the rate projections were part of the discussion of the two of ago. just so you know, we're operating on that. the key to the staff for making that available. wholesale water rates are on the agenda for the afternoon. we have some comments after that. and finally, looking for the water system improvement

program. we are in the process of producing the mid-program. for the board members, she is in charge of that. if there are any issues that you can find that we think need attention, we will present them to the commission with recommendations in the past. we value the close working relationship, the fact that the program is working incredibly well. i don't expect very bad news. there will be some constructive recommendations. any questions? >> madam secretary, if you would

call the consent agenda. >> approved a modification for waste water enterprise contract, north shore improvements. with the time extension of 150 consecutive calendar days and no change the contract amounts. authorizing the general manager to extend the term of between the san francisco public utility commission and the sanitation district, no additional funds are needed. the award water enterprise contracts for the peninsula in 2011 compensation. in the amount of 5 million -- to the lowest qualified bidder.

approve the plans and specifications and waste water enterprise contract. in the amount of $2,944,425, of which $1,862,164 -- funded by the department of public works to the lowest qualified and responsive better. for waste water enterprise contractors, mixed liquor, and headworks facilities improvement and improve the modification number to increase the contract with a time extension of 270 consecutive calendar days and authorize final payment to the contractor.

wd-2627, reservoir rehabilitation and authorize the general manager to authorize the contract for the rehabilitation and seismic upgrade. approve water conservation operating agreement. with the urban storage for another two years, authorize the general manager to increase the agreement by $24,500 with a time extension of two years. accept work performed by 2595, sacrificial -- to descreasecreae

contract amount. and authorizing final payment to the contractor. >> any items to be removed from the consent calendar? can i have an motion? >> moved and seconded. >> the consent calendar passes. >> item 10, authorizing the general manager to exit an mla to not exceed -- with the duration of three years to fund the purchase and installation of 36 water conserving drinking fountains.

>> that was my cue for the power point. thank you. we launched an initiative where we installed 15 stations in public locations. for the purpose of clarity, where you can fill a water bottle. in 2011, there was a state and federal legislation to have schools provide access to fresh drinking water.

for many people, they assume there is access to drinking water, and that is not the case. at the federal level, it did not provide the school with an opportunity to opt out because of financial reasons. the initial initiative and other educational efforts, it seems like a the opportunity for us to secure a partnership with them. we will have the opportunity to get a sense of the time and cost for the installation and get some intel and insight. we heard from the plumbers, initial units installed, what

they found when they opened up the wall and have the pace of being able to install the units. with also set in california endowment, a statewide health foundation. they paid for all of the water bottles as part of the initial -- it is important to mention the role that the health department has played through out the process. we are doing pre and post tests to see if the children drink more water after the units come in, and we do see that frequently. the larger initiative program, it allows you to install 36 of

the public schools over the next three years. if they were chosen based on several criteria, there is no existing drinking fountain adjacent to the cafeteria or that it is there, doesn't work. the third criteria was the it was part of the upcoming bond. another 26 schools in addition to the 36 we are focused on will be covered vase of the upcoming bond work. educating the students over other beverages, to increase their awareness about where the water comes from. an important component to this initiative, there is a mentor

should program around the installation of the unit. for the shuttle component, high- school students are taking a the technical class's through this program, they will be able to shout of the installation. -- shadow the installation. this slide shows you a map of where the drink schools are located. and the next slide has a list of all the schools, the highlighted one's heart of the schools better on the superintendent's special zone lest the our priority zones -- list that are priority zones. [chime] sure thing.

let's see. the powerpoint presentation is gone. thank you. this slide shows the example of the budget for this project. the water enterprises supporting this effort through the conservation budget. it is fairly straightforward, we cover the cost to partner with the water bottles. for each of the line items in the budget, whether it is around the cost for the taxation -- tap station, what it could cost, etc.. the staff are extremely excited about the ability to continue to partner with the department of public health a round of

forging the federal government which regards to the kids that have access to drinking water on the premises. to thank the staff that has done the heavy lifting in making this collaboration happen, you can imagine is a lot of work. from the communications team, they provided a lot of leadership on this topic. they came up with the idea of having the shuttle component. and we have been working really closely from the school district. that is the presentation, and if there are any questions, we are available for that. >> for the school's not on the list, what was the criteria for keeping schools off of the list?

>> there are schools that we already covered that are part of the first pilot, and there are an additional 26 schools being covered through the upcoming bond, and there were schools that have water access with the drinking fountain that was adjacent to the cafeteria. >> the goal is to cover elementary and secondary schools? what is the timetable for that? >> three years. >> 2015? >> yes. >> what was the priority? >> we have been working with the school district trying to get a sense for them, when they will be doing construction or other work at the schools, the is trying to get into the summer months or the break months and getting in the schools that they know have a bigger issues, whether it is hot pipes or asbestos, or we looked at where

to put them in the queue. >> you have done cost considerations as well as other issues? it is more of a priority with certain schools? >> is exactly. >> how do these work as drinking fountains? gosh you open your mouth very wide. my understanding is there is a spell out that the child can go up and drink as a regular water fountain and there is a larger one or they can put a water bottle underneath. >> you have to have a friend told you upside down. -- hold you upside down. >> it's a bonding and trust exercise. [laughter] >> public comment, i believe we have a couple representatives of the unified school district.

>> have a commissioner on the board of education and i have been serving on buildings and grounds for the last several years, and it is good to see this project come to fruition. i want to thank you all for the wonderful support and were that you have been doing with the school district. i think we recognize that partnerships are incredibly valuable, not only in the school district, but in the city in the challenges that we face. part of this initiative is keeping our kids healthy, making sure this component is key to the work we have been doing. it introduces kids to some wonderful opportunities not only in freshwater, where it comes from, how it gets here.

we wanted to be here today to thank you all very much for your support in the leadership that she and her team has demonstrated how to make sure that the partnership works really well. >> i want to say that you have a position that is the most intense of any position in public life. >> thank you for and knowledge in that. >> i want to have knowledge a personal thank-you for all the work you have done with children and education. it does not go unnoticed. >> i truly appreciate that. >> i am the sustainability director for the district. everybody loves and unfunded mandates. we were very fortunate to have the others allow us to meet those mandates.

this project brings together all those issues. also want to mention that the department of the environment does a lot of the modifications for us. and inside the classrooms, they teach the kids. they may not have risen to this is collaboration between the arms of the district. as hydra mentioned, we have done presentations already. in chinatown, the kids were excited about tap water. it is possible. we will help to make it happen. >> is there any other public comment? do i have a motion? >> so moved. >> the motion is moved and

seconded. all those in favor? opposed? the motion carries. item 11. >> adopt the mitigated negative declaration, reporting program and the findings as required by the california environmental quality act. approve the plans and specifications and work with the waste water contract in the amount of $15 million. authorize to finalize negotiations and enter into an mou with the port of san francisco to attain necessary access for implementation and authorize the general manager to negotiate and -- and execute a new moa. >> thank you.

this is the item you hard referenced earlier. bryant gave his report as how the asset has failed as recently as six weeks ago. it also failed twice in 2008 and once in 2006. we have it on life-support and we need to move it forward. if it is approved today, we will be able to have the replacement complete prior to the commencement of the america's cup races, july 4, 2013. and hopefully avoid any failures in that time between. hopefully with your consideration we can move this forward. >> thank you. commissioners khomeni questions? any public comment? -- commissioners, at any questions? -- any questions?

moved and seconded? all in favor? the item carries. item 12 is continued to our next meeting. item 13. >> approve street light policy and authorize the general manager -- by other city agencies and to issue licenses for full use 2 nahyan visible entities and authorize the power enterprise to develop a procedure for reviewing and approving the use of sfpuc light poles for non-lighting purposes. >> what we have before you is our recommendation for establishing a policy that allows us to move forward with letting non-3 light purposes on our street light poles when there not generating-revenue generating -- when they are not

revenue generating activities. we would like to work with them to allow use of the polls as appropriate under the guidance listed here. i am happy to take any questions. thank you. >> did you consider charging for the capability? >> we could. there will be expenditures on the part of the project proponent. there will need to demonstrate to us that the structural integrity of the poll is not compromised -- pole is not compromised. there will need to meet the ceqa compliance. there will need to invest some time in order to demonstrate to as the appropriateness of the use. it will not be free to the counterparties. we're not charging for the use

to generate revenue. there are and unease whoever approaches in the past who have a business interest in using our non-municipal departments to have a business interest in using our light poles. we see this as revenue generating opportunities. this is specific to those opportunities that are not revenue generating. >> city departments. >> correct. >> city departments, neighborhood association. thank you. any questions? public comment? seeing none, can i have a motion? >> moved. >> second. >> and seconded. all those in favor? the motion carries. item 14. >> presentation discussion of the proposed contract rate scheduled to recover the project projected water rate water

requirements. under the terms of the to basnight water supply agreement between the city and county of san francisco and wholesale water customers. >> could afternoon. -- good afternoon. this is an update for you. we do have a public hearing scheduled for two weeks from now to consider the proposed rate change for the wholesale revenue -- rates for fiscal 13. this is an update on the process thus far. when we talk about water rates, we want to look at what the current year looks like and we have shared much of this with you already during budget process and the quarterly updates. just quickly, the water deliveries we have seen through the current year have been slightly below budget as well as your to the projections.

that translates into a $3.70 million and revenues below expectation. as we shared with you, we have been able to replace those lost revenues with onetime items. the overall prices would be fine in the current year. the next set of numbers shareece u how the fund balances change over the last few years and it has been trending down. we're looking for fund balance to bounce back up at the end of this current year at $33.60 million. a number to keep in the back of your mind, we like to have two months' worth of revenue or expenditures in our fund balance for prudent planning purposes. that is $50 million. that is our target. the balancing account pertains to or wholesale customers on the water side. that has to do with the cumulative variants that occurred over the past few

years. you will see that for the end of the current year. $22.70 million. that amount will be rolled into the fiscal 13 rates will be talking about. you will see this has been declining, slightly down from 2007 trade we're projecting flat water deliveries over the next two-year budget cycle. curt and water delivery assumptions is important and we talk about city rates. that is the denominator in the unit cost calculation. if we come in short that results in a revenue shortfall. if we under project and have more sales, that is a difficult -- additional revenues we will be dealing with. our contract allows this to be up at the end of the year. this chart is one that is the

same charge as would i showed you. it has more data points. it is a monthly charge. you will see a slight uptick if you look at the wholesale line and the straight line there, the slight uptick you see is some glimmer of hope over the past few months indicating the dry weather has increased overall demand. however, prudent planning requires us to set our rates according to the trend line you see there. what -- how that translates into our delivery numbers, 137 million gallons per day. which is the denomination as we said our rates. the -- the denominator. 137 million gallons per day, we had two alternatives when we were considering the fiscal 13 rates for the wholesale customers. we could keep our mid year rate

triggered reinstituted a midyear rate trigger which allows us to readjust rates if need be. if deliveries came in below expectations. and if we have that, we would not have to have as conservative a delivery assumption. we needed to have a conservative delivery assumption without the rate trigger. our long-term planning that we shared with you during the budget process is over 10 years and we want to make sure those numbers we present to you are based on normal weather patterns, not dry, not wet. we have a very dry winter in the current year that we are not expecting to occur again next year. if you look at the charts that i shared with you previously, that trend line indicates what is expected from the average weather perspective. that is what has caused us to project the 1 37 million gallons per day.

we do reach our customers through rate noticing. we gave them 60 days to weigh in. the comments we received from them indicated a preference was to not have the rate trigger. and to look at a slightly more conservative water delivery assumption. that is what we will be presenting to you in two weeks. we received several e-mail comments from our wholesale customers as well as forwarding comments and we share this with you in this package. -- shared this with you in this package. the wholesale revenue requirement is made up of four main components, operating costs, the pre-2009 estimates and wholesale repays as for the assets in place when the new contract went into affect. the debt service costs is the one that is driving the increase in wholesale revenue requirement. revenue funding capital and we

have the repayment to the balance as well. all these role in to the rates reset each year. you'll see in the fiscal 13 column we have $200 million in need where we need to match with our rates reset. the slide in keep some rate changes. a very large 38% rate change in the current year. we will not be repeating at any time soon. we are projected to make 11.4% rate change in fiscal 13 for next year. with rates that vary between 7% and 16%. as you see there, having an 0 rate increase. since we share with you during the budget process