wind up projects come to be, when they are completed come at it will issue a bond to take up the short-term debt, correct? >> we would. one thing that is interesting for the enterprise, many of the assets are actually assets that last 80 + years. the long is borrowing we can do right now is 30-40 years when the bond market. >> think supervisor chu: thank you. >> that is item number two quick concur with the budget analysts report. would you like the to do item number three? supervisor chu: yes. >> the next up is the water revenue bonds, as well as

refunding issues and reimbursement for a settlement. and the order of magnitude is quite large. to put this in perspective, the water system upgrade and rebuild was $4.6 billion. we have sold 3.3 billion of that. this would be the next cell we would need to the tune of $600 million. the pricing is estimated for may 22 at this point with a close in early june. because interest rates have been what is the lowest they have ever been since the 1960's, we continue to have what is a great environment for our ratepayers. bids we recently received by way of comparison for the upgrade show the seven bidders, so still very aggressive market.

the cayman significantly under engineers estimates again. when we previously reported to you, that is a trend we have seen since 2008. we have seen very good bids in very low interest rates, and that has been very helpful for ratepayers. the issue before you includes three parts for main pricing. reimbursement bonds of $17 million for reimbursement of expenses reoccur for the mitchell's case and the refunding of bonds that were previously issued about 10 years ago. wheat -- the only refund bonds are issued when there is a savings for ratepayers and are required under policy to make sure there is at least a 3% savings for those. the estimated borrowing costs are between 4.5% to 5 percent signed, but i would not be surprised if we did better than that. authorizations are the same they

have been in the past. the majority of the proceeds going for project construction. we have either completed or have under construction right now over $3.3 billion worth of the 4.6 billion, so we are only borrowing money when we need it to refund water commercial paper and to pay for water capital project investment. the funding with debt service cost at $600 million, and 17 million for settlement reimbursement for a total of $653 million. some forms of agreement are numerous, as is always the case when we come before you, but they are in standard form, and are what you look at each time for the due diligence of the bonds. other related items we would like to brief you on is the

financing resolution asks you to give us additional authorization to do refunding with the approval of the stanford cisco public utilities commission without coming back to you. -- san francisco public utilities commission without coming back to you. that would be no. i know you recently revisited this topic. -- that would be new to you. the goal is to be able to do this as timely as possible refunding to capture as much savings as possible. the debt savings reserve, we still have the absence of bond programs in the marketplace. we have solved that problem because of being blessed with a great deal of bond premiums, and they are when investors pay more than expected because of our coupons structure and credit quality.

we have allowed ourselves to have enough sources to fund those with the reserve. that is a great rate for dues payers. because 15% of our water is used by two private entities, we continue to have a sliver of exposure to taxable debt and have been borrowing with the lowest cost short-term commercial paper about 1 percent signed. we have also gone to the state and asked for permission for volume capacity award, and it does look like we will have a favorable award. we are currently being recommended to issue what would have otherwise been taxable debt to the tune of 59 million to cover the exposure to private expertactivity.

i mentioned the rates are similar to what we saw in the 1960's. it the fed has come out with the most recent statement that they expect to continue to keep real interest rates around 0% until 2014. we hope rates continue to go well, but we never know how long this rate environment will last. we want to come back into our refunding as well for july 4, 2002 bonds we issued 10 years ago. otherwise, i do not expect you to see me for new money until 2014. we are borrowing 3.3 billion, asking for another half a million for projects. 600 with financing costs, and the commercial paper program we would not need to sell around

2013 for the next. we are the steps through the 10- step program. we can really see the light of the end of the tunnel on this. supervisor chu: can you explain the volume capacity authorization. >> each state is authorized to issue up to a certain amount of tax-exempts borrowing under federal walls. while we have noticed in california with the resolution of public entities, there have not been as many folks are willing tax-exempt as you might expect. that is an opportunity for us, because the fed will still allow the states to benefit. so we filed this application as an the other public entities can do, and what would have otherwise been issued as taxable

debt, we may be able to issue it as tax exempt to get a better deal for rate payers. we were successful the last time, because there was still capacity in the state of california, and it looks like there is another $59 million we would be able to tap into. supervisor chu: that is great. you talked about the components of this item. the general fund i know has litigation reserve that is meant to really pay out or have money in place for anticipated payouts. does the puc per have one? the you intend to set one up -- do you intend to set one up? >> we do fund on a cash basis a small amount we expect for a normal or recurring items.

those are very small numbers. this is very unique. it had to deal with fiat capital projects and number of years ago that had been an open case. i would not recommend we budget anything close to this. since it was related to capital projects, we can go through tax- exempt financing to reverse operating fund. supervisor chu: i know the budget analysts will speak on the report. i did pass out a number of amendments i am proposing. one would allow them to move forward with refunding in the future, and i think that is a good thing. we want them to have more cheaper way than we currently have. that is good for ratepayers and us. also, we might want to set parameters on how it is they go out there. having and achieving a certain minimum level of senatsavings, e

as they can come back and ask for additional it they need it, authorizing or providing authorization that is a five- year term, allowing in making sure the assets in debt is a mind, and in making sure they are reporting back to us on the savings might be good, rather than having the blanket ability to do that kind of funding and having to check in with the board. i would like to make those amendments. i would like to wait for the budget analyst report first. >> madam chair and members of the committee, regarding item two, we report that 0.97% interest rate for commercial paper at the current rate compares very favorably as he has indicated with the long-term debt rates of between 4.5-5%.

we recommend you approve the ordinance to authorize additional commercial paper. regarding item 3 on page 6 of the report, we report the debt service numbers come out 1,335,000 and over 30 years, that includes the principal for the bonds, as well as interest of 375,000. regarding authorization that they are requesting to refund outstanding bonds, their plan is to refund at this time about $139.2 million that would result in the savings of about $9 million on a present value basis over the life of the bonds.

our recommendation for item 3 is shown on page 7. we recommend you amend the resolution by reducing the total request total ever in it -- total revenue bonds by 25 million. that would be from 692 million to 676 million. and that would be to meet the anticipated needs. by replacing the 675 million with 650 million on page one, line five. page three, line 25. we recommend you approve the resolution as amended. supervisor chu: thank you. with regards to the budget analyst recommendation to reduce by 25 million. >> we would agree. i would also like to agree and point out that there really are to write answers to the number authorization. -- two right answers to the

number of authorizations. we typically reserve the ability to upsize and events in the events the rates are so low. so we can live with the 25 million. we will need to sell another group of bonds in the future, and there really are two right answers in this case, so we will respect the budget analyst recommendation. supervisor chu: members of the public that wish to speak on items #two and three? >> supervisors, i have met with mr. todd reistrom from time

to time where he has given me what ever document i need to review them so they can better understand what is happening in this city and county of san francisco. what i am really interested in is the sewer system improvement project, where for those that are listening at home, 80% of the sewage comes to the bayview at this point. 20 percent signed goes to the ocean view. -- 20% goes to the ocean view. the san francisco utility commission is talking about dealing with the digesters, an important component, 50-70 years from now. i was paying attention and wondering why is this? if you address quality of life

issue, the digesters that are there now are affecting the community. are you saying sfpuc, i know that is not the chief financial officer, but i am addressing this to ed harrington and others, are you saying that the community has to sever for another 17 years -- has to suffer for another 17 years? i hope that this time around and the sources of improvement project is put in place, we lost our opportunity with the clean water system improvement project before. thank you very much. supervisor chu: other members of the public that wish to speak on item number two or three?

public comment is closed. if we can come item #two to not have any budget analysts recommendation. item number three, can we except the budget analyst recommendation to reduce the amount by 25 million? we will do that without objection. with regards to the amendment i spoke about earlier, i just want to read them into the record. what i would like to do is make a motion to amend the legislation to reflect parameters around the refunding abilities, specifically water revenue, bond refunding are hereby authorize subject to the following conditions -- that 3% net present value savings or greater are rajiv to help with great savings, that 5 million every funded principle is not to be exceeded by the water enterprise beginning with refunding after july 1, 2012. 3, the authorization is subject

to a five-year term covering authorization through june 30, 2017, at which time the board may consider an extension. but principal payments in terms may be adjusted under permitted in state tax law. 5, that the spcu within 30 days will provide a savings report that reflects a net savings and official copy of the savings. can we take the motion? we do that without objection. it to the underlying items, can we move item two forward with recommendation and item three with a recommendation? we will do that without objection. if you would work with our clerk of the board in with the city attorney's office to estimate the version with those changes

reflected. thank you. next item please. >> item number four, hornets amending san francisco administrative code section 10.135 to increase the cash revolving fund of the department building inspection from $2,000 to $4,500. >> i am pamela levin. this would increase the cash revolving fund from $2,000 to $4,500. over the past year and a half we have been working with the treasure tax collector to implement a new cash management system, and the goals of the new system is to improve customer services by reducing weight time to pay for permits. under the new system to permit clerk would be able to process payments at their station rather than using a shared registered. this will also increase

accountability, and also improve cash management procedures, which is requested by the comptroller's office when they sat down with us and did a review. in order to place the cash drawer at each station, we need to increase our revolving fund. i will be happy to answer any questions. supervisor kim: i read this was done to improve cash flow and customer service, but i am not sure how increasing the revolving fund does that. i am curious as to what the revolving fund is used for and what type of expenses are used with this fund? my understanding is this is more to increase your ability to use cash to make purchases. i am not sure how this increase is your ability to manage cash. >> the revolving fund is like

what a retail store has. in the morning you have to put money into your cash register so that when someone comes to pay you could give them change. it is not used for the expenses. what we do is prepare the next day so that we put it in the safe so they can deal with the cash coming in each day. in the next day since we already have the envelope, we can go and populate for the next day. in essence what this does allow us to process or populate is the best way of saying to populate

the registers so we can do business and allow them to have money in the safe and ordered to do change, because sometimes we have people come in and paid $2,000-$3,000 for a permit in cash. in the event we need to do change for either the ongoing operations or we have a copy machine that has $50 in it, we need to have change for that. it is not for us to do any type of expense. it is for us to be able to operate the various registers. supervisor kim: clearly you have times in the day when you run out of cash when they come in to make the payments. what happens when that happens?

>> we walked to the bank. -- walk to the bank. supervisor kim: so this is not used for petty cash? >> absolutely not. we have no pity cash and the department. supervisor avalos: when was the last time there was a change to the fund? >> we increase it to years ago because it was only $600. -- two years ago because it was only $600. we are seeing a significant increase in the permit activity. now we need to make sure we can use this new system. >> think you. this item did not have a budget analyst report with it. are there members of the public who wish to speak on this item, item number four? seeing none, public comment is

closed. a motion to send the item forward with recommendations. we could do that without objection. item number five, please. >> item #5, or its amending the san francisco part code, article 12 by amending section 12.35 to increase certain parking rates and eliminate the early bird rate at the golden gate park concourse underground parking facility, amending section 12 point to zero to clarify the requirements for annual be adjustments, and three, adding a new section 12.49 to ratify it prior fees and the adjustments. supervisor chu: sayswe have been advised with regards to the tidily that we clarify in the description what the actual legislation does. we thought there was need a clarification so the members of

the public would understand what the amendment was about. because of that, i definitely think we should continue the item to allow members of the public to have additional notification so they can participate and provide public comment and thoughts if they are interested. i do have a few copies. it is fairly simple. all it does is add it to the title to show clarity. the description would read amended section 12.35 to increase certain parking rates and eliminate the early bird brief of the golden gate park for course. amending section 12 point to zero to eliminate their requirement of the comptroller file a certification regarding cost recovery, striking out the language and will be adjustments. and adding 12.49 to ratify these

and adjustments and making environmental findings and findings of consistency with the general plan. the turtl we think that is more reflective than what is currently the title and description. can we take that -- we will open this up for public comment before we do that. rather than go into the budget analyst report, what i would like to do is request we do that at the next meeting when we hear it fully. we will take public comment for folks interested in speaking on it today. >> thank you, supervisors. my name is dennis moscow. you clarify something in the title, but in reading this i am particularly concerned. but mr. with the parking increase rates. i am thinking in terms of working class families that come on weekends or during the week

and cannot find parking in their local neighborhood or in parks. they will end up having to pay up to $5 an hour for parking. that adds to the cost of taking their families to the academy, which is now over $25 per head. that makes it a very costly event. i would look at that in terms of the impact. the second point i want to raise is on page two of the ordinance, 20, 21, and 22. it looks to me like what this does in eliminating the requirement of the controller and do not produce revenue that is significant more than cost is it eliminates oversight on fees. i read the legislative analyst report, which suggests that was

erroneously included and refers only to regulatory fees, but there is nothing in the language that refers to regulatory fees. i suggest you need to look at this in terms of whether this eliminates oversight and would allow a pretty free-blowing increase of fees. finally, on the last piece, the title says all fees will be here by ratified, and suggest environmental findings were made, and i do not see any of that in this. i question those three points. thank you. supervisor chu: thank you. >> due to the weird tidily of this item, we did not take this up. the conservation club has been very concerned about budgeting issues with recreation and park. on the first issue, is it

appropriate for these three very different items to come as one item before the budget committee? budgeting -- for instance, the parking garage issue is important, and probably to review how those fees go back to the funding for the parking garage. the parking garage, as we know, has a concourse authority overseeing it, and we're paying off the bond. how many years do we have yet to go, and how these increase fees will help pay off the bond, so the funds will directly come to this. the other issue is, in considering this is for the academy and museum primarily, how much thfees have the academy in museum been paying to park and recreation, and have those

fees increased, and have they gone through -- i would like that to be analyzed when this matter is heard. i do think that should be a separate item. as far as 12.20, a share the previous speakers concern. this is removal of oversight. it was not too long ago that we have the famous president of stanford university thing with his yacht with facility expenses. we want to know how these funds are being spent and we want annual oversight of the increase. as far as part code 12.49, i think this is inappropriate, because this issue about park fees is currently in legislation, so how can you eliminate this prior to the legal issue? supervisor chu: