in both procedures. >> if you look at the guidelines, they are pretty much -- taken a and break it. it is a very operational sort of thing. the reason we are coming to you for your blessings is because it involves charging fees and delegations to the general manager and delegate. again, real-estate services cannot make these decisions. we need your authority. >> i view it as the framework sitting with the commission, that being the document that guides staff. the realistic guidelines, coming %ei not going to change that much based on framework, unless you do something dramatic with it. it is a high-level document.

we will always see how the two played together over time. >> you know the commissioners well. and if there is anything in either of these documents that you think either of us might get to? >> [laughter] >> not to be put on the spot, or anything. >> first off, i would agree that the framework document needs a bit more of a road show, feeling comfortable with it. making sure that they understand how the commission might think of looking at different pieces of property. it is what has everyone worried out there in the public sector. i tend to agree. the second thing and the guidelines document -- is there a showstopper there?

if you do not go comfortable linking them together at the same time, that is fine. we can continue on with our business for the next month or so. i do not see that there is a showstopper, from my perspective. >> that, to understand a bit better, let's say that we determined through the framework with options that there is secondary use like urban agriculture. we wanted to try to offer some land for sub-market rates, or something. with the guidelines have approved those first? it is then delegating an authorized staff or general manager to determine those prices. >> the basement fair market value guidelines cover that, if it is two public use -- let's say it was a church group, we would rent it to them for $1 per year.

that is stated in the guidelines. if someone is renting it like a nonprofit or for-profit agency, but they are paying someone else for the use of adjacent property, they might say that they want to get half of the market value for that piece of property. that is what it has been. we have not changed that. that is what we are continuing to do, and work on. they would all have to come to you, whether it is $1.50 of market value, it would have to be approved. >> in point, the nonprofit policy comes from to 1999 -- two 1999 commission policies. it has that changed. they are stated in these guidelines. >> if the commission changes or adopts new policy, there is

provision in the guidelines for update? >> yes. >> that update would be done by staff? >> by the commission. we actually come back to you. >> ok. one answer is, if something comes out of a framework discussion that requires a change, that would be a follow- up action? >> that is my point. if we look at the framework and determined that -- determine that there is something in the guidelines, it would make sense to take them together. it might not happen, but. >> which is fine. i am perfectly fine with holding them over for another month in bringing them back to you. having a bit more of a public discussion. once we completed that, bringing it back for adoption. >> ok. commissioners?

that is the recommendation. to continue both items, i guess, for two meetings. any dissent to that motion? >> does that mean that we will not bring up the other real estate issues? >> we do have just an update on urban agriculture, another item that we could put off for another month. the other one was just on security deposits. it is your pleasure, of what you want to do. >> i am not concerned about that. i am looking at the parcels that we might sell or do something with. >> i would come back in two meetings with that discussion.

thank you for bringing that up. that would be good. ok. without objection, that is the order, to continue items 10 and 11 for two meetings. in the spirit of getting additional public input or comment on those items, recognize that they will come back. ms. jackson? >> i was not going to talk on this, i did not know it was on the agenda, but i would like for the young lady who is the head of your department, if there had of that community college, when it was built, if the discussion during that time was january of 1976, then i hear

about you doing something in 1999? i do not know if it is the framework or the policy for the southeast community college. i would like to say that i would like this young lady -- where are you at, honey? come here, baby. [laughter] because, you know, this is very important. when i learned in when i was checking on puc being over -- you know, the community college? i would check in on my own to see who that land was under. guess who it was? it is not under the water department. the reason it was done that way , i am what they said was

supposed to pay no taxes. the real-estate, whoever we pay it to, property tax and everything, they told me i am not paying property tax on it and they do not keep records there, but the city department has all the records that i was involved in at the time. [laughter] i would like to have information on how this transfer is supposed to take place. i know that we will be meeting and there will be discussions. i had never spoken to this one lady, but now we may be having contact, sweetheart. [laughter] meeting over what is and what is not, in how we can stay together as a community in a city agency -- and how we can stay together as a community in a city agency.

those of you that know me, you know what you see. but if i cannot understand it, you can never understand it. >> mrs. jackson, i have nothing to say at this time, but am happy to work with you in the future. >> thank you. any other comment on items 10 or 11, which will come back before us? >> i look forward to reviewing item number 10, if not 11, as part of the cac. i did look at item number 11 in the binder. i look forward to seeing that to compare the changes. >> ok. >> back to item number 10,

although this talks about both a policy in a framework, i am confused if the framework is actually the policy. what we talked about before, maybe we just change the terms. i think it is good, but it needs to get better. that is what we're talking about happening. we're talking about the secondary uses. then disposing in acquiring. i guess i would think of it more in terms of using for utility purposes a section that is not here at all?

i think that the use of property for utility purposes, the good neighbor things that we do and how we operate, it is a half page snapshot with a triple bottom line analysis that puts more it was referenced at the beginning. the other thing in the environmental discussion is the promotion of the environmental benefits, such as urban agriculture, or other uses consistent with good environmental stewardship of the land, whether it is by the puc cuor others, that perhaps in the future we would not want someone to take a piece of property and

develop a new golf course, understanding that existing ones do not turn them over to an existing state. i would think that we would, going forward, create a new golf course on existing puc property. to the extent that there are environmental management practices needed, they would be the responsibility of the secondary user. that is somewhat in here, but it can be more clearly stated. let me leave it on item number 10. we will have more of an opportunity to work on this in the next month. i think that this is very important stuff for the present and future of what the commission has planned. >> let me ask a clarifying question. you are saying that this primary and separate -- secondary should be 90-20 moves?

>> i did not see language in here about utility uses of properties. all of the watersheds, we do things on that property in with those properties for utility services. we can explain that, i think, use in thetbn tbl approach as well, putting into better context of what else we do for properties not under utility purposes. >> thank you for clarifying. >> any additional public comment on items 10 or 11? seeing none, those will be continued to the first meeting in march. mr. chairman, items 12 and 13. >> pardon me. item 13. pardon me, item 12. >> 13. >> 13. discussion and possible action

to authorize the san francisco public utilities commission general manager, or his designee, to waive security deposit increases for certain existing loop -- for certain existing leases and permits with annual grants of $5,000 or less and amend those leases and permits. >> commissioner, this is a pretty straightforward item. is this right for action today? of >> i would introduce a motion. >> and a second. >> any discussion? >> any public comment? seeing no one, miss jackson? >> would this include -- is the

separate from the southeast facilities coming into town? >> and none of the security deposits referencing these motions belong to the southeast. >> i am just going to restate that my understanding, as i am meeting pretty consistently with staff, ms. lewis, getting a pretty clear understanding of the southeast facility. as long as there is nothing related to that, i am perfectly ready to move forward. i have kind of taken it on myself to move forward with a goodç relationship with staff n this. ç>> your answer to ms. jackso's question was that there was nothing in here that affected

the a semblance? >> correct. this motion has to do with some low rent security leases and permits, where we collect very miniscule increases every year in security deposits. in response to audits that it suggested that we obtain a resolution. we do not have to collect them anymore. it would release ease the administrative burden not to have to collect that increase every year. let's ok. we have a motion in a second and have received public comment. all of those in favor of the motion? >> aye. >> can those amounts of money be collected every five years? >> the commissioner would still require authorization from the

commission, as well as an amendment to each lease with a blanket resolution. we do like to collect them annually, so that we get income annually from the puc. >> was that an aye? >> yes. >> the motion carries. thank you. item 12, i would like to continue to a future meeting. if that is susceptible? >> second. >> i was just going to suggest, since it is just a presentation and there are speakers here on that, we might want to hear a presentation. i do not think that there was action on that and i do not think that it precludes further discussion. >> just a matter of time, if we're going to put the items over. but that is correct.

>> we're just trying to manage time to get to the budget items today. >> let me see the hands of people were here to talk about item 12. >> if we could just take those comments white -- while you are here. recognizing that we will come back with a full presentation. if you have something you would like to deliver to us now, this would be the time. thank you. >> commissioners, speaking in the absence of the presentation, we had a meeting with staff yesterday. the general point that i would like to make is that we are excited about the possibility of the two sites, and we

appreciate the staff soliciting feedback from the agricultural alliance and the numerous other groups that have met with. we simply encourage the commission in the staff to make sure that in addition to the conversation, the people who are near the site, that there be some available process for the public, through an open comment formñr, which allows people that we do not know about, to provide comments on these pilots, and that there be some time line placed on this about when we want to see these projects up and running. staff has lots of meanings that they are talking to to help move this along, so that it does not stretch out further that needs to. thank you. >> thank you, thank you very

much, mr. president. i appreciate your letting out the options of the presentation. i want to say that i am representing the san franciscan urban agriculture alliance, an alliance of the community forms of various sorts are around the city. i am from the eight valley farms. a 2.2 acre farm in the center of the city that grew out of the directive for healthy and sustainable food. one of the reasons that we were really excited that the puc was doing so much to make more land available put was that -- available was that the farm was going to close them. one of the biggest examples for urban agriculture and the flagship of healthy, sustainable food, would be closing down in the next year. i would echo eli in saying that

we are excited to see these projects going forward quickly. we would love to see the puc somehow make the process open to the public. there are interests, community interests in urban agriculture projects. it would be great to have a request for proposals so that people could give their input, as there seemed to be more and more requests as the project go and go. thank you very much. >> why are you closing down? >> the agreement -- the mayor's executive directive at budget city agencies to make land available. we were a project with economic workforce development. this was always land slated for development. it was given to us on an interim basis. turned into something productive in a big community space, we were always aware that it would thank you.

>> thank you for your comments. as a reminder, part of the reason that the puc came into this space was in response to the mayoral directive for public agencies to identify land that might be available for these purposes. i want to thank the staff and community for helping us move forward with this. i have a big interest in it as well. i want to help it proceed in any way possible, moving through the workshop and open house, where in the next meeting it might be too soon. i do not know if it is the commission orchid is offline, getting everyone to hear about the purposes and needs out there, as it would be what it is really about, being what they're looking for in these parcels.

in terms of resources, growing food, and what have you, i am happy to help with that process, so come back to the next meeting for shirt and we will help. that -- help keep this moving forward. >> thank you. let's move on to the budget. we have three items under the budget. one is the financial plan. we also have the operating to tackle. i would discuss the financial plan first, which shows us how we are doing against that nasty rate increase. a reminder to the commission, this is the fourth time it has been in front of us. you have in front of you their responses to the questions from the january meetings. questions that were asked by the commission.

coming to closure today. >> so, item number 16, first? >> item number 16. >> public hearing to consider and possible action to adopt proposed san francisco public utilities commission 10-year financial plan for 2012-2013. -- for the 2012-2013 through 2021-2022. >> we have set the slides to include the changes that were made for this hearing. i will spend more time on the slides that have changed. my colleague will then review the operating and capital plans. you will then have an opportunity to get more detail.

long-term financial planning is the best practice for government. so, we are here to present forward-looking financial's over the next 10 years, as required by the city charter. this plan helps to put fiscal decision making into an important context. as we spent time looking at it, i have several slides to share in each enterprise. you have seen many before, so i will focus on the ones that have changed. in terms of the assumptions, each of these models and includes basic assumptions that it is good to make note of. many of the salary, pension, and benefit changes are city-wide. i have made note of some of those changing pension costs, those kinds of things. borrowing costs for the proposed

debt is estimated at 5%. we have been very fortunate, as you know, in getting rates lower than 5%, but with -- for modeling purposes, we are sticking with that 5%. general inflation of 3% is anticipated over 10 years. these are a lot of numbers, but i wanted to show you that we go out of our way to show the 10 years of financials for those interested in the details. you will find very few utilities that share this level of detail, as well as projected rate changes over 10 years. we are proud of the fact that we're showing you as much information as we possibly can. the next couple slides, as we go through the settings for your amount of sales and whenever you use to do in the utility commission, it is a key component.

turns have been declining over the past few years. we are very fortunate that over the past few weeks, particularly the past few months, we have seen an uptrend for the very far rate of this slide. it is perhaps an economic upturn, but we are seeing improved numbers. when i get to the changes occurring on the rate, this slight uptick has helped in terms of bringing down the rate change that was projected. you can see that this one is interesting. it shows a stacked amount of water sales. we are projecting flat sales over the 10-year financial plan. the important thing that i wanted to point out with this slide is that we are 25% below what the water supply agreement is before the enhancement

surcharge kicks in. we are well below the level look penalty for the contract with our wholesale customers. you will see that -- first of all, let me reiterate -- the rates that have been improved our through fiscal 2014 for our customers. the area of focus you took with our presentation was beyond that beginning of fiscal 2015. you see in that area where looking at a 15% rate change in the year. how did we get there? we had -- first of all, as i mentioned, some improving water sales changes that have occurred over the past few weeks. that allowed us to increase our projected deliveries and sales of water by 2% to 3% for both retail and wholesale customers.

that's all about half of the issue. the other half was consumption that our wholesale customers will repay us about $50 million for the amount that they owe retail customers for capital cost recovery. you might remember that under our old contract with wholesale customers that there was an amount of money that was estimated that the wholesale customers owed to the resale customers for previous capital work, and at that time, that was estimated to be about $400 million. as of the end of the current fiscal year, the balance of that amount was about $370 million. what we are assuming here is that with wholesale customers beginning to look at this refunding opportunity due to the low interest-rate environment, we are anticipating that they actually will prepay a portion of that amount that is owed to the retail customers, and that prepayment will occur in fiscal 2015. that solves