various regulations. >> i would like to look at the real-estate man now. >> i have been waiting for a very long time for this. not just months, but years. the value is about $60 million there are five on none of of secondly, i looked to -- i am not going to say that it is light and that is money where we

do not have to utilize these properties. i ask you for a tight timeline as to whether we live at but i am going to press very hard on this, and it has been many years and if we are going to horror this is the garden for

the inherent so, we are trying to develop a e.d. hill scheduled. this is what happened before. >> 36 is today, so we could probably get something, if you would like, as we move forward. >> -- >> questions to four.

>> in assessing a two stet -- two step process. i would like to fulfill the requests. thank you. >> i just have one thing to add. in the summary letter, one thing that was not included but we got a late distribution was a letter from moscow. -- boscow. we went to one of their meetings last week. they had asked bad back, as he was leaving office, to give some box on what had been accomplished and what they have,

how they do that there way of life but it -- by the tet -- by the fed over the tenure. per acknowledgment was a very nice event >> the other communications -- event. the other communications items? >> sfgov.org -- items? >> other communications items?

>> i want you to know that these kids they are probably 10 minutes in the good. if you do not mind, i would like to stand up and if you all could just say hello to them, all of the kids. >> hello. >> welcome. [applause] all right. but i just wanted to say thank you. as you know, they have a 10 minute the attention span. they wanted to come down here and see how a city hall works. they always ask about the drinking water. we will not discuss the treatment project today, but

this is a good start and we wanted to a knowledge you all. >> thank you for bringing them. welcome. i think that learning how a city hall works is worth about 10 minutes. [applause] >> we are still working on it, right? >> i am honored to say thank you listening to everyone coming forward to express their views he will -- hopefully they will soon learn and to attend, aspiring to be in one of these seats on monday. >> moving on to the general manager. >> good afternoon. there are four items on the general managers' report.

the first is the update on the southeast facility. we can work on that verbally or go to the second item. your choice. >> a brief verbal would be great, i think. >> that afternoon. i also want to welcome our friends and visitors from district 10. as the mother of a 2-year-old, i am very impressed that they can sit for two minutes. and given the joint meeting the new law had in march, staff has been working lately with the department of public works and their architects around the designing and planning for these improvements.

today, they have completed the preliminary design for the construction, which would take place on the second floor of the building. if you are familiar, the second floor is not where you think it would be. it is the second entrance where the southeast staff will be. that wing, with that door, but be the first phase of the improvements. that will be the anchor tenant on that floor. hopefully the construction will begin in october and over four months of the department of public works will start the binding -- designing faces two through four. the idea being that the construction would happen in phases so that men.

that is where we are. we have had continuous conversations with members of the southeast commission in the community members, including the leadership at city college as well. >> when is the anticipated completion rate? >> they're looking at anything from 2014 in -- and final completion to the first phase of construction, which would allow the charter school to come in, that will be completed in the spring of 2013. they would be phenomenal in the sense of a huge improvement. in terms of modernization.

quack's part of what is working around it is the community college districts casual. >> vhs say is all that i would say, that with regards to the timeline they should be offered relocation. >> thank you. we have a follow-up on this item from mr. didoda [-- dicostra. >> commissioners, you have been to the southeast facility many times. you have heard me talk mostly about what the community wants.

today i want to stress a point that you have heard before, but i think you are not paying attention to it. when the southeast facility commission was built, if someone knows the history? the leader is adapted at that time, and i hope more today, they respected their elders. few go to the facility today and you the will hand people -- in previous years, cash, and you will see seniors who had to go through our lot to survive.

why am i here to speak on this today? if we do not have someone who understands the true history as to what transpired in that building and it is changed with a curve ball, what we do is read this respect the community. there is a lot happening in the community. our city, our mayor, the board of supervisors may think that they do not have to represent. let me finish by saying this, and i hope i do not come here too many times. today is one of the last meetings from quite good friend,

a current manager of sf news. i stated this before, i've personally requested my friend do right by the community. we do not want to do right by having some limits -- gimmicks. we wanted to have the community at the tables of the week ahead of the writ. >> thank you very much. nathaniel with the general managers' report. >> the next item has a lease update. >> good afternoon, commissioner.

first, you will recall. namely, mid-june, the contract will countered unexpected conditions while evading the temporary on the above. the contractor geologist said that these features were actually landslides that could impact temporary cuts. since that time, we have had our own consultants conducting expensive investigations and have determined that two of the three features identified could cause an issue of stability. however, and i do actually have

a graphic here, if we could transfer to the projector again? this is a graph that i showed you last time. but these are the features that actually cause an issue of stability, but only the temporary and false. the conclusion was that the feature was another landslide, confirmed that the permanent cuts designed were adequate. we also found that inactive landslides crossing the site was wider and at a different location. we concluded, based on our findings and the findings of the

consultant was that this had a different condition, per the contract. based on the findings of our consultant and contractor, according to a final cut, not the temporary one. as i mentioned last night, this will require billions in q a material, which will mean additional costs and scheduling impact's. the one positive is that we were able to get expedited approval for a temporary disposal site. we will be able to restore the cubic yards of material. our project team is working closely with a project manager

to mitigate scheduling impacts, with the goal of making some decisions. i want to keep you appraised at each meeting and the progress for these options. identifying the quantified impacts. i also wanted to bring your attention to a second issue related to the pipeline project. there are three contracts there. the third term working pipeline, the contract involved feasible descriptions for work along the alignments in the vicinity of the vernal pools, but there were no additional restrictions imposed or associated with the

permits. that impacted an additional in restricted areas, so in addition to the unanticipated bird nests that impacted the project earlier on, we had scheduling impacts. without taking immediate action, we could have project activity extending into the following year. a number of these options were sent to the general manager and assistant general manager. by transferring the schedule risks to the contractor, it was the most efficient.

the celebration costs will be in the order of $3.7 million. it is still less costly than the option of doing nothing. in the meantime, there is a change order, as time is of the essence. then there is the following seasonally year, the next year. those are definitely the largest construction issues we're dealing with right now. >> there was good news and bad news in there, in terms of cost impact. >> i do not want to speculate at this point. the other good news is that we

have potential options for being able to sell, to the extent that we could still fill the reservoir back up. if we are able to do that, the cost impact would be a lot less, obviously, than if we needed to extend it. at this point, it would be a wild guess. if that is what we are doing. all that i can say is that it will be significant. no question about that. the scheduling impact could be a matter of two months to three months. hopefully. that is the best case scenario. if we are not able to get everything done in the stable area. >> we have to get rid of that side of the mountain. there is no way out that goes down to the water treatment plant where you do not have to

get ready for next summer. >> the other good news is that there is no impact on the structural integrity of this bill like. this is the slope above. >> commissioner? >> i am good. >> thank you very much. on the good news side, we issued a few more bonds last week. commissioner? >> allow me to say a few words. on the water system improvement project. >> ok. >> what we have been doing in the bayview has been difficult. it is working on some of your projects.

there are many contractors here listening to me and it is more for them than for you, commissioners. so, again and again, when people have talked like our young people cannot step up and do something, whether it is building defenses or doing the scaffolding that is projected on your screen is when you have breakfast, our young people have been doing that. sometimes our young people go to the sites. they encounter certain things, like birds' nests, eggs. then they have to remain of of work for a couple of weeks before going back and doing good work. right now we have eight of our young people " -- working on

these sites, linked to the water system improvement project in doing a good job. they assemble at 5:30 in a place and go to the work site. union wages on average of $26 per hour. i wanted to bring this to the attention of those contractors behind me. to think abt the youth in our community, it comes from outside, they have no respect for the community. all of them want to make money, i know. but i tell you, with the water system improvement projects, we do not get much. hopefully, with this sewer system improvement project, and you are listening to me and are connected, this contractor

behind me will do their due diligence. with a water system improvement project, something that has been left out, you should know that that bond measure was done before the water system improvement project and was also for the sewer system improvement project. this commission and this city conveniently left that out. now it is time for you to do not only due diligence, but to be right, be fair. adjudicate well, so that our young people can get jobs. to many of them have died. thank you very much. >> the night -- the next item is a report on egg on sale from last week.

>> good afternoon. if i could have the overhead projector pulled up? so, as we are focusing on that, i can let you know some very good news. bond tester is once again had -- once again had an aggressive appetite. there is reporting and transparency. what we were able to accomplish last wednesday was go to market with $24 million in water and refunding bonds. what is important about that is that it was an opportunity to save ratepayers even more money. particularly the sale that achieve $1.4 million in savings. this was a successful sale that the average interest cost was 1.34%. take a moment. as we know, average inflation

alone is 3% per year. investors wanted our bonds and wanted to pay rates that were absurd. it was a very good deal representing the perspective of what has become. this was especially significant, because our bonds traded with the water district, two notches higher than our own credit ratings. two notches by s&p, which investors' desire in want. in fact, you had over- subscription of 2.5 times the amount of bonds available for sale. very good news. the take away of $1.4 million in retail bonds for the projects, the savings far exceeded your 3% hurdle of 5.8%.

it is also important to note that each time you issue bonds again, you give us the authority to do that. we see the competitive sale as the best one for the ratepayers. because of the unique nature of the bonds and the duration, that was a successful negotiation with citigroup and wells fargo. they did a very good job. >> the contra costa bonds were competitive? >> they were. this allowed us to also academically test our hypothesis as competitive or negotiating the best way to go. at least at that day and time in the marketplace, interest rates were always resetting. it shows for us that on that day it was the best for ratepayers and a testament. >> ok.

thank you. >> thank you. >> the last item is the update on community aggregation. two topics. one is an update to the program. the second is timing. i believe that the program, we have had a variety of issues talking to advocates and others about where they want money spent. we were able to go back to shell and as you recall, part of the deal was setting aside $15 million, a cap on what the city might be reliable for if there is a good-faith effort and the program does not work. that money had to be appropriated and set aside. what we change was taking $8 million out of that, leaving only a $7 million pot. $2 million would go into the operating revenue funds. $6 million could be real appropriated. the supervisor to introduce

legislation over the past week that board authorized the spending of that $6 million over the next two years. $1 million for each topic, each year. energy efficiency and conservation in city generation, if you recall those were the three areas going out for the next 10 years. as set aside, we were able to have those go forward in furtherance of the contract. so, the timing part of that item was supposed to be up this week. when i set this on the calendar, it was to bring it to your attention that it would be at the budget committee tomorrow. the mayor's office contacted us because there were a variety of things happening