energy goals, sustainable working conditions. one of the things i am excited about is to talk about how the work we do enhances our outreach and our partnership with communities around san francisco. we are creating jobs with sustainable working conditions and long term careers. i do not know if this is protocol. you'll hear from archer, perhaps our director. -- from our chair, perhaps our director. we would love to have a joint meeting at some point if your schedules permit. >> [inaudible] >> deferred to the more experienced folks. it has been a pleasure to work with all of you as an advocate. thank you. president moran: there has been some preliminary discussion between the department about

finding a date we can have a joint meeting. i think there is some interest on the commission. i am sure we will be revisiting that item. >> i am very supportive of that. there is quite a bit of overlap between our two commissions. i think it would be very timely. congratulations to your new appointment. if we could get that scheduled this fall, i think it would make a lot of sense. president moran: any other public comment on matters not before the commission? yes, sir? >> i would like to congratulate mr. kelly. i am asking the puc to invest in the community. since 80% of the sewage -- i think you do of the community.

that southeast community college is despicable. when you go inside, it looks a bit on the outside, when you go inside, it is smaller. when you go to the mission campus, it is small on the outside, it expands when you cut it again. i represent a certain young demographic. i am not the youngest, but i am still a youth. there are people in the trenches there really looking for work. but there are people like that in bayview, regardless of what you might read in the newspapers. with 80% of the sewage coming through our community, i still think you of the community. -- you owe the community.

i do not want to take up too much of your time. president moran: any other public comment? yes? welcome. >> i am here to represent myself as a young black woman and a mother of three. i need to be able to be better educated and able to support my children. i need access to low income housing. single parents do not necessarily make high wages. if i cannot go to a college where i have teachers invested in my education, and access to jobs that are paying more than minimum wage, where am i going to live? the housing in bayview is the house notes. people who were single parents

cannot afford those. i wanted to put something on your minds to take a look at. to invest in the people that live in bayview, not just the buildings. president moran: thank you. additional public comment? there is a long list of items cover in the package today. commissioners, any questions on the communications? commissioner caen: i would like to discuss the quarterly audits.

very specifically, this has been ongoing for many years, it has to do with the real estate. mission valley, crystal springs golf course. it is coated here as a yellow. it means we are working on it. i want to make sure it is not read. for years, it has been read. -- been red. >> one of the benefits of coming before you every single quarter and showing our progress is it keeps our feet to the fire to make sure we're making progress. in the case of a number of the real-estate audits, the new real-estate director has been doing very good work in trying to bring them current. you will notice also a recent audits which was recently

completed and there has been noted progress as well. he is a perfect? and no. do we have some work to do? yes. the audit director -- we will evaluate and come back to you. if we believed it is red, we will show red. there is real progress being made. >> as we discussed in last year's budget discussions, we have finished changing five of the seven staff in our real- estate group. we have replaced most of the staff and we are changing the process and procedures.

>> that is one of the things we have changed. we have upgraded the staff. different new skills that were lacking in the past. i will say this about the golf course. it is yellow now, but it will probably turn to red soon. we're talking to them at this point in time. we're not letting them slide under the table. commissioner caen: i am happy to hear that because this has been an ongoing problem. i am happy to hear that and i expect to see better colors. >> and not to underestimate the golf course >> we will come back and discuss that with you in september. president moran: on that audit report, part of what i like about the format you have

developed, that keeps old audits on there as well. it is not just the newest audits. questions on the communications? i have one on the cap-and-trade. it talks about the moneys we received from that are restricted as to what they can be used for. it projects that relate to their retail customers. how are retail customers defined? do we have enough of them? >> assistant general manager. thank you.

there is not a definition of retail in the regulations. we're interpreting it to meet our customers. anyone we serve electricity to. it has to benefit the people we serve electricity to. president moran: that enters the second question. on the memo on street cuts, i appreciate the information. i think there was a process that was an engineering question. the process makes sense as you read it, but when you travel on the street, they are not in good shape. in spite of that process, are they up to best practices for maintaining streets so that problems do not reoccur quickly?

they are done in a way that they are durable? making sure the question is understood in its broader context. >> yes. the specs are of to meeting best practices. those controlled by the department of public works, we follow their standards in restoring streets. but we have done over the past year it is paid them to restore the streets on our behalf. it should be durable. what other utilities do, they have to follow the same standards. we believe those are durable. we have been working with the department over the last year on their paving program to make sure we are coordinating.

>> the specs are right. the problem is that our contractors did some of the repaving. other people did some. the inspection was not always consistent. that is one reason we made the change. instead of -- if you're contractors do it, we may miss out on that. we switched and in steading -- we are now putting dpw to do it. they have been much more consistent way of doing it. there is still some work to be done. we're trying to make it a consistent way of doing business. president moran: is there some kind of data base that shows who did what work? >> there is. president moran: there are a lot

of streets you can point to where the work has not been durable and the condition is not good. there are people who are responsible for that. >> i bring a list to some of those meetings. >> part of the change of the standards of was how much of the street you had to restore. that has changed over the last couple of years. if you are affecting so much of the street, you have to go curb to curb. you are seeing decades of deterioration of our streets. one of the reasons why we went to dpw to take care of our restoration is if it fails, it is on them. they are the experts, they maintain the streets. >> if you have specific spaces, will be happy to look at it.

>> some seeing of the work, it s like it may be people who made cuts that were not authorized to do it. it looks as though we had paved over a street where the foundation was faulty. it's the inspection process is working and there is some kind of accountability, that can be addressed. the contract keeps somebody on the line for performance after the fact, we should be able to make things better than they are.

>> [inaudible] president moran: i could play the part of the citizen. as i drive over to my daughter's place, i go around seventh avenue, it is not good. i could put a camera out the window and take a picture. commissioner courtney: i do not know if it is possible, but that is one of the items we discussed that the voters reached the threshold of 57%. that is one of the items that puts uc workers on the streets. we see that as being an inconvenience, three lanes to one. it is jobs, it is a good honest day's work. if we're going to request data,

if there is any way at all for us to determine how many folks out we have working for those contractors, preparing those streets in particular areas, i would like to know how many residents are working for those contractors and how many of them are from 115 or whatever it is. looking at. merely asking the question could result in keeping some people honest. i am not saying people are not being honest, but it could apply some pressure. we might see a few folks picked up. those are good jobs because they move from place to place. they are longer term maintenance-type construction rate of paid jobs and i would hate to miss an opportunity. that is critically important data. even if it does not come, we should request it.

>> i think we should -- we can get that for you. >> we just completed clearing 864 blocks to be repaid in san francisco out of the 2600 that will be done over the next three years. it is an ongoing process. it is a combination of forces the department of public works has hired additional staff. it will continue to work all year round. they bring in contractors when they are doing multiple blocks in a row. all of that is information we can provide to you. the other question, we have invested in a permanent tracking system. we can track everybody working on the streets of san francisco.

we can see when the street is going to be temporarily paved or completely repaid. -- repaved. president moran: ok. my guess is some of those catches for not done by good journeymen. and it shows. any other questions on communications? moving on to other commission business. this is our first meeting since mr. kelley was appointed by the mayor, i should make acknowledgment of that. it seems somewhat redundant given the testimonies we heard earlier. it is nonetheless significant

and it is our great pleasure to welcome you as our next general manager. [applause] i am also obliged by the charter to advise that this commission voted unanimously to submit to mr. kelly's name to the mayor as required by the charter. that vote was unanimous. [applause] for item 6a, it is the extension of mr. harrington's contract to the first of september. the moving element of that was scheduling an item at the board of supervisors and that was something that we continued into

september at the request of the mayor's office. we wanted to let mr. harrington here for that. that is the item before us. are there any questions or comments from the commission? moved and seconded. public comment? >> i wanted to talk about the roads. president moran: i am sorry, just a moment. >> the road conditions. president moran: let me clear this motion off the table. and we will invite you back. we have a motion and a second. public comment on that motion? all those in favor? the motion carries unanimously. thank you.

>> commissioners, you are well aware that we had a bond for our roads. i attended a town hall meeting where all of the contractors came. the issue here, which has not been discussed is to fold. -- two-fold. for some reason, we have the city workers who are attached to an asphalt plant who do a lot of repairs to our roads. we also have one of the few cities who have our own asphalt plant in our city. nobody consults them. secondly, generally, you say,

dpw will maintain some sort of standard. happening maintain some sort of standard when the person who bid is one of the lowest bidders? how are you going to do this? he will have an inspector fault him again and again and again and get rid of him? we need to do the work by having a grid where we choose to or three contractors, but it is too late now. you have given this bid to one contractor. how are you going to maintain a certain standard?

if you travel and go to other countries or even some of the countries in united states, our roads are pathetic. the other thing is we looked into this with some focus group about machines. it does not favor san francisco because of our climate. i do not think the work, when it comes to the work force, that it favors employing too many people. that is because of the nature of the work. we need to have the -- sense you have brought this up, i have been looking at the engineering part of it because i worked at the presidio.

some of them do a shoddy job and they really do not care. thank you very much. president moran: thank you. next item is report of the general manager. mr. >> good afternoon, commissioners. two quick things before go to the agenda, the first is that we had a main break in sunnyvale this afternoon. it appears we have pretty much cleaned it up, but there were sizable large maines, some businesses. i do not believe any homes were flooded. it looks like traffic was affected in sunnyvale area, but it is mostly back. pg&e and our crews have been doing a lot of work to try to help pg&e test the pipelines.

as you might imagine, the california puc has been pressuring them to make those repairs as quickly as possible. to get a new easement where they would have to replace some of the pipe would take months. we are attempting to give them revocable permits that would allow them to start the work as quickly as possible. it does mean that we will be bringing back to you and to the board of supervisors permanent easements, but to be clear, we are giving memory vocable -- refocus it -- revocable permits

that would be easier to say no to later. one of them would be the crystal springs golf course. they're trying to replace, in one case, 39 mi. of pipe. this is a big job and they're trying to do it as fast as possible. our intent in mind to be your and our objection would be to give them reach vocable permits the -- revocable permits. >> will there be easements granted? >> there will be easements, but in this case, they just tend to be over a little bit from where the pipes were. >> there just over a little bit from -- ? >> that is the norm. >> and it is natural gas?

rex it is. -- >> is. >> my only concern is that in the course of doing this, that somebody does not create problems that did not already exist in terms of if it is in the watershed, either drainage or more exposure to reservoirs. >> we have been having that discussion of what because we have been careful not to remove the watersheds. i gather typically they do not go through the normal ceqa process because the california puc handles all of those problems. a lot of what they're doing now with ceqa is new to them. mitigation as -- is not the norm of what they're used to dealing with.

>> and as we look at ways to accommodate and safety concerns, that action gives us ways to go about doing that. commissioners, any other thoughts or comments? >> the next item up is the quarterly budget report, which is a little anticlimactic because it is the quarter ending last june. >> a very brief report today. there aren't -- four sides in your packet. this is a budgetary scorecard, much like we discussed earlier with the audit score card, and where we're seeing green lights and yellow lights and red lights. the key items are on page two on the overhead.

water use and sales were up just slightly. we had precipitation just 65% of normal. that led to fourth quarter sales that was much drier than expected. that translated into good news financially, a bit better news than what we have assumed in the previous quarterly report. that translated as well into slightly better revenues in the chief reserves and build up as well. >that dry weather meant that our revenues were somewhat lower than expected. the checking into account balance by the end of the year is about what we expected, about $300 million in the water

enterprise. and about what we expected for the third quarter for hetch hetchy because other cost savings balance out some of the other revenues. the scorecard that you look at every quarter are the key ratios in accordance with how we're doing according to the observance policy. and that is met across all three enterprises, with not only water receiving the check mark for revenues. but again, everyone is coming in healthy, as u.s. to norplant -- as you assumed in your plan. >> commissioners, any questions? >> i had one. i notice under the hetchy materials that there was half a million less power materials purchased from that project. should we read