utilities commission gets involved -- we are talking about getting more involved in an event for water for people coming up this may. we wanted to make sure the commission was aware of that. julie has been very involved in water for people. she is going to rwanda again to work on water issues. we wanted to do a brief update so you understand what the water for people group is. >> i am really thrilled about the opportunity to introduce you to water for people. the organization's mission to build a world where everyone has access to safe drinking water is something i'm very passionate about. so much so that i will be returning to africa as a

volunteer this coming month and i will be leading a team that will be designing a system for part of rwanda that only has 30% water coverage. what is most compelling to me is that capacity building model and overall approach. their focus is to divide up local and long lasting a sustainable solutions through education, technology, and partnership with local governments and communities. what i am really excited about is the puc wanting to raise awareness about water for people in san francisco and the bay area. as one of the leading water utilities in the country, we are uniquely positioned to bring attention to the water crisis in the world.

the puc will be hosting an event to take place at the california academy of science on may 7 with the goal of expanding support for the organization in the bay area. we will be launching what we call the of orlando challenge with the goal of providing 100% coverage in rwanda by the end of 2015. the event will take place the first day of national drinking water week. our participation here in this event will further solidify the leadership role to raise awareness about critical water in our everyday life. the mayor of the district to port -- who reports directly to the president of rwanda will be

at the event as one of our main speakers and our packet has more information about the work by water for people as well as the events taking place on may 7. we would ask for your support in partnering with us and water for people in making this event a successful one. i would love the opportunity to meet with some of you in the next couple of weeks to tell you more about the event and how you may be able to contribute to make this a successful event. >> are you familiar with president carter's effort in this arena? >> i am not sure what the name of the organization is -- >> it is the carter foundation and i know the president has been very supportive of this

effort and has created 26,000 new wells to avoid contact with a specific warm -- specific worm. >> at the gates foundation is also involved. sometimes the problem is we are all stepping over each other to try to do the right thing but not coordinate very well. >> another group is called blue planet that you might want to look into. >> i have heard of them. of money for the same issue. >> water is very popular in that part of the world. >> thank you very much.

>> did you see what time the event is on the seventh? >> i think we have a time. i want to say 6:00 or 6:30. >> that includes the general managers' report. moving on to item 17, -- >> a very brief report today because i know you are anxious to discuss the budget. i wanted to share with you a couple of things about our board meeting last week. mr. harrington was there and one of the things the board recognizes is the working relationship we have with the commission and there were not a lot of nice things ash said in both directions but i wanted to share with you. the second thing i wanted to note is that i gave the board a

long-range view of what will face us between now and 2035. in the near term, an issue we have started taking on his an item your staff proposed to us to consider which is refinancing some debt that in the current water supply agreement the agencies have to repay san francisco 4 old capitol that made. we have taken a look at that and i will share some of the remarks -- the first was that we are not in the bond issuing segment yet and this probably doesn't make any sense. we had our financial advisers take calls from numerous bankers who were calling us and sift through that and said this could

actually work and would be worthwhile to both san francisco and the group. we are looking at that and will be working with your staff closely on this. there are a lot of questions and concerns to look at before we will know if it is feasible. we appreciate the suggestion by your staff and the board was very interested and it could save a lot of money. any questions? thank you. >> during the discussion this afternoon, we will be talking about this as part of the budget. >> that brings us to the consent calendar. mr. secretary, would you call that? >> all items under the consent calendar is considered by the utilities commission and will be acted on by single vote of the commission. except work and construction

for water enterprise improvement program funded contract. approved modifications and the final increasing the contract amount and increasing the contract erasion an opera's final payment to the contractor. except work performed by madam -- by mountain cascade for water enterprise improvement program, san antonio pump station upgrade. increasing the contract with a time extension of 29 it consecutive calendar days and outcries final payment to the contractor. >> commissioners, does anyone want to remove either of the items from the consent calendar? if not, can i have a motion to approve? moved and seconded. public comment?

those in favor? those opposed? the motion carries. >> the next item is regular business item 19, a discussion of possible action to authorize the manager of the san francisco public utilities commission to enter an agreement to provide a liquidity facility authorized for wastewater enterprise commercial paper program with j.p. morgan and u.s. bank. >> good afternoon. i'm the assistant general manager and cfo. we visited in december about increasing our paper program in the waste water department from $150 million up to $300 million.

we discuss that commercial paper has been a very effective, low-cost savings tool for our ratepayers. before you today is half of that program's renewal because our current program is up for exploration. the packet is a very large with the bond financing documents. it is specifically summarizing the -- summarized on the slide number one on the of overhead projector. the program was authorized in 2006 and a bit 2007 agreement which expires next month. the renewal is before you today. they did go through a competitive process as they do with these large refinancing items. what is before you today is a

new program with j.p. morgan and u.s. bank for the $150 million. we are working with the board of supervisors and of that will be assuming the approval of that in the next few months. lots of agreements as part of your due diligence. they are standard and much like what you recently approved for the water program this fall. if i could reiterate why this is a good deal for ratepayers, the rate is going up a bit compared to five years ago when the market was a very low cost. the alternate t -- alternatives before us today is that this is still the best deal in today's market. the alternative to not doing this would be to issue bonds

earlier. if we were to have to issue $150 million of bonds, that would come with a total cost of anywhere between $9,000,000.9999999 dollars. -- between $9 million and $10 million. every single year by doing this type of diversified debt program, it is about $7 million to $8 million in savings for our sewer ratepayers. i'm happy to answer any questions. >> one question i have is the rate has gone up quite a bit. what kind of implications does that have for the other commercial paper programs we have?

>> of the renewal we did for the department last fall came in at 72.5 basis points. at that time, it was still very similar market conditions to where we are today. this is slightly better at 65 basis points per year. in the last two or three months, we have seen a tightening for our rate payers and we do monitor that and put these out to bid as we have as part of our debt policy to make sure we get the best deal we can for ratepayers. we want to be able to reward contracts of up to $150 million a year without having to sell bonds immediately. it is a tool that has served the

ratepayers well and we continue to monitor all of the trade and quarterly performance. >> what is our investment now in commercial paper? do we utilize that? >> we are the sellers of the commercial paper. >> are we ever in the purchaser's position? >> we are, as part of our pool contribution. we have money in the pool and part of that is invested in commercial papers. >> that gives us an opportunity to wait on going back to the marketplace. we look at how much cash we have for internal purposes and if we do not have enough cash for that type of project, we would sell commercial paper under this program is it is sewer-related

or under the water program. >> thank you. commissioners? >> we have a resolution in front of us to approve that program, can i get motion? >> so moved. >> moved and seconded. any discussion? any public comment? all those in favor? opposed? the motion carries. >> item 20. discussion and possible action to approve the terms and conditions and authorize the general manager of the san francisco public utilities commission and/or the director of property to execute a purchase and sale agreement in the amount of $1.3 million and any related documents to facilitate the purchase of a fee interest in that certain to under 59.32 acres of agricultural land identified as

assessor's parcel in the county of alameda. >> we had a little confusion appear, but i think we are straight now. >> and the division manager for natural resources and land management. we somehow neglected to include a map in your agenda packet. we have extra copies here for members of the public. this is the second acquisition we brought to you in the last few months. this is above san antonio reservoir. we hope to wring a few more of these during the course of the year. this is one of those cases where we prefer to have it in fees. the ones coming in the near future will be a mixture but will not involve us in terms of

the title or owner. i would be happy to answer any questions and want to acknowledge -- when i arrived almost six years ago, we did not have the capacity set up to it do this. it has taken a long time to get there but between the services and my staff and the city attorney's office, it has gotten to the point where we are running on all cylinders and are able to respond to all the people responsible for this. i would be happy to answer questions. >> >> the appropriate supervisors have been informed? >> we have been very public

about this. >> we have a joint agreement which the commission approved in the spring where we partner with the district and they are a key partner in our projects and the county keeps a close eye on things like this. >> what about the supervisors? >> i could contact them and i could talk to their staff but i have not talked to them in the last few weeks. >> what is the nature of this project? we are trying to do what we can to protect the watershed where most agencies do not on the land and the watershed. most of the land we own we purchased from the spring valley with everything else that came with it. >> this land will be held in sacrosanct in perpetuity?

>> yes. >> that is important to put in doubt. not many agencies make the effort to go out and protect the environment and land is so important and valuable, so i applaud these efforts? >> thank you very much. we feel the same way. >> commissioners? >> i love these projects. thank you for bringing them before us. >> and do i have a motion? moved and a second it. >> i know this seller, so i want to disclose that i know the seller, so i understand i don't have to recuse myself. >> as long as you can make a decision, a fair decision then that is not required to disclose, but it's a better

practice to put it on the record. >> thank you. public comment? it has been disclosed on the records and the minutes will reflect. >> two. added to the use of the property. that will be consistent with the land management policy which will come in due course. that is a good point that is raised that the legislative affairs gang, whenever there is something in alameda county, should keep them apprised whosever district is, they should know what we are doing out there. >> every county, the supervisors, they matter. mr. ramirez made reference to a

larger concept. is there some intent that i missed a few years back as part of the process? something we are attempting to purchase more property when it becomes available? is there some overall intent there we could make clear this is a piece of? it sounded like that but i was not clear. the guidance is provided a as a policy from the alameda watershed which predates my arrival to the commission and was adopted in 2000. as part of that document, it describes how we manage the land we already own and it also describes our efforts when people approach as to acquire

land when it's in our interest to protect it. what we are doing now is consistent with those documents and any land we would require falls under the guidelines and it is covered by the document. what we did recently is dedicated some bond funds to that and to stand ready when land came to us and proposed sellers came to us. this is a bond-fund project and is implementing the plan plan -- as you have heard me talk about in the past, it because it is the one area that is privately held, there is no older except for us. there is a handful of players and we are working with them. those are the folks that you will see in the coming months when we bring the projects to

your attention. >> member collection was $50 million? >> $20 million on the bond fund and then the investment over 10 years and now we are at your 6. >> thank you. any additional public comment? >> commissioners, i want to talk about three separate issues connected in three separate ways. it is always good for us to purchase land to protect our assets. in this case, the right thing was done. it i would suggest believe that area where we have our quarries, we do the same so that the after effects of our quarries do not

pollute our rivers. there is a connection there. if you read today's newspaper, there is an arctic there -- there is an article about a lake in the presidio called mountain lake. the spaniard's first came and that's where they got their water from. today, because actions like what we are discussing today were not taken, that lake, the lake that once sustained people for thousands of years is very polluted. some relief has been made, but once you create a cesspool, it is very difficult to bring it back to the pristine condition it was. it is always a pleasure to see

what we own board generations to come. a vision such as this where we take care of our assets. somehow, at just like some people you have heard, they're going to africa -- i was born in africa, so i am very sensitive to issues like that. i was born in nairobi, kenya and participated in a lot of lot of projects going on with water, etc. we here in california, especially san francisco, we cannot take for granted that week -- we have that hedge apache and we have at calaveras. -- what we have at hetch hetchy.

we are moving in the right direction. thank you very much. >> any additional public comment? we have a resolution in front of us. could i have a motion. >> so moved? -- so moved. >> all those in favor. opposed? the motion carries. let me suggest we take a brief five minute break and we will reconvene under the gavel of commissioner came for the budget hearing.

>> i would like to call to order the continuance of the last meeting for the budget. we don't have to do roll call. mr. general manager questor >> good afternoon, commissioners. we started on january 12 with discussions on water and waste water budget. today, the focus is on hetch hetchy and we would get a combined overview on that and we can talk about the water side and take care of the low countries and other distribution

efforts in terms of power. then, we thought we would go through any outstanding questions or issues from the wages -- the waste water items. we have some talking points for that and that we will go through the bureau's and business services and general managers bureau. the final vote on the february 14 meeting. so we will bring it back on february 14. >> today is a notable day for

one reason in particular. this will be the first time before you as a commission we have a balanced capital plan for hetch hetchy. we have a balanced proposed budget before you for the liberation it can change daily, but as of today, we have a balanced proposal to consider. we have heard a lot with discussions and deliberations over the degradation discussion. we had to balance the fort -- had to balance the shortfall in operating funds by year 10 of the prior year plan. in addition, we were short of