are in a better position to know how to talk about it. >> thank you. >> todd. >> todd is ready with his green approach with his bow ties. >> happy holidays first offal. todd rydstrom, general manager and cfo. i prepared the budget package and the most important part is about three pages worth. this is the time of the year when we come to you looking for insig insight. what you want to hear in budget meetings and the mayor has met with all department heads as well as cfos. and has given budget instructions to departments. i am pleased to announce that our department has a balanced budget. and you adopted and put forward

that two-year budget. and we will go through the budget and visit key assumptions, and come back and share 10 year of projected impacts and 10 years of capital needs. still some big things to talk about. but it won't be the usual line item by line item analysis you have done in the past. what it does is afford us the opportunity to take a higher-level look at what the adopted budget is. it's just a little short of $1 billion, $899 million. and that includes the enterprise and waste water, hetch hetchy. this is on the slides for the viewing audience. and commissioners can you see on

your monitors. as you propose and the mayor's office concurred and the board adopted. our budget has the key changes of capital. and the key changes are $70 million of capital investment starting in july. everything else is a small change. >> are you able to project the capital debt on the bonds? >> we are. >> you have it at 42.7, do you see that number changing in the future? >> we hope it will come down by a few million dollars. and the authorization you made for the approval of refunding of waste water bonds, before the board of supervisors today, could save a couple of millions.

>> that's the real question, two million saved? >> yes, per year. so some projections before you will be of good news. >> this is debt service on what bonds? >> we have nearly $6 million of outstanding bonds now. large numbers. >> those rates are phenomenal. >> thank you, we have done very well by the rate payor. some key sustainable goals you have asked us to look at. we will assume those continue to be what you ask us to consider. in addition to what you have previously said some of your key policy initiatives. utility operations, sustainability, conservation and

to be a good utility and partner. and the considerations here are listed. they are basically very familiar, a number are the policy documents you adopted as a commission, including environmental justice and stewardship and the policy technology adopted. what does this mean and how do we make the mid-cycle review helpful to you. one idea we had is to come before you and give you detailed updates to the capital plan. and the general manager and i and the deputy general manager think this may be helpful to get this in addition to the quarterly ones for the big

programs. this could include updates for deferred or emerging projects. and it could include how those key investments, and there is nearly $7 billion of them over the next 10 years, how that is incorporating the good analytical points of the technology policy and the technology delivery systems of those projects. and to the funding sources that you will hear in item 10, and we will update you on those as well. the other idea we had, that we could come back and give you updates on your key policies. the investments you asked us to make on your behalf and the rate payor's behalf, and the key policies of which ones you would

like us to highlight and bring back to you. and lastly, and then i will be quiet and listen to all your input. is to the degree you would want to have the controller's office present and you to give your remarks on your vision of how our report card that was recently adopted as the rate payor insurance policy, how you as a commission would like to see that developed and independently reviewed and assessed by the controller's office. with that i will listen and thank you for your comments. >> no changes to the budget schedule? >> no changes, and we are on track to meet all of those. >> all right, mr. moran. >> thank you, mr. president. this is going to be interesting. we never had a two-year budget before. we never had the option of not going through the budget line by line, the way we do. which is kind of exciting.

and what you would like to do -- i tell you what my two interests are in that kind of unburdened review. first is to take a fairly high-level look at what the -- i think of it as the business plan for the three enterprises, and expressed in the capital program. and for each there are changes that we need to take note of. i am thinking especially in the water enterprise, it looks as though that boska is going to be able to issue that, which will change some of the rate profile we are looking at in an important way. clean water system, we are

looking at a program that we now have give tentative approval to. and that along with the water department has changed the rate profile that we were so concerned about a year ago. and i think it would be important to understand that and discuss it. perhaps the biggest one, and this goes to what visioner eer commissioner vietor was saying, the power enterprise. we were concerned about the need to raise our municipal power rates. and we did and that changed the fundamental picture. and we have a cca program that has different burdens placed on it as a result of the board of supervisors. it's important for us to see how those changes are reflected in the financial program.

and last year in order to make the power enterprise balance, we took a whole bunch of capital program and put it beyond 10 years. which is not to ignore it, but said we would spend money in prolonging the life of transition, specifically, that would allow us to defer beyond the 10 years in the plan. we need to keep an eye on that, and see what the smartest way of dealing with that known need. which currently falls off the edge of the page. and i think the go-solar issues fit in this as well. but it's an opportunity to take a high-level look at the major drivers of the business plan for each enterprise. see what those long planned

trends are and to assess the power rates. that's one interest. and the other interest, we have adopted a bunch of policy. i think it would be helpful to get an assessment of how we are doing on that. and each policy that we pass is really cheap when we pass it. and to implement takes work of staff and some is funded and some is not. it would be interesting to have a policy level review of how we think the organization is performing against the policy objectives over the years. and you named the policies. those are my two areas of interest.. >> when would you like to see those review? >> in january and february time frame, where we get into the budget. and we have freedom to do it in that time frame. i hope we could do it as part of

the regular meeting schedule. we are getting pretty efficient in running these meetings. and i think we have created some time in the meeting slots that we don't have to do workshops. but i think we need to make time to have a thoughtful discussion in those areas. >> both this commission and the state legislature on a road to recovery, for the first time that the legislature will take up a two-year budget. and interesting to see how they will operate in that scenario. commissioner. >> yeah, i want to echo, i actually think, i don't want another meeting either. if we can do it in the context of these meetings, i think it would be great. but i think we want to have a mid-cycle conversation targeted on these things. and this capital piece as well,

because things change and perhaps capital needs that we put out 10 years and need a closer look. and without a course correction it's important to take a high-level view without going line by line of the budget. and someone will have to give here because this is happening. or maybe this cca budget piece could be a bit of a drive or two. and how that shifted the dollars around. and i like the idea, of this strategic goals and updates and key policy initiative updates. i don't really know what that means, maybe we can get specific on what an update looks like. which goal has fallen short. or maybe a redefinition that you provide in advance, forgotten some definitions of goals. and maybe a quick review, are we making progress or not.

maybe a simple indicator, up or down. but to get our feedback to understand what you need to keep those goals and initiatives moving forward. those would be what i hope for in somewhat structured mid-cycle review. >> if i may through the chair, a question to commissioner vietor, in the past you have given up additional initiatives or changed them. and this is to the degree that you have a new initiative that you want us to slice and dice the budget in that way. >> and maybe contextualize the review, and have the opportunity to add and delete, and an opportunity to say, is this still right. and if it is right, have we made progress or not, and why not. >> okay. commissioner moran. >> one other thing, you

mentioned the score card activity. and that kind of came out of the rate-payor insurance policy. what i intended in that, that policy has a bunch of specific things that we said we would do. and i was hoping for some way to come back and say, okay, we need to be able to certify it our rate payors that we are doing what we said we were doing. that's a little different than a score card. it's more general, did you serve water to all customers. very high-level stuff. i want to be sure that we don't lose track in the policy direction that we gave to the department. we were very specific. maybe it's an audit opposed to a

score card. of the things that we said were important, how are we doing against those things. it may be good to have a score card, but i don't want to lose track of policies specific. >> that got me thinking too, there are things that maybe we are not tracking that came up in the last year. aside from the capital but these policy initiatives. whether a water bond of 2014 and what the implications for that might be. or some fsip development that we have gone through over the past years. and the implications. what are these outliers that are not embedded in our current budgeting or planning. that we should at least have the radar even if not a part of the

two-year budget cycle. >> what do you envision this to be? when you think a score card, what do you envision? >> i think we owe it to our rate payors to show in a simple, concise way, just like the city has done on the street score card and the parks score card. to have a look and the department is happy to assist the city. to succinctly give the people the additional trust and we are spending their money wisely. there is a different story to tell, and oftentimes us telling it is not as an independent auditor. >> and sometimes at the risk of independent auditor it becomes

unintelligentable. so let's move forward and see what we can produce. any other comments? >> i make a quick comment, when we talk about policy, there may be multiple things that fall under a policy that. we can have score cards. when we talk about community benefits, there are so many things we are doing to apply a score card of how we are performing in each category. it could be a combination, of policy and break down the activities and apply a score card against each one of them. >> did you want to intervene at this point? or at a later point on item 7? >> this is the right time. >> okay. >> like a segue. what i feel is when we describe some of these policies, sometimes we forget the history.

for example, when the (inaudible) act was written, certain entities were supposed to be given a break. municipalities. the military. the military is gone down. public housing. somewhere along the line somebody took control of public housing, and charged them money. before they were getting things for free. not once have i heard that discussion. somewhere along the line like the city of san francisco makes a lot of money. yet they continue to get a break. and i can go on and on and on. what i am trying to say here is, we need to be fair to the rate payor. and we also need to show the rate payor in which areas we do

their bidding. and not just going on increasing their rate and make it one-sided. i hope i am very clear on this. i was just talking to a gentleman that runs a laundry mat, and he wants to close his business because he can't keep up are the high rates. if they go to public housing, it's a shame whoever the entity is, and in this case i think it's pg & e, and i don't know how they got in it. charge people 150 or $160 a month. now you commissioners have to find out if at one time there were no meters. i repeat no meters in public housing. suddenly how, who it is

providing the energy and why are they charged so much. now one reason may be this. you have living in a unit and the windows are broken or they feel very cold. and there are some elderly people or people that need heat, they are going to use the heater and whatever just to keep warm. and then the issue arises about -- two issues arise. first the larger amount of money they have to pay. and secondly who is monitoring whether they have some area where they leave. where it's windy and no conservation. we make deliberations about this, that and the other. and many times we fail to go to the source it find out if those

mandates are kept. >> i done see your card. >> good afternoon, commissioners, eric brooks, san francisco green party and the local grassroots organization in our city. i want to spin on mrs. hale's update on cleanpowersf. talking about the briefing that local power will give on january 22 about their work on the local build down. i think you have heard in the past hearings that i and others have said what they have developed in a financial model to get the entire power that advocates are asking for. and putting out in the same price by pg & e and by the locals in the first years of the

program. but however the exciting new news in the latest stakeholder meeting between local power and sfsgu and advocates. local power after heard from a lot of us, and after saying, listen, what you are putting together is good. but we have an issue that commissioner caen raised, pg & e is going to roll out their green program at a $6 premium. and it's lower than the 10-20. and hearing the comments from us and staff, local power developed a new model based on its previous models. that model will use renewable energy credits at the same level they are used in morion county.

and something that environmentalists weren't thrilled about using credits. however local power has worked credits and worked through hetch hetchy power sold outside of the city. what it's showing now that we can do the build-out of several hundred megawatts in the first years. and hire 27 workers a year, i think that's total job, i don't know about direct jobs. probably several hundred direct jobs. and it will also using the renewable energy credits actually be able to roll out this entire program. as we originally envisioned several years ago. to get to large-scale local renewab renewables, and to offer all customers in five years, 100% green, just like pg & e will

offer. but at the same rates that pg & e is charging now. when pg & e go with their fancy green option, we are charged less. and that's why we need to see what is presented in january. >> comments. >> maybe for todd or barbara. i am interested to hear, and i know that local power has been working hard to present this financial model. and i know that the great promise moving into this cca is to do the local build-out to be energy independent and create our own renewable power sources for the communities that need it the most. and that's why i was asking for this bigger picture conversation. because it all kind of fits

together. and i don't quite have understanding if the rate hearing on friday and presented with a new structure in january, and that's the same time we hear about the financial piece. and i don't know if you reviewed the financial information and now is not the time, we don't have it agendaized. and that's the comment to barbara hale, we need all of this information together so we can make an informed decision. and especially with the rates, and this local power seems viable, and that's what we hold up as the competition to pg & e and what it looks like and the communication strategy. i don't know when that conversation is going to happen for us to make an informed decision on the next step for the cleanpowersf program. >> to put into context, to tee

things up so you have the available information for your late january deliberations. your hearing from the rate board and review of the staff proposal. and to lead up to that, for example, this friday, the rate fairness board is getting a presentation from local power. that is also an additional presentation of the one they have seen. where staff went through the existing cleanpowersf program as you envisioned it and how the mayor's office directed us to move forward. now we are doing that at the rate fairness board venue. and review those lpi business assumptions. you will go through and walk through what our questions and concerns, and follow up and request of the contractor.

so that by the time it comes to you it's really more flushed out. also in january, one of the deliverables that they owe us is the sighting analysis. that's pretty important. one key assumption for example, and not to get into too much detail. >> i think you should get in detail in writing form to us. i think you have a sense where we are coming from. but i think it will be helpful to get in writing the deliverables so we can measure those what is appropriate and if they are timely. >> thank you, and we present that on friday. >> the rate board and come before us with that presentation. >> happy to do that. >> one other thing we could do at the next commission meeting that we always give an update. we can present the outcome of that presentation and kind of give the presentation we gave to them with their input or

comments. >> by the end of the>> -- end of the year? >> okay. >> that way for those who want to read over the holidays have something to read. >> you almost said that with a straight face. >> i know, but i am anxious to get to green test bed. >> up next. barbara hale. >> barbara hale, assistance general manager for power. thank you for your enthusiasias for the concept. as you know the commission adopted for the green test bed. the board granted that plan. we have concepts on the green test bed. and that's what is summarized in

the memo provided to you. we are testing a light weight solar system because we have the system and invertor and capacity. we tested that technology on the roof of musconnie. the firm we are working with allowed us to see what are the business relationships we need to implement on more broad scale green test bed. this is the first effort of proof of concept. it dovetails with the mayor's office of innovation and economic development. we are partnering with them to look at other areas to have