we only have seven projects remaining in pre construction. construction has been completed on 57 of the program's 81 projects. here is a comparison of the overall cost and scheduled appearances at the program level between the last two reporting quarters. starting with the regional projects cost. we are now forecasting the cost of our regional projects to be $11.9 million more than what had been budgeted for these projects. this represents $12.9 million improvement over the forecast of the previous quarter. we currently have $144 million in the program management reserve that can cover these

overruns. a large portion of the forecasted cost increases are associated with the peninsula pipeline seismic upgrade project, which i have reported to you. we have all large forecasted increase in the habitat program. on the local program side, we are forecasting a $21.8 million underrun, which represents an improvement of 20 million in additional savings from the previous quarter. the regional program is still forecasted to be completed by the approved completion date of july 2016 and on the local program, we are forecasting 2.3 month delay over the approved completion date of mid-2015. these forecasts do not take into account some of the recent challenges we have encountered at the calaveras dam project.

this is the cost trend chart that i shared with you every quarter. the forecasted program cost shown in blue still trend much lower than the total program budget, which is shown in red. the program management reserve balance of 144 million is the same as it was the previous quarter, but that balance will change in coming months as we have $20 million in additional savings to move to the program management reserve and those savings realized from the issued the contract for the seismic upgrade. the savings will be partially offset by funds that will be moved out of the reserves to

cover some of the additional contract that this commission has approved during the reporting quarter. we're planning to seek approval from the board of supervisor budget committee for these changes to the program management reserve sometime in september. those requests will be based on the status of the program at the time. i have reported in the past month some unexpected conditions at the calaveras dam project. the geologic features were observed. our team of engineers and geologists are continuing to pursue additional exploration to better characterize the nature and impact of these features. unfortunately, it appears that the latest findings show the impact from the project will actually be more significant

than we first anticipated. we learned last week that the permanent will have to be modified. it would require the removal and disposal of a lot of additional material. furthermore, we also discovered a new deal logic feature that is not in our contract document between observation hill and hill 1000. we have been hesitant to speculate on the exact cost and scheduling tax because we are still conducting additional investigation and those will not be completed for another three- four weeks. given what we learned last week, and given the significance of what is ahead of us, we thought it was important to inform you and give you a better idea of the impacts your looking at it.

on the cost side, the impacts are likely to be at least $60 million. the impact on schedule would be at least a year. like i said, we are still conducting work. those are the worst impacts on the program since the inception of the program. we are not pleased about that. i am personally involved with our project team and consultants and contractors to closely monitor what our options are. i am keeping upper management apprised on a regular basis. we are still very early on on this project. it is only 20% complete. there are other large risk areas that could have further impacts. >> that would definitely affect -- >> it would reduce significantly

the amount of available money in the reserve. it will not push us over the overall cost of the program, but that nice reserve of $144 million will be significantly eroded. we are now a accelerating work on the eastern segment of the pipeline system project in an effort to meet permitting deadline of october 21 -- october 31. you will recall that we chose to accelerate that work to make sure we make that deadline. we will incur cost to do that, but those costs are lower than just allowing the project to

continue through the next allowable seasonal window, which will begin next may. the accelerated work is proceeding as planned and we are confident we will be able to complete all pipeline work by the deadline of october 31 as long as we do not encounter any unanticipated challenges. the schedule has already then impacted -- already been impacted by significant events of bird nesting. we're keeping our fingers crossed. the progress on the bay tunnel continues to be excellent. we are 60% complete. we are 3.25 miles in the bag. since the beginning, we have achieved 100 feet per day. we recently had a few records of

days where we have been able to double the production and achieve more than 200 feet in one day. last week, we started excavation of the shaft on the east side of the tunnel. we are on track to complete the project by the end of 2015. after 13 months of digging, miners from two different headings that underground and achieved on the segment of the tunnel. we also continue to make good progress on the other side despite continued difficult conditions. last week, we reached 10,300 feet of tunnel excavated out of 18,600 feet. we are starting to install the final pipeline between --

pipelining. last project i wanted to update you on. that facility has been operational for more than a year, we recently received certification for this facility. in their letter to us, they announced its as an example of sustainable design. the interesting thing is that this certification did not include the solar panels shown here. the contract only required silver certification. if we wanted to pursue gold certification, it would be an easy thing to do. we're trying to keep our costs down. that is the story of there. i would be happy to answer any questions you may have.

president moran: commissioners? ++ calaveras situation is clearly a major. i reviewed the various resources we have. we're looking at the geologic data. it is a difficult circumstance and one that you know there is risks. i think it is not a good news, but where there is good news, i think we are in a -- i think we

are appropriately on top of that. >> they are the best we have on the program. i would like to also mention that i -- i gave for a briefing and we will invite some of the representatives to decide and give them further information. we're keeping our regional partners very much informed. president moran: one of the aspects of extending the completion date, that extends -- i know there has been a lot of concern to make sure we maintain schedules in order to minimize the risk of seismic and vulnerability. this is not that kind of a project. this is a supply project.

the seismic vulnerability was taken care of. we're trying to restore the water supply impact of that. this does not put us at any extended risk. other projects do present that kind of a risk. >> the model shows that in the event of the calaveras dam earthquake, the project -- the system would be sustained. you are absolutely correct. we lowered level, the way the program is devised that source would not be required in the event of a calaveras event. that is the events -- >> we went out there last month

to take a look. it is a stunning sight. you get a real sense of what is going on when you see some of the ancient, we will be taking out -- people out in early september. we would be happy to include you. it is an amazing work. we have had some problems. that seems to have calmed down. the bay tunnel has gone quite well. the calaveras dam is a problem. it is one that is taking up a lot of our concern. the other item, we had a bond

sale this morning. >> good afternoon. the good news does continue on the financial side of things. borrowing money is still very cheap because there is a lot of maturity. the city sold geo-bonds. seismic upgrade to the general city facilities. we achieved a 2.7% rate for a 20-year bond. 38.4 million was sold this morning in addition to $252 million for san francisco general hospital. just short of a million dollars a year would be savings for taxpayers for the auxiliary water supply system.

it is very big news and a continuation of what you have heard recently. happy to answer any questions. >> this will have an impact on the rate issue? >> this is the one unique part of the capital plan portfolio that is covered by the property tax bill. voters put it on the property tax bill as opposed to the water bill. >> we will have a comparable study to see where there have been some incidental or other savings by implication? >> this one will show up by allowing the property tax payers to have a less expensive property tax bill. what happens in the case of general obligation bonds -- >> i want to make the connection

so the ratepayer knows other areas which benefit the ratepayer. >> every year, there is a one- page pamphlet to show how the property tax dollars are allocated. the portion that would find the fire system will be lower cost. that is the next time the san franciscans would see the savings. >> we need to repeat that as often as possible. >> the water supply system is being maintained at a much higher level than it was before. the fire department had so many budget cuts, there were not able to spend the time and effort. with this bond, we have done some improvements.

people will start seeing a lot of work in the city. >> thank you. president moran: public comment on the general managers' report? >> commissioners, when we have the inauguration of the 535 golden gate building, i was present. i made some preliminary remarks to all of your commissioners. from time to time, when you read that book, one of the most important things is the mission of the sfpuc. we must pay attention to the

mission. water, electricity, this, that, and the other. there is a very important word towards the end. diversity. in all of these reports somehow we have to figure out from access to the software or this program cultivation and what happens on the other projects how diversity is addressed in this county and city of san francisco. job diversity, other diversity, quality of life issues, how it is addressed. now soon, having finished the water system improvement project, we're going to be addressing these jurors system

project and if we have not paid attention to the improvement of the outreach, trying to reinvent the bill twice over, dividing it into three parts, if we have not paid attention to that, if we have not paid attention to the empirical data, how can the jobs be performed with the water system improvement project? and if we do not put into place the agreement with these jobs, then we will have been doing ourselves an injustice. we have to have the training, not city bills and all of this other. i know about it because i live in a federal system. and i do not want to pontificate. the unions have to step up. this is a union city. [bell]

the unions died. they were shot by the police department. they died. blood was spilled. it has to be incorporated into whatever we tie into our projects in one way or the other too many crimes are having it too good in san francisco under large projects. we need to be considerate in san francisco of the projects. thank you very much. [bell] >> any other public comment? eakseeing none, please call the consent calendar. >> consent calendar, approve modification #148 total contract amount of 38,736,000 two hundred 90 four dollars and with a time extension of two hundred 36 calendar days and with a payment operation amount of

$756,000. an improvement of the upgrade, improve modification #3, decreasing the contract by $178,000. a total contract amount of 200 -- 2 million, four hundred $43,000. -- $2,443,000. a payment for -- a payment extension of 63 calendar days and with a total contract duration of 316 calendar days. and and approved contract in the amount of $2,206,000 of which 1 million two hundred $18,000 is

funded by waste water enterprise and 988,000 is funded by department of public works to the lowest responsible bidder. and contracts to risk -- to repair existing sewer piping at locations to be determined throughout san francisco for a total contract not to exceed $5,153,000. to the lowest qualified and responsible bidder. authorization to allow general management to execute a beat -- execute a lease in alameda county for cellular communications site for an annual range of $54,000 with annual cpi increases, and with a lease duration of five years.

and awarding of the contract for waste water enterprise facility improvement contract number one in the amount of $6,378,000 to the lowest qualified responsible and responsive better. -- bidder. >> commissioners, any item that needs to be pulled from the consent calendar? if not, can i have a motion? gregg's moved. greg second. >> moved and seconded. all in favor? consent calendar passes. item #9. >> authorize the general manager to execute an impact agreement with north star short -- solar, or acquiring north stars solar to pay the mitigation impacts to interconnection of north star's generating connection to the grade and authorizing them to

enter into substantial agreements with other projects. >> commissioners, you have in the packet you receive today revised resolution for item 9. >> i'm the assistant general manager for water, again. this is one of the agreements that we will potentially be entering into over the next several months or year or two for projects that are proposed to generate electricity in connection to the transmission grid under the new regulatory system. there's a lot of concern about how new projects might disrupt the grid. people have to be able to protect their systems from any disruption that happens from news sources coming into the grid. we have currently worked with about 15 developers for about 41 different projects that might have an impact on our system as they connect to the grade.

we estimate the total cost of the mitigation efforts, which is the transformers and switches to be about $28 million. we will be allocating those costs to all of the projects in connection to the grade. these are project proposals, but they may not all be built. we still need to allocate the costs of this writing projects ++this is an exampy

all of these will be looking over time. when they are in excess of $1 million they need to go to the board of supervisors for book -- for approval. we are recommending that you approve this and then going forward with future agreements, they will be similar in nature to this with other projects. we will keep you apprised of those as they come along. and the change noted is the addition of one small phrase relative to the appropriation of funds. >> commissioners, any questions? >> is there any information you can give us about the background of north star solar? are they a local firm? have they complied with any of the ordinance is that we require a local hiring component? have there been any other issues that might be important for us to take up here? i am not familiar with that firm. >> i do not know exactly what we know about north star solar. do you have information on that front? >> the leading i have is that the project they're doing it in the central valley. -- the only thing i have is the project that they are doing is in central valley.

it is not in san francisco. they are requiring them to pay as money to mitigate the impact on the great out there so that they would not fall within san francisco contracting procedures for solar and deletions in san francisco. -- installations in san francisco. >> with a fall in the jurisdiction? >> they are not ours, so they would not apply. before our project, we're actually getting money to do other things. how we spend the money we get from them would be subject to all the different procedures within the city. but their project to build our project. it is not on our property. in fact, it does not even use our lines. but it does have the potential

to impact the security delivery of power. that is why they have to pay money in mitigation to us. >> thank you. commissioners? >any public comment? seeing none, could i have a motion. >> so moved. >> and a second? >> did you get a second? >> know, i have a motion, but the second. -- no second. gregg's you can second. >> i note -- >> you can second. >> i know i can. >> second. >> all in favor? all opposed? item carries. item 10. >> an agreement with seven bay area water agencies for an amount not to exceed seven

$25,000 per year. -- $725,000 per year. a permit for portable water discharges to be issued by california water regional quality control board. >> mr. rickie? >> this is basically where we and other water agencies occasionally have discharged from our water system that contain things we do not want in our water, such as chloramines. we actually have to get a discharge permit for that. all of this would operate under a general permit that the quality control board would issue. we are collectively cost sharing the cost of a regulator to permit -- to prepare the permit the documents. our share of that is $50,000 over two years. >> any questions by the commission? commission? any public comment?