planned work we're planning now underground vaults to the area. the proposed utility agreement is our protection it protects us from my liabilities and claims associated with this project. we've been drafting that internally we want to make sure that within the city family we can incorporate them into the agreement as we move forward >> can i ask a quick question? and you enter into the amendment with the developer and if the developer is allowed to sell all the condos the owners will pick up part or all of the liability? that you yes. >> typically the case i have

the purchase price so developer say gets to make a half of billion dollars and gets to walk away? do you know how these types of liabilities maybe taken into account. let's say someone buys a 7 and a half million dollars condo i assume that owner is responsible. >> it's a fairly board range to structure the deal to retain or pass along liabilities. >> would it be typical for a developer for years to retain

the liability if those units were sold off? >> i don't know if it would be typical i'm not a real estate. >> there anyone from the port to help us understand. assume there's an earthquake and all those units are privately owned who get to pass for the 20 million gallons a day >> it's not typical for the developer to retain the liability forever and assuming that, you know, we're looking at how to structure it to provide the maximum protection and in case there's a earthquake it

could be contributed to the design or other things and we're still working on that internally. but you're right it's not typical for a developer to retain liability forever >> i appreciate the fact you're familiar with the fact that the california teachers association is the partner in this. >> i've been told that. >> so they've invested $44 million into this and i'm wondering if anyone has talked to any of these folks. so during the construction some how the 3 and a half pipe area

gets broken? >> i'm not aware of any discussions. >> i think we may ask a representative to come to speak with us. >> it's not - we're talking about in the agreement i'm not talking about under statute or common law, you know. >> so if there's some kind of severe negligence. >> going back inform my slides finally there's the california civil code that the developer is required under the san francisco building code to protection the

joining land for any resulting damage so we feel that's one of the basis for us to go ahead and start developing the utilities agreement. we require that the puc review and proof the design of the shoring system and lay out the process for damaging facility in a way to identify the project in relation to damage associated with that. we would be allowed to recuperate our funds and we ask us to be indemnified for the facilities during construction activities >> and before we move on but i want to get a sense of the

exposure. how much would it cost to fix the damaged pipe >> it all depends upon how danldz it was and it could be as simple as million dollars dollars it's hard to estimate given that the size of the pipe and what we would have to go in and fix it. we have been going in all doing repairs and we're looking at replaying parts of the pipe. and we want to strengthen some parts of pipes >> how much are we investing in those pipes.

>> thirty million but that's going all the way from the south of marketing area. >> so i think i heard you say theirs multiple section? >> yeah. >> i'd like to get a budget open that. and we're talking about what the city minority on the hook for suppose this pipe bursts >> pumps out 20 millions of sewage a day how long

do >> we have to work around so we

have multiply make any sense we can work through. we were able to shut it down and shufltd it to other make any sense in the city >> i see you've been working around earthquakes suppose we get the big one how long will it take to get that fixed. >> if there's a water seismic break at the time there was a think earth quack but they were able to put back into either in a couple of weeks and other things took months later but if we have a larger seismic fist we do have a well trained staff

that we can come back and get minimum service into the area it's not just here in san francisco we have other customers that depends upon on us. we have some ways we can move sewage into our north plant but that's kind of a catastrophic event and it depends upon how much damage >> a couple of weeks may not be enough time. >> it all don't understand the process. >> so there's 20 million gallons. >> a lot of it is the financial

district if they're not people working downtown after an earthquake the amount produced in the work city fluctuates. i guess i ask those questions you have good attorneys who look into this >> if you had to buy insurance or some sort of bond to pay for this risk how much? >> i don't know. >> my sense is quite a lot. >> the risk during employee and post construction is outing put

on the developer. >> so again as we've heard from the district attorney if those units are solid off those risk goes to the condo owners. >> i've heard that but i don't know. >> so the individual condo owners might be on the backs of them but there's a huge risk and it falls back on the shoulders of the city we'll have to pay for it. >> i assume that the risk b will fall on the city. >> why don't you continue with your presentation. >> i'll go back. so we have the identification one of the things we're going to

do some assessments precondition assessments and be able to use those to compare the pipes and the 10 by 10 sewer during construction and if there's anything we can judge, you know, to be taken place we'll ask the developer to fix those. as i settle in this area you can cause differential settling. we we'll tell you have a remedy in place. as we talked about there will be an emergency repair plan and we talked about this if there's a break in this pipe and there's sewage to causes problems to the

public health we have a state agency that oversees our permit or any municipal storm system requirement. and finally the contractor would have to have a work plan to protect that >> so this those are preconstruction activities that have to be in place before the construction. >> and finally those are the agreement they restrict our facilities you can't plant trees on top of our structures or build anything. this is a typical thing we do with all our easements if somebody's using them for recreational activity.

so that concludes my presentation and i'd like to answer any questions >> again thank you for answering those questions. actually, i have a number of questions about i i was hoping you'd address in the report that your agency call for. i want to say is the engineer who prepared the resort here? >> he's in new york. >> i may want to call him. >> we didn't have enough notice to get him out here. >> are you familiar with the report? >> no, i have engineers here but i hired an engineer from outside and that's their opinion

and their work. >> can you tell me where why the report was commissioned? we'll >> we'll rely on this complex report so it's not inside our organization plus this specific person has the expertise. so the report cost the city $135,000 and it took seven months it started in the middle of july last year and is report was released february 22nd. you've had a chance to look at it >> it is a fairly thorough

report. >> i'd like to address three or four sections so section 4 describes the risk to the puc and the section 57 refers to adverse effects and section 6 talks about the design. >> so section 4 do you recall what the risks are to puc assets from the construction? >> no, i don't. >> i'll read a couple of lines the primary certain is from grounl movements to waiting instability and it may include angle disburse movements and it

might effect the construction induced have i been arbitrations could cause damage. >> no. those are common things we deal with you adjacent to our property and. >> if we could talk about the adverse effects. your aware we're in wealth e earthquake country >> i was born here. >> if you could go to the slide i'm sorry go back one. and if i could read under seismic erroneous the report indicates there's a 63 chance of

a earthquake with strong to very strong shaking at the project site does that sound right? to you >> yes. >> we had a brief conversation around the developer was going to design this system with an ice based on system and ultimately decided to do something else and not use that base isolation system? >> do you want to do this? >> who knows how to handle

earthquakes. >> it would be talking about the base isolation actually this building is on a base isolation system it's isolated from the ground from an elastic a moveable base. >> so it stabilizes things a little bit better. >> right the building is that. >> now we looked at that but decided to go something else? it that right? >> yes and if you want to ask the developer again, we don't have the final plans in speck so it's hard for us to discuss

this. we'll also assume worse case until we get the specifics there's more movement and we have the vibration monitoring plan so if differential settlement through that >> can you have a representative address that or we could continue on? continue on. so in the report it states that after the consultant puc the system was being eliminated from the plans the assistant requested an analysis showing the impact of the seismic analysis. about the analysis that was done

those methods and assumptions are not appropriate because the building b will be subjected to strong shaking and that includes stiff floor slabs and are you familiar with this issue in >> i respect there portion of the report and i didn't. i'm familiar with the issue. i think that's one of the reasons we're asking for more sophisticated analysis in how the building would reaction in an earth quack >> my understanding was the developer decided not to use the more expensive materials to save

money. is it fair to say that this is why you decided not to make the building more safer and i think it's absolutely pertinent in part because your decision not to use the base isolation system is not going to lead to the city in an earthquake >> if you'd like to come up and say that on the microphone. it's hard to hear you.

>> simon at san francisco waterfront partners. >> erick engineer. >> what i said mr. president, was that the question was asked by the person who perpetrated the report and would the design without base isolation imexpose a greater risk open the system. >> i'd like to again erick wong. i'd like to state that with base isolation or without base isolation on a standard 6 believe it the standard - the

question is what does base isolation do stem from understanding of how forces are taken down from the superfluous structure above down into the soil. and it was our conclusion that the amount of force and with or without the base isolation system has negative impact with the force onto the soil and the adjacent >> okay. i'm trying to understand that. conventional ways is you build a fix base and it means under the building it's constructed to have a little bit of flexibility so in shaking the building can

absorb the shaking >> so the sub structure the 3 story parking abandonment is a fixed sub structure the base isolation is at the ground that's why the comment was not relevant in this conversation. >> so you're saying the base isolation stabilizes what is above the ground. >> they're both stable. >> right but the isolation - >> it will reduce the accelerations that travel up into the building above and so

it makes it more stable? >> that's what i want to understand and i understand base isolation systems cost more. >> there are savings that the base service stations allows for yes base isolation system but because the building is less above. >> when the building doesn't come down. >> the cost is a wash. >> i appreciate that. and while you here can you answer is a couple questions around liability. again, we're hoping nothing happens but if there's an earth quack are you willing to assume the liability during that

construction and afterwards? >> first of all, mr. president, the area of the building is going to be a public park that will be owned by the port of san francisco so nobody's going to be building anything else on it it will be a public walkway. as far as liability not unlike any building in the city that's built next to a sewer pipe the liability the ongoing liability is limited to developer and subsequent owners there will be

owners who will belong to a homeowners association and they'll have insurance so the liability will stay with the city. >> so in other words your liability will be limited to the construction but once you've sold the buildings you get to walk away. >> well, the homeowners association has the port of san francisco it will be maintained by the homeowners association sea any activity of the homeowners association in the maintenance of the above ground area the homeowners association would be liable and if an earth quack happens today and the pipe

is damaged the private club that sits and i top it right now the city can blame them but like now the city infrastructure theenter city is responsible for the infrastructure. so i did ask a question before around - don't worry simon they're not coming for you >> and asked a question. >> your investment i'm wondering in you could tell you you mentioned you had liability and i assume that california stares has a responsible. >> the shareholders is a private entity and