>> thank you for calling -- chairperson chu: thank you for calling all the items on the agenda. i imagine we will cover these items as we go on in the presentation, so i wanted to make sure that we call them the first item, this is a continuation of discussion around the budget. why don't we begin with ed harrington with the public utilities commission? >> good morning, supervisors. thank you for having us here today. ed harrington of the san francisco public utilities commission. the items before you today are 1310 of the items on your calendar relating to the -- are items one through 10 of the items on your calendar relating to the sfpuc. the big story at the puc is that we have put forward a five-year

rate package three years ago. we have two years left. we have not had as much water falling from the sky and as much water sales in the last year or two, so our revenues are down, but we wanted to stay true to our great package, so we have left those rates in place. in general, you will see a total budget that is lower the first year and somewhat higher the second year, but its capital and operating. the real story is infrastructure. the other story is that we will be spending a lot of money, even if it is somewhat less than the current year. you can do it right or you can do it wrong. we have been trying to do it right with things like global jobs, benefits, language access and those kinds of things. i also wanted to start off by saying that we are in agreement with mr. rose on his proposed cuts for today. i especially want to thank its staff -- his staff for all the

work they did on this budget, and obviously, mr. rose himself, and the budget director from the comptroller's office. very, very helpful. we have had the same person working in charge of our budget for 31 years now, alex sokobo. [applause] the interactions between our agencies simply would not work without alex. along with that senior staff, i wanted to know that a lot of the work is done by carlos. with that, we are trying to maintain ratepayer affordability, and because of that, you will see very little change in the total budget spending. we're also doing low-cost bond financing. we issued $7 million worth of debt on tuesday morning and we got about a four 0.7% rate --

4.7% rate on that. we also received for the first time some bonds for hetch hetchy power, and that is because of the discussions from last year over the ability of having -- ability to have a stable revenue source for hetch hetchy. to put it into perspective, this building, city hall, this next year will pay as $27,000 for power. in the early part of the year for the first quarter, our budget for hetchy is off by $11 million. and that is because it did not rain as much as it normally does. we did not have as much water to create power. we did not sell as much power and we had to buy some. and the volatility of nature creates a swing of as much as

$11 million in just one year. the stability of their rates will be very important as we move forward. major capital investments -- and you will see ease again. and the bond issue is there. also, the supplementals that are for you. >> we have about 20 major projects under construction right now about $2.5 billion for the first tunnel under the bay and then a new tunnel over in the hills of the east bay. a lot of work is going on out there. it is dramatic and we are still on target to finish those projects, virtually all of them in the next couple of years, the last one by 2016. on power, you will see in the budget that we have put in additional money for street lights. fort -- part of the street light money is for van ness, but the

additional amounts are for the hearing this week and we have added money into the budget to accommodate those kinds of requests, such as street lights. you will see money in there for that and other system of grades -- systems upgrade at the puc. we're working to make sure that our power production is stable and meets all of the requirements of the federal government to make sure that we do not bring the western grid of the power grid in the united states by something we do. a lot of what we will do will be equipment for staff training. and other items related to power that you will not see here, i know we have been talking a lot about community choice aggregation. there is an item that could be pending at a hearing in july

that could include money set aside for the budget. it really is for a separate item that will be coming year. -- coming here. on some work, that is the biggest thing coming up. there was a lot of conversation about having a sewer rebuild and a water system rebuild. as the water system rebuilt, the sources to rebuild and got more expensive and pushed aside. in addition, we are having flooding in different parts of the city, certainly, fulsome and 17th street have had flooding. there have been climate changes and will be talking about a new sewer system program.

we are doing one major project on the eastern side of san francisco. the big money will be with the commission tried to figure out what the appropriate size is of the program, what we can be prepared to pay for that program. do we stretched it out, drop things off of it? but how can we control flooding and deal with the major issues our plants in san francisco? in both cases, you will see large increases on the money we spend on local maine -- local increases. we have changed out three to four miles per year of sewer and water mains. we are now at about 6 mi. per year. you will see in the budget for 2015 we hope to get to 15 mi. per year. because without that, we will

have continuous street disruptions as we have mains break. you'll notice the budget is pretty flat. is actually down in the first year, up in the second year, with the total budget -- and it is really capital. the positions are basically flat. there have been some positions moved over from our infrastructure group into our operations group because now that we have finished a lot of the construction we have got to do the environmental litigation on those. there are a couple that we changed out and added a position and reduced salary and those kinds of things. but those are basically flat. over the next two years, 80% of what we're talking about is capital. personal items are just enough to make sure that we are paying for any increases in what was used and in the labor negotiated. the capital supplemental, and you will notice a large amount for water.

it is not that much related to the water system improvement program, since that is mostly funded. it is also not related to the water supply system. that is part of the general fund that is the general fund bond that is paying for the water system that the department uses for the water supply. the big money that you see in water there is to a large degree stepping up the manual replacement, plus some other projects. waste water, similarly, you will notice that it is going up almost $600 million for waste water, and nearly half of that is the seed money for the large infrastructure projects on the sewer system improvement program. and the hetch hetchy is mostly country maintenance work and redoing of power for that, plus the in-the power for street lights and things like that. -- d inthe in-cotyity program.

the seas are rising and we are getting saltwater intrusion into our system at this point. we have a plant in the southeast that still has an odor problems. it is not a good neighbor all the time. we have other issues that we will need to cope with and deal with at some point in the future. what you have before you is the initial amounts. any big money and the real decisions about what we will have to do will have to come back to the board. on that note, the sewers system, you will notice, is aging. the average life of the types that we have is about 100 years. a lot of those were put in place after the 1906 earthquake.

they're reaching the end of their life. if we do nothing, you will notice that the blue section shows a lot more failures in the streets of san francisco. when you have a feel your of your water main, it blows up. it is very noticeable. when you have a feel you're in resources and, it tends to have potholes' and the ground starts to sink and you tend to have a lot more potholes and street failures around the city. we need to do something or around 2025 will have 20% of our waste water mains failing in san francisco. the other thing i want to touch on briefly is work force. and ms. simmons is here to talk about this. we had six projects that were related to local hire. the demand rate was 20%. our participation was over 30% on those projects. on our new headquarters building, which is not subjected

to this, our average was over 45% in terms of local hires for that. chairperson chu: supervisor avalos? supervisor avalos: are we hitting that mark on all of our trades? and what is the fluctuation of between the trades on that mandate? >> we are not hitting the mark on all of them. we tend to be doing better with laborers, operating engineers, and partners. we tend to do less well with -- and carpenters. we tend to do less well with specialized trade. or welding, it is hard to get into that. there are traits that we need to do better on. i would be happy to hear from rhonda specifically on something we could add to that. >> good morning, supervisors.

we had 153 total hires for our first-year local hire. and as just a bid, 73 were on puc projects. the majority of those new hires went to labor this time. that has a lot to do with the mix on the projects more than anything. as we move forward a your to and have more diversity of projects, the year two is where we have the largest dollar allocation for the project. he will see that branch out. the mix that is reported here is not out of the ordinary. the puc headquarters project, while it was not subject to local hire, it did actually meet the time line. we are very pleased with the amount of hires that we did. we that a number of our recent graduates be able to get in on

that project and stay for a period of time. >> we are well above our mandates -- supervisor avalos: we are well above our mandates in a lot of trades. are they just not performing as well in those that are lower? >> if you're talking about local projects, is a little bit too early, to be honest. i think that first year, we are pleased that we did the. we did not hit our goal by trade, regardless of the department. some of those projects are not still going on. that will get wrapped up and the data will be rolled in. it has more to do with the timing of these projects and how the data rolled out. but for the first year, remember, we had a late start up and all of that. i'm only cleaning up eight to nine months of hard data.

some of these projects are still going on supervisor avalos: -- going on supervisor avalos: i just wanted an update on all of the traits that are still underperforming. >> i would not say that they are way underperforming at all. they still know where we are. it when i come and do the full update on specific higher, then we will talk in more detail. but nobody has zero or anything that i'm concerned about, or anything where there is urgency to it at this point, no. supervisor avalos: thank you very much. >> do not just think of san francisco when we are working on things. it is regional. we have been doing a lot of work. a lot of work in alameda county and san mateo county, and san

walking county. -- san -- san joaquin county. one of the changes in the budget is 11 people used to be in the infrastructure group and they are now working over at the water department. they have traded a new habitats -- created a new habitat. we are doing specialized training to bring other people like that into that kind of work. we are bringing new people in that can do long-term maintenance of the infrastructure and the habitat that we are creating. the caltrans project has particular things for carpenters and laborers at substations and things that you're doing when you are building a new dam. we have specialized training there. and we have the tender program

where we have taken five people from alameda, san francisco, san mateo county -- and there have been about three groups of 15 people each where we are doing special training in close quarters to work on a project that we have. i appreciate the work of the puc because we did kraft the local ordinance to be regional in nature. supervisor avalos: thank you for reaching out. >> thank you, supervisor. at the public utilities commission, we expect about 200 to be employed by the puc this next year. part of that will be on the project for the water department, a high-school students and the crown -- conservation corps. these are students that are route graduating in the master's program in college very often. chairperson chu: in the employment area, how do people know about the positions that are available?

>> they can go to our website at sfwater.org. if there is any information that you need from our offices, we would be happy to provide it to you also. the project is a joint project spearheaded by the sfpuc and dpw in san francisco. the garden project is working with the sheriff's department. in each case, we are partnering with others, we can make sure that people are aware of it. supervisor kim: it would also be helpful to get the breakdown of the use intern's -- youth interns by zip code and by ethnicity as well. we had an issue where we had students that are dominating that did fairly well in public

school. we realized we needed to reach out to students that are not taking the initiative themselves to take advantage of these opportunities. i'm curious how we can be more helpful for the puc in this type of outrage. >> -- out reached. >> we tend to have great student engineers from all over the country because we want to bring in the best and brightest to work for us. on the other hand, on the garden project, we set aside a big chunk of that specifically for the bayview. we do it in different ways to make sure that we can include people. we haven't putting community benefit requirements in our -- we have been putting community benefit requirements in our sewer service projects. we have been talking about not just building a project and leaving, but how you build that

into the educational system, offered jobs locally, buy locally. we really want to make a difference. we really do value public art, but we want to make sure that the money we have to put aside for that in our capital programs is community focussed and community-based, and that we are providing jobs for people in the arts community, not just construction jobs. the air and agricultural i -- private program, we are working with the city administrator's office to coordinate that in terms of urban africa poulter. the southeast of energy facility was built as an expansion of the southeast water treatment plant. two years ago, most of all did not even know we had anything to do with it. we are trying to make that into a real resourced for the neighborhood. we have been working with the commission and the people in the southeast community to see what services they do what and how we can offer that collectively

through the community college system and make that a revitalized community center. the contractors assistance program is a place for people that are particularly small contractors and they can come in and say, what are my opportunities with the puc, and with the view -- the dpw. they can learn how to apply for city jobs and city programs to make sure that they have jobs that can go to smaller companies. they can find out what those jobs are and have access to it. drinking water taps stations in san francisco public schools, you now have to have clean water near where all of the students eat. there is a major effort going to the school's next year to have water taps at the level with clean water to all of the students. the components of the energy efficiency programs are working

with green to make sure that as we spend this money, we spend it well. and that we have the benefit of spending it, not just that we have energy efficiency. the last slide i have is slide 12. chairperson chu: before you go into that, supervisor avalos. supervisor avalos: redevelopment was founded around job readiness, about removing barriers to employment. i would like to explore the possibility of puc helping to cover some of those costs, especially as we are preparing work force members to enter puc projects to help, perhaps, not replace the loss of funding. we need to be sure we're moving forward on projects with local residents. >> we would be happy to work with you to make sure that all of the money is going to the

right opportunities. supervisor avalos: thank you. >> on local access accomplishments, we are in compliance with local asset -- local assets -- local access ordnances. many come to the program right now, some directly, but they also come to our people input -- in customer service. not a lot of response is this last year, so we are still reaching out to asking what we can do better for those who need his services. we have translated all are important birchers into -- brochures and signage into spanish and chinese. when we're talking about grease traps and wastewater, we need to make sure that all of our people say the same kind of words is so we do not confuse people when we're talking about the needs and services we have. we have developed a complaint form. i believe we have got one

complaint, which was a translation of a brochure that we have, but that was all. we have transformed it into a workshop -- we have translated for workshops. we believe we can always do better in that area as well. >> there may be a lot of words for grease in spanish, too. >> and some are good and some are not so good. we are here to answer questions. our leadership team from the puc is ready and willing to answer questions. chairperson chu: before we go to the budget analyst support -- budget analyst report, which is specific to your budget, one of the things we wanted to go through or the bonds that are being proposed. items four through 10, one of them is actually a release of reserved. i wanted the puc to go through that.

perhaps, we can go to the budget analyst to talk through the budget as a whole and that we will talk to those items. primarily because i want to understand the relationship between the preparation and the sale. i want to understand the potential impact on these items and what the plans are for spending. there's not a lot of detail in the report about it. supervisor cohen, did you have a question? supervisor cohen: i just want to publicly go on record to acknowledge the right -- the importance of the project to the south eastern neighborhoods. i have spent a large part of last year, as well as this year, getting better educated on the technologies available when it comes to waste water treatment plant and the management of plants of that nature, and what

san francisco is in store for. it is very exciting. i also know you will be spending some time going to your commission and beginning to create a pathway for this project to move forward. i just want to encourage you to do this quickly and as sufficiently as possible. it is very critical to the neighbors, particularly those in the surrounding area that have grown accustomed to smelling the output of the treatment plant. thank you. >> thank you, supervisor, for being understanding. we realize it is not the nicest thing for a neighbor to do. we will be having a lot of hearings in june and july so that people can check our web site. chairperson chu: on the summer youth programs, we heard from a number of departments yesterday about the opportunities they that -- they provide. and the different ways they

partner with non-profit organizations and schools, etc. it is often confusing and not so centralized for residents to find out what the opportunities are. i think the mayor had announced for this summer a 5000 summer youth employment job opportunity goal. i think that includes all of the department opportunities as well. are you putting your links and opportunities through that same portal so that people have a bird's-eye view of what opportunities are available to them rather than saying, let me go to the puc or to the airport to look for those opportunities? >> i believe they are. let me turn it over to the founder of project kolk. -- project pull. >> we have been partnering with the youth.

we have been trying to coordinate with used works -- youth works with our program. the part of the problem is that we need more mentors to participate, so there's more opportunity to have replacement. we have been working with the unified school district to identify resources of that we can replace them. chairperson chu: we are making sure that we are listing the opportunities of the puc said that people can access a share portal for all departments, correct? >> correct. chairperson chu: supervisor cohen? supervisor cohen: i wanted to recharge you a little bit and they know that we have a growing database of young people that have either come in or have seen in community office hours

-- our paths have crossed and we are certainly working. if there is any other information like collateral or a brochure or other information that you have, i would appreciate you bring me by the officer we can continue to you out reached on a weekly basis. >> we will definitely come by and give you the information so that if anyone comes by, you can't point them in the right direction. -- you can point them in the right direction. chairperson chu: thank you. supervisor wiener. supervisor weiner: week finally closed the city works work force position. we have worked to make this a one-stop so people can't find the information easier.