>> second. commissioner moran: and i had a secondary discussion from the commission? public comment? >> thank you. just two items. yes, there has been great staff work on this in the last month and the last year and past years. two things that bother me a bit. on slide three, the water enterprise 10-year financial plan, if i'm reading this correctly, the fund balance, three lines up from the bottom, fund balance our operating expense in the year gets to a low of 2.2%. that troubles me in terms of just coverage. i see the other numbers. i hope that is not a typo, but i'm reading this above at 26.1 million projected beginning operating fund balance. that just seems low and troublingly low.

perhaps we could get some comment on that and maybe i missed it in the discussion -- what was the 30% projection drop down to 15%. what were the changes that resulted in that? did that impair or impact the our and our program -- the r&r program? and what got pulled to make that work? commissioner moran: that was covered. there were two big items. one was the projection of discussion, the -- of consumption, and the second was the possibility -- and making the assumption. ok. >> ok, on the first? >> regarding question of fiscal 15, yes, the overall ending fund balance, you will see a number there. $4.7 million. that is low. however, we do still abide by

our coverage requirements. coverage in short means you have enough funds in order to pay your debt service to your bond holders. you will see the coverage number in that particular year is 1.45. that simply means 1.25 is our minimum, and we are at 1.45, so there is still enough revenue coming in to meet our bond covenants, so we are still abiding by our reserve policy. it is a load fund balance number, to be sure. but we do still abide by our reserve requirements. commissioner moran: and one that we do not project staying at. >> that is correct. commissioner moran: thank you. we have a motion and a second. we have heard public comment. all those in favor? >> aye. commissioner moran: opposed?

the motion carries. call items 14 and 15. >> public hearing to consider the adoption of the two-year annual operating and programmatic budgets for the enterprises and bureaus of the jurisdiction of the san francisco public utilities commission and item 15, public hearing to consider possible action to adopt the two-year capital budget and 10-year capital plan for fiscal year 2012-2013 to fiscal year 2021- 2022, authorized a request a supplemental appropriation for the enterprises of the san francisco public utilities commission for fiscal year 2012-2013 and fiscal year 2013- 2014 and authorized and directed general manager to submit to the board proposed ordinances operas in the issuance of not to exceed $163,400,000 aggregate and civil amount of water revenue bonds and $492,810,000

aggregate principal amount of waste water revenue bonds under the terms of proposition e and to the wheel, the issuance of not to exceed $12,300,000 aggregate principal amount of power revenue bonds subject to the terms of charter section 9.107 (8). commissioner moran: thank you, and if he could focus on the changes since the last and the commission looked at this budget. >> good afternoon. i'm here to provide a macro view of the budget. this slide shows that from fiscal year 2011-2012 adopted budget to the fiscal year 2013- 2014 budget, the proposed budget is up $393 million, but primarily for capital and facilities costs with only a small sliver of $19 million or 5% for operating costs.

the operating budget rose from $657 million to $728 million. the growth is accounted by capital debt service, $11 million increase in personnel costs, explained by the employee furlough restoration, health and retirement cost increases, and physician and utilization. 4% for general users and $5 million or 7%, for all other costs, which include the transfers to hetch hetchy water to fund the capital project chemical costs, contract increases, and purchase of power. on the programmatic projects, the $15 million increase is explained by the $13 million of the loading date capital lease cost, and $2 million of the regulatory compliance costs. the next slide is a recap of the

key dollar amounts and% changes between the adopted and proposed budget with capital and programmatic cost accounting for the majority of the increases. on the full time positions, the position counts if kept flat with positions, substitutions, and reassignments. on the sources of funds, only the debt proceeds, as you can see, mark here on the graph, that is going up. everything else stays flat. with the uses of funds, the capital project costs, and the debt service are increasing while, again, other uses remain very flat. the last slide highlights some of the fiscal impact of major projects, ending on the high note that the infrastructure and free enterprise is managed to

have no new positions added in the new budget and struggling with the position substitutions and reassignments. at this time, i would like to also mention that the proposed operating and capital budgets are developed with consideration of the rates compliance and sufficiency, and the rates policy is being proposed in the next item on the agenda. are there any questions that i can answer? >> thank you. just one comment. this is unlike, i think, any budget presentation we have seen before in response to commissioner torres' request that we roll out to the entire puc instead of just looking at enterprise by enterprise. any questions?

and i had a motion and i have a second. public comment? >> i support the staff recommendation. good work by everybody. carlos, charles, francis, todd, wherever he is. thank you. commissioner moran: wherever he may be. >> he was reduced in the budget. [laughter] commissioner moran: ok, any other public comment? all those in favor? >> aye. commissioner moran: opposed? \ the budget is adopted. >> that was for items 14 and 15 combined. >> yes, because they were calso. >> yes.

>> thank you. espanola jackson. i talked with staff because i want to know how you operate dealing with the budget, and especially for the southeast facility, commission. i do know there is a budget, but i have never been a prize to how it gets to be. i am submitting to you because i'm understanding that some of this is already in the budget for the southeast. here, sweetheart. i will read this off. i put in that what has -- with the need is is not all of the need for bayview hunters point, but we could start there with some outreach workers. maybe i can get a better understanding on how this budget is going to work, but i would

like for you to add a little bit more money in for the southeast facility because it is very important. because there has been a lot of changes, and there are still some changes to come, and, like the mother hen of the college, i want to make sure that everything works out. thank you very much. commissioner moran: thank you, and there are ongoing discussions about programming that space and changes that need to be made. ok, thank you. mr. secretary, if you would call item 17. >> item 17, rates policy. public hearing to consider possible action to adopt the proposed san francisco public utilities commission rates policy. commissioner moran: commissioners, this is something we have talked about a couple of times. it was before us in i think exactly the same form a couple of meetings ago. this is really a perspective

policy. it will apply to the next time we do this, which will be in two years. so we have time to see how it fits and if we change direction, we can do that. i think there is value in setting that direction today. one thing i would ask staff to do is kind of reflect on if we were looking at the budget we just adopted, through the lens of that policy, how would we have done? >> mr. president, actually, we did ask that question. we looked at the proposed policy. we look at our proposed budget, and looking through the lens, we think that the policy -- the budget reflects the policy. we are going to have to refine a little bit more as we go forward, but i think it does reflect the thinking that you have in january, the discussion that we had, and the revisions we have made to the rates policy.

as we carry it forward, even as we do the wholesale rates and such every year, we will be reflecting on that policy, using that policy, and using that lens. commissioner moran: i think some of the -- the two areas that i think we can look at in the current year is sufficiency and compliance, and that has to do with -- have we put money behind it things that we have said are important to us? in some cases, the answer has to be in part. for the environmental justice policy and some other policies, we are developing a sense of direction. we have money in the budget that is starting that process. undoubtedly as we go, we will want to adjust those allocations. it is not an all or nothing kind of determination. it is not -- have we completely done everything we want to do ever? but we accept that we are making progress. what i was hoping as we make

additional discussions is that we could have a discussion not only in the context of the financial plan but also whether the things we have said are important, how does the budget reflect those values, and to what degree are we proposing to meet that or not? that is the intent of this. we have seen it before. i have a motion and a second. thank you. all those in favor? >> excuse me. commissioner moran: sari, public comment. >> this also is absolutely ready for prime time. i think it got better with additional public review and one to thank everyone for their work on it. commissioner moran: thank you. all those in favor? >> aye. commissioner moran: opposed.

>> motion carries. thank you. >> item 18, motion to color -- calendar public hearing on may 8, 2012, to consider the adoption of wholesale water contract rates for fiscal year 2012-2013, effective july 1, 2012. commissioner moran: this is a motion to set a date for hearing. can i get a motion? >> so move. commissioner moran: and i have a second. thank you. is there any public comment? thank you. all those in favor? >> aye. commissioner moran: opposed? the motion carries and the hearing will be set. >> the next item is our closed session. if you would call for any public comment on any of the closed session items at this time and then entertain a motion to invoke the attorney-client privilege. commissioner moran: do we have public comment on the items in closed session? seeing none, do i have a motion whether to assert attorney-

client privilege? move to assert and second. any comments? all those in favor? opposed? the motion carries. >> if you will give me a moment to read the items, we will then go into closed session. conference with legal counsel existing litigation with defendant. 22, conference with legal counsel, existing litigation as defendant. 23, conference with legal counsel, real estate negotiation. concerning parcel 65, calaveras road. we can now

commissioner moran: ok, we are back in open session. the commission approved settlements on items 21 and 22. no action was taken on item 23. can i have a motion with it to disclose? >> move not to disclose. >> second. commissioner moran: discussion? all those in favor? >> aye. commissioner moran: motion carries. other new business? no other new business. this meeting stands adjourned at 4:00.

>> you probably think you know all about the exploratorium. but have you ever been after dark? did you know there was a monthly party called after dark? science mixes with culture and adults mix with other adults. no kids allowed. every week there is a different theme. to tell us about the themes is melissa alexander. tell us about some of the previous themes we have had. >> we have had sex ploration,

sugar, red, blue. many things. >> what is the theme tonight? >> rock, paper, scissors. we are having a tournament tonight, but we have also used as a jumping off point to explore lots of different ideas. you can find out about rock, paper, scissors as a game as a reproductive strategy. you can interact with a piece of art created by lucky dragon. you can get your hair cut from a cool place called the public barber's salon. they use scissors only. you can find out about local geology, too. >> that sounds like fun. let's check it out. >> this is the most common rock on the surface of the earth. interesting thing is, most of

this rock is covered over by the ocean. >> error congested a cool presentation on plate tectonics. tell us about what we just saw. >> we wrapped up a section of a lesson on a plate tectonics, here at the exploratory and -- exploritorium. >> are you excited to see people here having fun and learning about science? >> the people that come here are some selected to begin with, they actually enjoy science. i teach teachers to have fun with their kids. the general public is a great audience, too. they're interested in science. >> we have a blast every time. they have different names. >> they have a bar and a cafe. everything i need.

we are excited for the speaker. >> it is nice to be in the exploratorium when there are not a lot of kids around. >> before tonight, i never knew there were major league rules to rock, paper, scissors. i am getting ready to enter into a competition. sarah's here to give me some tips. what do i need to do to win it? >> this is a game of chance, to a degree. one of the best ways to bring it home is a degree of intimidation, maybe some eye contact, maybe some muscle. it is a no contact sport. sheer i contact is a good way to maybe intimidate to see if you can set them off, see if they throw something they did not mean to. >> i am going to see what happens. >> i got kicked out in the first round.

[applause] >> given up for sunni. the rock, paper, scissors champion. >> what are you going to do now? >> i have been having so much fun. i got my tattoo. before we go, i want to thank melissa alexander for having us here tonight. how did you know san francisco needed a night like tonight? >> thank you for coming. everybody loves the exploratorium. we are reluctant to push the kids out of the way in the day, so i knew we needed to create one evening a month just for the rest of us to have a good time, the adults. >> absolutely. where can we find out what is coming up after dark? >> that is easy, exploratorium .edu/afterdark.

>> thank you. thanks for watching >> he has a way about him that brings people in and seeks to involve the people of san francisco. that is what we need. the polarization and san francisco does not benefit the people we are about to help. they need compassion, support, and they need us to work together to build a system o and employment and drug treatment and family building and all of those services that will enable us not to pay so much money on the back end. what you are doing is spectacular. i am humbled to be with you. i am excited the mayor has me this opportunity to work with great people to do this work. believe me, the best is yet to comment. thank you so much.

[applause] >> this is only his third day on the job. thank you for coming out. it is exciting to live in a cityç really believe in changig chrysostom of care with homelessness. -- changing the system of care with homelessness. we admire and respect and are so excited to have them here. it makes our day when we start the day with them. thank you, mayor lee. [applause] >> good morning, everyone. she wanted to introduce people who are above her. we are never above her, we are

with her. [applause] anytime we can have a thousand volunteers and over 300 providers to help us withç helping others who need our help, that is what san francisco is about. yesterday, were you there at city hall? how many people were there at city hall to celebrate 50 years of tony bennett? you saw it on the news. you've heard about him being there. we gave them the proclamation, the key to the city. what i was thinking about all day long was how wonderful our city is. the fact that tony bennett has sung about our city, and i just kept thinking, why do we do this? why did you come out so much? you'll love this city as much as

i do. çpeople of all levels, whether you are working for a great institution or you are working with a different company or you were just a volunteer and someone who cares about somebody else, you do what you can. when we can organize and city government to provide that to opportunity, and whether it is a haircut, how can we provide training, how can we get you some eyeglasses, how can we set you up on e-mail -- q different parts of life we live normally may not be available to everybody, but you are here to make that available. when i think about the otani bennett is singing to, i think about you.

-- when i think about who tony bennett is singing to, i think about you. it is a city of people to know how to do things for other people. that is what makes me so proud to be the mayor of this city. i am willing to sacrifice everything there is to do what is good for the city. i do not care about the politics so much as i care that we can bring more people together under this big tent we call the city of san francisco. triple the effort to help so many other people change their lives, and if we can have a moment and their lives to suggest there is a way out, venues in which we care for them, it isç represented in the way you do things today. çthe way you talk to people. the way you communicate.ç i love these efforts come at these efforts for we can demonstrate all the humanity we

have. people watch us and they think about san francisco and they think that is the place -- you can get lonely in manhattan. when you come to san francisco, it is not law only. bottom of my heart. thank you for coming out and sharing with us your skill sets as we go and do what we're supposed to do to solve the chronic and long-term needs. we enjoy these moments where so many of you as sure your resources, your time, your character and personality. congratulations, thank you to çthe 43rd homeless can act. thank you for being here. -- connect. thank you for being here.

>> we have never given the mayor a t-shirt. i think to date is the day. [applause] they are one of us, right? [applause] i want to close today by thanking -- you see if the people up here, but there are hundreds of people getting things set up. have a wonderful day. we also have a very new committee that will be here today. çthey will be walking around to make sure that you, the volunteers, had everything indeed. if you need something&j, let us know. ok? have a wonderful day. [applause]