>> commission will come to order. madam secretary, if you'll call the roll. >> president torres? >> here. >> vice president courtney? >> here. >> commissioner moran? >> here. >> commissioner vietor is on her way and commissioner caen is excused from today's meeting. >> all right, we have a quorum. approval of the minutes. i know on page 10, i know commissioner vietor wanted to correct that as well. we can look at that.

>> is there a correction? >> yes, on page 10, i believe, of the minutes. there's some phraseology which

i know commissioner vietor had. -- referenced. can we put off the minutes until she returns? >> yes. >> why don't we do that. i wanted to make sure she had an opportunity to make a comment. public comments, please. francisco dicosta. you wanted to talk on item 4? i have two comments. >> okay, public comment is now. commissioners, i want to talk on a number of [speaker not understood] issues. so, i attended a meeting, it's a committee that kind of evaluates the bond measure and the bonds and how they are spent . and i paid very careful attention to that presentation.

and i think, really, we need to have better outreach so that the public can attend these meetings. now, i know that there is something -- they always say go to the backside. not everybody can go to the website * . and, so, we need to the cac's, the citizens advisory committee to do some outreach so that it's some meaningful deliberations at these meetings. some of the presentations there are not becoming and i'll leave it at that. the second thing is some weeks ago i was here when two people came here and they started -- they are not from san francisco -- and they started talking about how -- a contracting business. and commissioners were in a

flux, because a lot of things are happening here which you commissioners yourselves are not aware of fully. you are aware of in a very general way. a lot of the responsibilities that once were before -- the human rights commission are now transferred to the city administrator and the city administrator cannot do what was in the hrc's domain for years and years in just a few weeks. so, these are being fine tuned. so, i did attend a very important committee meeting that deals with the contractors . and i am, because of my military training and my jesuit training, [speaker not understood] operating standards and standard. i do not believe processes -- people circumvent the processes. i don't believe in that, and i'm going to take a stand.

so, at one of the earlier meetings some weeks ago, one of the employees who works for the hrc but is paid by sfpuc came here and made some statements that were not correct. and when i was attending that meeting, according to the process, i did not see the members who were there, and one of those members is here. i did not see the process brought to this committee correctly. so, i'm just going to speak about this. i've written an article and i'm going to write another one on this. but, commissioners, i attend this meeting so that we have some standard and we follow processes. thank you very much. >> excuse me, did you say jesuit training? yes. >> do you have a candidate for pope? oh, yes, oh, yes. [laughter] >> bear with me, at the appropriate time. i chatted with you when the white smoke goes up. [laughter]

>> well put. any other public comments? i have many requests for specific items, but if you have a public comment generally, please come forward now. welcome. good afternoon, david pilpow. just two brief items under general public comment. first, on the cover i haven't seen a yellow cover in a long time. i hope we're going back to blue and this was just a one-time thing. the last time we used yellow for the cover was when the commission sat in 1988 to consider the sales tax plan for transportation and it was a special color that we used just for that occasion because normally we use blue. >> i'm looking forward to red for valentine's day. we already use pink for the minutes. >> we ran out of blue. okay, and blue is very important to this agency, so, you know. >> i'm learning every day what's important to this agency. interest you go. >> use red for the budget. yes, the budget we don't want to be.

my other comment was related to employee conduct. there was an article in yesterday's paper about employee conduct that's inappropriate and that staff is taking that very seriously. i believe that is true. i believe with an agency this big spread over as many counties that we are that it is entirely possible that people occasionally do the wrong thing. but i know that things are taken very seriously in hr and elsewhere within the organization where something is found, it is corrected. and when there are internal controls to be fixed, nancy and todd and the rest of the gang take care of that. and i have very good faith in the organization to take care of employee conduct. so, i did want to make a note of that and my support for the process moving forward. >> well, let me assure you that i have been intimately informed about the process and making sure that it was done thanks to the general manager here. but also as you know, we can't discuss these issues by definition because of personnel privacy concerns. that's all i wanted to say. thank you very much. >> anyone else on general comments?

public comments? all right. we'll move back to the minutes. i know that commissioner vietor had a comment she wanted to make on some of the language. >> i do. thank you, president torres. on page 10 of the minutes, master page 10, i don't know what page it is of the minutes, but item number 13, there is a sentence that says, ms. a.m. breauxtionth stated she doesn't believe the amendment does president create a risk of liability. * i don't think that's correct. i believe ms. ambrose said she did believe it would create a risk of liability. i just wanted to make sure it's correctly reflected in the minutes. ms. ambrose, are you following me?

>> [speaker not understood] ambrose, deputy city attorney. thank you for pointing it out. i believe my comment was it would not create a risk of liability. >> great. so, i would like to amend the minutes to reflect that, please. >> without objection, that shall be the order. any other comments on the minutes before we move to a motion to approve? * as amended? all right, there is there a motion? he moved. >> seconded. >> moved and seconded. to approve the minutes as amended please signify by saying aye. >> aye. >> opposed? the motion is carried. we'll move on to communications. any comments there? >> thank you, two comments. first the water supply level of service report that was reissued. that was something that we had requested at our december

meeting and i appreciate that report being revised as we had discussed. it says some important things. it says that in our current state of planning -- and i should emphasize that phrase -- our current state of planning, we don't see that there is enough water in the system to make our interruptible customers permanent or to provide wholesale customers water above 184, or to increase their supply assurance. and that's i think the first time that we have stated that and documented it as clearly as we have. the second part of the request in december was to schedule some time with the commission where we could discuss that and discuss what san francisco was doing to address the supply issues, and also to coordinate that presentation with bosca in terms of what they are doing and how they look at the situation.

so, number one, thank you for the reissued report. i think it's an important revision. and number two, i'd like to request or renew my request that we come forward with a session that involves both staff and bosca to discuss the import of [inaudible]. check and comment on communications is the report on the various audits. * second comment i continue to be pleased and impressed and frankly amazed at the degree to which we have put in place a rigorous and highly visible and transparent audit program. hugely, hugely important. we're going to be talking about the kind of rate increases that we are going to ask the people of san francisco to pay over the next 10 and more years, and our ability to do that frankly hinges on transparency and integrity.

and i think these audits contribute to that. there are some things in there that need attention. that's why we do the audits, and i know the general manager has been involved in making sure that the right questions are being asked and following up when we get answers that perhaps we don't like. so, i say that by way of emphasizing the importance of that process generally and the importance of making sure that we follow-up vigorously and take those findings seriously, as i know we do. >> do you have a comment, general manager? >> no, i definitely will facilitate a meeting and make that happen. >> all right. since we opened item 5k, we have james gardner who would like to comment on item 5k. mr. gardner. i'm james gardner with southwest construction. i graduated from san francisco state in '84 and i've worked in san francisco ever since. i work for two other general contractors prior to my wife and i opening up our own

construction firm. it took us a few years to become an lbe and then a few years after that we finally got a job with san francisco under the job program. we've done a lot of work, probably 70 task orders to date under the job program. one specific one that i want to speak about is the fog frame, fat only grease program which to us still is a small job. half of the job is purchasing two tanks which we bought in nevada and had shipped here to be installed at the southeast plant. that gave our small company a lot of experience in the energy business and we use that past performance to get a federal project with the gsa, putting the first biomass boiler in a

gsa-owned federal building which was actually a $5 million contract, a very large contract. that type of experience and past performance that we got as an lbelj contractor has gotten us a tremendous amount of work elsewhere and given us a lot of experience. and if you know anyone who does federal work, they require the past performance or they'll kick you out of the job even if you're the low bidder. and that was -- that got us into the energy business or construction business, anyway, and kept us going during some rough economic times. the specific comment to the jock group oversight, i've had within those 70 task orders 70%

success. with the 5% that's been difficult, the jock managers have all come almost immediately to any request we've had to resolve disputes we've had with managers in the specific sites, whether it be in hetch hetchy or in [speaker not understood] or at one of those plants locally here, southeast plant, oceanside plant. we've worked almost everywhere i think at this point. and they've been very fair both places obviously, towards the san francisco side, but like i mentioned earlier, i've been in the construction industry since i got out of college, working for two other firms in san francisco prior to [inaudible]. and at no time have i ever seen more oversight than the jobs that we have at the joc. and i have thousands of e-mails

to prove it if necessary. but i do appreciate the work and i appreciate the time for me to speak here. >> thank you very much. and good luck, continued good luck with you and your wife. thank you. >> mr. [speaker not understood]. on item 5k. welcome to the commission. thank you, commissioner. my name is miguel [speaker not understood]. i'm the owner of yerba buena engineering construction. we employ about 100 employees here in san francisco and have been performing joc work personally for 25 years in five different states. and i had the pleasure of reading the audit report from the controller's office and with all due respect i wanted to share my opinion of the audit and some of the issues and concerns that i had regarding the audit results. in general, i took their

executive summary and just looked at it and kind of highlighted their points. so, i'm referring to their executive summary on the first page. when you look at their highlights of four task orders that they found to have exceeded the $400,000, i might point out that that's out of 859 task orders. so, it's 1/,000 of a percent that exceeded contractual limit. it seems fairly minuscule to put high on your executive summary. the two, the price issue is contrary to the job program. number one, it's fundamental to joc. i might alluded to a city agency for asking a specific carpet. because of the proprietary nature of pricing in the book, they cannot use vendors specifically -- it would create

a proprietary situation where people are paying to get in the book. so, hence if a city agency wants a specific carpet, they have to ask for that specific carpet which means it's not necessarily in the book, which means that me as a contractor, we normally have to submit a [speaker not understood] price, which usually reduces my margin, because my margins are usually set by a coefficient that i have in the book. and the [speaker not understood] price actually lowers my price that i'm actually reimbursed by the city for that. so, actually having nonpre-price gives the city what they prefer at a lower margin. and i think that's important enough it's not reflected in the audit. number two, i think there's a point made that the selection process of using joc contractors is arbitrary. and i think understanding how the joc program works, it's a performance based contract. either you perform or you don't. if you perform, you get more work. and i think that's real important to understand.

number two, there's another point about the low bid and how they're selected and whether there should be some type of pre-qualification. i think the fact that joc is a performance based contract lends it to itself if you are low bidder which is actually the only way the city charter says you can actually get work in construction by being low bidder, if you get the job, you're not excluded from competing. and, so, you build your capacity [speaker not understood]. that's what we're here for. thank you again for the opportunity. >> just a question. on the low margin issue, are you saying you negotiate a contract with the puc and then they come back with an amendment because they change their mind about the kind of carpet they wanted? no, the scope of the work is undefined. so, when you do civil work, a rock is a rock is a rock. it doesn't have a brand name. so, it's very simple to pre-price rock and concrete and pipe. but when you get inside the building and you say you're going to get a light fixture,

what kind of light fixture? i want that light fixture. that light fixture is not in the book. so, i have to go out and solicit that specific light fixture and tell you exactly what the price of that light fixture is and then it's predetermined how much markup i can get for pricing that book out. so, it's -- it gives the flexibility to the city to pick what they want specifically for their need. which is very typical -- >> so, the person that's losing that relationship is the vendor, not the city. that is correct, yes. also, if you don't mind, i might also point out that the joc program, to the credit of the leadership of puc, out of 100 million -- this is information that's not necessarily in the report, but there's $100 million of procurement that's gone through the joc program. i might point out that 45% of that is with prime lbe contractors in a prime role. that's an astounding and

exceptional percentage of an agency giving local mbes and lbes an opportunity to be a prime. and the gentleman from southwest pointed out allow him to grow his capacity and get bigger jobs at other agencies. after all, we're the ones that' employing the local community. so i think it's a win/win. i wish other agencies would receive such an audit because they, too, would be doing an outstanding job in their joc program. >> thank you so much for coming to us. if there are any other comments you felt are not included in the audit report, [speaker not understood], i would be happy to review them as well. i don't think you heard me. robert garner. also on item 5k, members. commissioners. i'm rob garner. i work for the guardian group. we are your job order contract consultant. as a selected contractor consultant for the city of san francisco, i also service the

other major departments in the city, sfpuc, dpw, mta. we just brought sfi on board and we work with rec/park. and i have to say i was a little bit disturbed by reading the audit results because i thought honestly it was definitely biased to the negative and didn't really recognize many of the great things that the puc program has done not only for your department, for the city and joc contracting. so i'm going to kind of bring you up to speed on some current numbers. your program has been in place for 5-1/2 years and you're just under $102 million of cumulative construction placed with 190 active job orders. that's inception to notice to proceed currently on the books. you've closed about 700 joc orders and cumulative over the project life you've done about a thousand job orders including cancel. that means somebody worked on it but it didn't actually ntp. so, you're on average at puc about 150 to 160 task orders per year. originally supplemental. to accomplish that kind of volume you have a centralized

management approach where the administration of a joc process is handled by the joc team itself. they concentrate on task force issuance, contract management, lbe participation issues, the oversight of a task order process itself, crisis management of course which [speaker not understood] occurs all the time. it is construction after all. crewses cooperation with cmd, olse, local hire, oewd which is the local hiring program. and many, many issues that have to do with the constructability and com plitionv with chapter 6.62 of the admin code. construction issues, construction management itself has always resided in the field. the joc program is a part of the cmb of the puc and the constructability is always resided in the field. and after the audit sort of targeted the joc management team as having not enough construction oversight. but as you can imagine to be able to accomplish the type of volume you're doing here between 25 to $30 million

annually, we have to kind of keep some of these things separated. so, although joc has oversight on a lot of those issues, the constructability and cm and inspection process typically resides in the field. so, the audit kind of led us into a restructuring, as it were, of how work is managed at puc under the joc program. some of these things are being put into place and i will admit that some of the recommendations of the auditor made are fine and i think are substantial and are well worth considering and making change for. but i'm just wanting you to recognize the fact how the puc has been doing business. and as far as i'm concerned, working with all the city departments and each department is run differently so you know. every program is done in the city is done a little bit differently. that has to do with the type of work that is being done, the resources available to those programs, how they choose to manage the programs as far as the vertical and horizontal constructability. and i think you actually have the best and most efficiently run program in the city.

and i want to commend puc on having a great perm. i think that's something the audit missed. if i could, there are three results of a [speaker not understood] of project managers. i'm going to read you the three top results. the question is job order contractors for maintenance repair and minor construction. 75% agreed and 11% disagreed. that's 6-1/2 to 1 ratio in agreement. understand the goals and objectives of the program. 83.6% of pms to 0 said 100% agreement with that question. [speaker not understood] the policy and procedures regarding admin and monitor of jock. 86.3, 6.8 disagreement, r 6-1/2 to 1 ratio. that's pm staff highly agreeing with the compatibility and use ability of joc. >> thank you very much for your comments. if you have any other horns to toot, i'd appreciate it. thank you. >> if you have any other

information, please provide it to us. so, todd, if i may, do we respond ordinarily to these audits with rebuttals? >> we have the opportunity to respond with comments that are factually -- to correct factual inaccuracies and we do that regularly. i think it's also helpful to keep in mind the stir spirit of these is to while we may be starting off in a very good place, it's always to make us better * and to do even better and continuously improve for the rate payers. >> i understand that. some of the points that were raised today, were they included in your comments or our comments to the audit? >> many were communicated. >> in writing or orally? >> they were communicated particularly orally and some were communicated in written form. >> for me oral doesn't count. >> okay. >> and i think it's important to -- so often is the case when public agencies don't have the

opportunity to talk about how well they're doing. and if we can do that, i think that's important for the rate payers to know as well, that we are holding true to our fiduciary and our public policy commitment to make sure this agency runs as effortlessly and efficiently as possible. and i think you're aware of that as well. and the agency that i work with, we undergo three audits every year, internal audit, outside audit and performance audit and i never miss the opportunity to correct those audits when i think they are in error. so, if we can put somewhere in writing some of the comments mr. galarza and mr. garner, it would be helpful so the public and the rate payers know it is more than these minuscule issues that have been raised by auditors, that there are also contravening rebuttals. would you agree, [speaker not understood]? >> yes. i just wanted to point out that in the early '97 or '98, actually i was responsible for bringing joc to department of public works.

and when i came over to puc, i brought it to the puc. and the whole issue was to really help us do small projects instead of doing plans and specs and going out and advertising, joc was the vehicle that you can actually perform that. and, so, we've been working, trying to include more local businesses. we went out with the -- we spearheaded the micro joc where it's a micro set aside for small businesses. and we've looked at bonding issues on joc. so, we've done a lot to really make joc, you know, palatable to a lot of small businesses. and what miguel mentioned, we are very proud about that. i think the issue, you know, as far as the audit is concerned is actually pointing out some things that we acknowledge and there are some thing we want to fix. there are some things we don't agree and we've said much that

we don't agree, i think on one issue. but we i think -- we will take the responses of the contractors and also the gordon group and the ah auditor to make sure we address their issues. but i think overall it's a great program. it gives us the ability to do projects faster and save the rate payers money. >> i think local business is being the contractor is a very important step. it's very hard to find in any other municipality, quite frankly. all right, thank you. >> thank you. >> appreciate it. any other comments, public comments on item 5? commissioner vietor. >> there's a lot in the letter summary and i just have one comment. which has to do -- i don't know if steve richy -- it's 5h, page 91. i saw those red bullets of where we haven't met schedule or budget. just wanted to hear a couple sentences on why.