involved in it. there would be contracts out for the remainder. >> let's take a one block, for example. it is safe to assume that we would issue the contract and go through that process and then the later on top would be a separate contract. conceivably, we would save the money that we have to come up with to pave over those picks. >> in some cases, one contract for all of it. we have a working on that kind of thing where we issue one

contract and they do the underlying work and the repaving. >> this has been a policy for quite some time. if we have to take up the street, everyone should be working down in the trenches at the same time so there is not the cost of repeating. >> at the same time you want to accelerate your programs. >> the policy of working together, that is out there. the discussion about how do we catch up. we have had the discussion for many years. we have 900 miles of sewer mains.

they have a hundred your life. that is crazy. we had this discussion for water for years. we have started to make movements and getting smarter about replacements. also to be able to pick it up. really, how much are you willing to do to to get from 6 miles to 15? that is a big increase in street disruption and also a big increase. the idea of debt verses cash, typically if you are building a building. those that will for it over th. it makes perfect sense to issue the debt. people who benefit over 30 years get the results. every year, they will spend the money.

the assumption is that it will be an expense every single year. because we're in the situation we're in, we are already debt financing. will this be our new financing? will we want to get back into cash funding? those are part of the discussions we are looking at now. >> in terms of writing at the conclusion -- are writing -- in terms of arriving at the conclusion, the cost to us per mile is that much less over the course of the three years? >> the assumption in the city's plan is that this three-year bonding for the streets is also a bridge that during those three years we will identify a funding

source that will allow us to continue with that level of street repair for a longer time. those too not answer all of the questions about the street needs and the city but there has been no identified funding source. we're on the road to identify what that would be to keep that pace going. >> part of the challenge, as i recall, is that you have an age of sioux were out there and part of the problem is that be -- is that if we had installed these at a regular rate and replace them at a number of year it would make sense. -- part of the challenge, as i recall, is that you have the age of sewer out there. it really does put you into a thing that if you always put in the same amount, you would have

been replacing fairly young pipe for a while. as far as shaping our response to that, it looks as though we are doing a round up and we are hoping that there will be a ramp down. have looked at different approaches and seen what the cost impact is? for example, if you started out now with everything -- you know, it just went to 20 miles a year -- you know, that would be very expensive right now. what would that do to the total cost for life cycle cost? >> we have not run those sort of scenarios, but we can. i think what you're talking about is this big infusion over

five years, a really high rate of replacement. we can look at that. we can look at rate impacts, but a few years down the road, it creates the same problems you have again. >> the impact is what other factors are there? if suddenly they sunset was torn up for five years, that would not be the right answer, either, but i would like to know what the constraining factors are and whether this kind of response is the most effective and cost- effective. >> ok, we brought it to you today to get your thinking about it, and we will be talking about it more in the budget discussion. commissioner moran: thank you very much. public comment? ok, none? if you would call the next item. >> next item is item 11, discussion of possible action to

approve either pedestrian lighting policy number one, number two, or number three, and authorize the general manager of the san francisco public utilities commission to implement the pedestrian lighting policy. >> i am here in part today because the border supervisors recently adopted the better streets plan, which promotes the installation of pedestrian lighting in san francisco's streets. we are here in the interest of having you provide us with guidance on what our role should be in supporting the better streets plan. historically, there has been ambiguity in the charter and coat over the responsibility among city agencies for pedestrian writing. what i have before you today are three options. we recommend option 1, which would have the puc responsible for pedestrians lighting in city

streets. i can go through briefly for you the alternatives. i am putting a slide down, so if you could please. the first option, which is, as i say, the option that we recommend, is full responsibility on the part of the puc for lighting, where we would be responsible not only for providing the power, but also for the operation and maintenance of the lighting that is installed. policy two would have us have the latest catch, where we are only responsible for providing power -- the lightest touch. policy 3 would be a mix of the two. we would continue operating and

maintaining the lights currently on the street, but we would accept no future additional role on pedestrian lighting. under the second option where we would only be providing power, we will have to step back and unwind the responsibility for the 390 lights we currently have and find a new home agency for operations and maintenance of those lights. commissioner moran ask a question about the cost impacts of the three policy options. this slide gives you a sense of that. you can see with the 398 lights that we currently own, we are incurring a little over $24,000 a year in operations and maintenance costs. if we continue to have a role in

pedestrian lighting and maintenance operations, we anticipate after 10 years of that policy, that that $25,000 would increase to about $37,000. it is not a large cost burden. it strictly operations and maintenance. we expect the annual maintenance cost per like to go down as led lighting technologies are deployed in all the new pedestrian lighting applications. with policy one, it would be very clear that we are the agency you go to if you are a developer putting in a new residential condominium tower. we are the agency you go to to find out what is allowed in the streets for lighting. that means we control the energy efficiency. we control the overall look. it would be just another option in our streetlight catalog for what kind of pedestrian lining

would also be available to developers has the better streets program rolls out. with that abbreviated presentation, given all the material you have, i would be happy to answer any questions. commissioner moran: do you have the table in printed form? our screens are bouncing all over the place. >> i only have this one, which i am happy to hand to you is that is constructive for your conversation. commissioner moran: for clarification, up on the tv monitors -- >> mine is not. >> - ok. -- mind is ok.