study it allocates cost in our 10-year financial plan, our budget and all of our projections and will provide for you as policy makers as well as staff comparisons of all of these data xaert to all of our neighbors in the bay area and larger cities in california. by rate structure and design and looks at those best practices along the way to make sure that we are doing well by our rate payers and for our rate payers. the charter requirement is in back of 2002 and rate studies back in 2009 adopting the first 5-year rate package and this is a new time now because we are also looking at in the connections of this rate study, the new rate policy you adopted, the rate technology policy you adopted and the new insurance policy

that you adopted. a lot has been happening. we met with several neighborhood groups and associations and we are teenage up to do up to 700 across the city and we'll be providing this information. the rate fairness board will be meeting during the last several months and our financial planning director who is here who has done a lot of the heavy lifting there along with his staff. the cost drivers on the technical side, no surprise to you, personnel and operations and maintenance are relatively flat. they are now a small proportion of our budget but what is driving our need is capital. it's showing your 10-year financial plan and projections and you can see the

portion of the budget of people is really shrinking and the portion investment in capital in the stewardship you charged us with grading the capital you can see here is coming online mainly in the form of cash funded as well as mortgage funded or debt capital improvement. that's the large department. in fact about 75 percent of the rate increase that is needed is to pay for capital investment. only about 20-25 percent is for general inflation for personnel cost and for operations and maintenance. the areas that we need your help is considerations in slide ten. the last time we did this was a 5-year rate package which was to get us through the we sip

construction. we need more years to get us through. rate design as how you want average rates to look. we have already given some indication that we want no larger than single rate digit increases. also things ad as commissioner moran noted earlier how we do that as a measure. then we'll be able to consider things like for tiers. some have three and four tiers. we have two tiers on water and sewer and that's a policy consideration and things on budgets as discounts for low impact design for green incentives. i know that's been a great consideration for a number of you on the

commission. i'm looking for you for ideas that you want to see. the rate, study so far is basically summarized here on the slide over the next 5 years. you can see projected monthly increase about $78 a month to pay for the completion of we sip and even the projections shown breaking up how much is going for operations and you can see on this slide 75 percent for the increase is for capital investment for things that last 20-30 and in some cases nearly 100 years. the 10-year view is here and here is an example. san francisco is right in the middle there and even with our proposed rate increases for next year, we'll remain right in the middle for this comparison. you will see these charts for dollars per month, you will also see them as

percentage of household income and you will have a complete picture for your budget and your rate deliberations. the public outreach is a part of the assistant manager as well as fox who is here to hear your comments and we've been already reaching out to communities offering two ways of our system, allow folks to see the aging infrastructure as well as when there are sink holes that need to be repaired and i think they overwhelmingly increase that replacement budget for 15 miles per year and like that they are coordinated amongst ourselves and increase the spot repairs for 700 from what used to be funded. that's being noted for some stewardship examples that the commission has taken. these are types of

organizations that we'll be talking with over the coming month. neighborhood and labor unions and community based organizations and messaging through the current newsletter on how dollars are at work. with that, we are here to listen to you and to hear what additional things besides just the technical cost of service but what additional rate design, policy items, water budgets, green incentives, whatever they are that you would like us to be able to be prepared to talk to you in january and february as the rate study gets completed. it is by no way complete now. it's a time now whenever your policy input would be most valuable. >> do you have a preference for

what that takes? there is no action here, right? >> there is no action but the list of questions on slide 10 and 16 those are so bigger picture policy ideas and you have input on environmental incentives and after the ability. for affordability we already gave you the adoptions in our affordability. we tighten those down. that is already in the report. if there is anything you would like, as commissioner moran as the idea for affordability for number of households in the city that exceed the 2.5 percent because our metric is on the household. >> commissioner moran? >> thank you. i appreciate the opportunity. i'm not going to

give you specific some concerns that i hope can be considered as part of the analysis of our rate processes. some of these are dictated by the rates policy some may require some modification to the rates policy. as far as affordability i have made my point on that. i think it's a big issue especially as we have become a city of the very rich and very poor. that's something that average isn't relevant and we need to have better ways of measuring that. >> i would like to see you somehow able to better -- align the cost structure and the fixed structure. if you get into a drought and people start using less which is a good thing, we have to do rate increases so they end up getting, the feeling is that

you are paying more to get less and factored covered the fixed cost but it feels wrong and it's a tough sell when you are trying to get people to do the right thing and somehow aligning the rate and cost structure would be to our benefit. part of that also is there is this perverse functioning of how we pay for conservation and reclamation. the fact is that every continue evasion project that we authorize raises water rights, that's kind of an odd thing but it's absolutely true, same thing with reclamation. the more we do, the harder it is to say we want more. i'm thinking we should probably take a look at whether it makes sense to have a conservation fee that is a fixed charge and that

couldn't just be conservation, but the idea is that this is a commitment that needs to be funded that over the long-term it will improve the portfolio and the metric water in the system and we know it's going to cost money and we can be honest with people upfront and say it's going to cost you money and sure how much. the nice thing also if you raise the fee you can continue to fund project until you can't afford it anymore and by that time you don't need to. i would like us to have a look at that. the last item is one of incentives. we want to make it in people's self interest to do the right thing and not rely just on people doing the right thing out of the goodness of their heart. the only twhaun occurred to me frankly as i was thinking about that because there are some perverse

incentives in the water system we are looking at lown impact development of the water system. we do take some account of how much hard escape as people opposed to landscape. we might be able to do more of that that you can measure how much hard escape a lot has, the roof, sidewalk, patios, we know how much hard escape someone has. to convert that to basically some form of land use that will absorb water, that would reduce our cost ultimately and we can reflect that. that is one example that came to mind. hopefully there are others as well. those are money issues that i hope you can consider. >> thank you.

>> commissioner vietor? >> i'm concerned about the fee conservation issue. the report of november 2012 on storm water fees and really laid out a fact forward that i thought was compelling. i think it's important to look at that. the long range 2014-cycle as an introduction to this concept and addresses this question and i pretty much want to echo and my concern about the conservation approach and it do dove tails nicely and we start to monetizing and looking at the benefits as well as the parallel incentive program would be. i think you capture in your presentation and not much for a fee. i had another

question on the infrastructure. it seems that is an opportunity especially on the water shed and roll out to do community outreach toond really have the communication be around look your rates are going to increase, but here is the additional benefits that you will get from your rate increase and to really use that green infrastructure programming as the communication vehicle for the rates. i don't know how to really capture that but it ties in with your slides for with a the public outreach programming will be as well as the benefits of lid fee

incentive structure might be. >> any other comments? >> at any time you have additional thoughts please share with me. not to put you in the spot, but i have collected comments as to rates and we are working on those various ideas affordability and payer outreach as well. >> vice-president caen? >> have we looked at putting on another tier? >> we have looked at that and we have a tier in the previous cycle and decided to make just two tiers on water.

>> most of our comparison just do on water and not for sewer and that makes us unique that way. we can consider it but most of our water consumption is because folks use water so wisely here in san francisco, most of our usage is tier one and tier two of neighboring jurisdictions. by having two tiers water and sewer, we are doing pretty well by it. >> my thought is if you go up to tier 3 that's your fault that you are up there. it's a nice way to make more money. >> yeah. a good thought that

are you in tier three because of a 5-person family. the last time we visited this issue, that third tier we heard from san francisco families and we'll look at that and extend it up to perhaps tier one for large family water budget. >> if large family, also a large number of single family resident. >> it would be interesting to since we are reading about ought -- all this stuff that you can rent your couch now because of the affordability issues. i don't know if that plays in. it might be an interesting data point or demographic to track where there is a new definition of these extended families, if you will. where strangers are renting small spaces in houses

and then all of a sudden you have 10 people living in there and a lot more users. >> i think the issue is that if you are trying to get to pro person, it's hard to police how many people are actually using the water because maybe you have a house of two people but they just use water and don't really conserve and you have multiple families living because of the affordability issue and the way to assess our rates. i think we are looking at all the things that you are talking about and we are going to pull together a presentation of what we think to address some of these issues. the last thing i want to do is monitor how many people are in a household. >> how do other cities do it? >> some cities that are using water budgets they are actually

using gif maps and googles maps and they have a water budget and if someone want to waiver a water use. there is section in the report that will highlight water budgets and monitor them without policing. >> how does santa cruz get to be the most expensive? >> i believe they have 5 tiers with a very aggressive water structure. we'll highlight them and call them out in this report. they have very high rates. >> any other comments? commissioner torres? >> i don't see any upholding

data that you are going to use. >> we are going to use neighborhood groups and business owners. >> that doesn't give you much information in my point of view. many of these community groups are concentrated if one specific area and the people that can't come to those meetings are the people we should be out reaching. maybe some polling data. something to discuss, but there needs to be a broader view of outreach and this is taking a lot of staff time in the evening to data that may not be totally reliable. >> it's a good point and we'll definitely consider that. >> the cost of the poll versus the cost of the salaries for the employees might be far less. >> good point. any other comments, commissioners. we won't be

calling for a vote. but i will call for public comment on this item. any public comments? >> seeing none. item closed. no. 10. >> approve amendment no. cs 113 b. >> i will move the item. >> it's been moved and seconded. >> any public comment? seeing none, it's closed. commissioners, would you like for me to call for a vote or hear more on the item. >> a vote. >> all in favor say, "aye". >> aye. >> motion carries.

>> it's been moved and seconded. any public comment on these items? this item is closed. >> are these trails that we passed years ago? >> no these are trails by san mateo county. >> division management and this was for easement. they manage the trail and pedestrian bicycle and people and dogs. >> any other questions, commissioners? i move the record show that it been moved and seconded. is that okay? >> all in favor say, "aye". >> aye. >> the motion carries. madam

secretary. next item. 13. >> approve the terms and conditions and authorize the general manager to execute a purchase and sale agreement and any related document to facilitate the purchase of approximately 84 acres of have approved agricultural land. the date should read november 4, 2013, and we'll make that change on the final resolution. >> thank you madam secretary. commissioners? >> when were we briefed on this item before? >> it's closed section. >> that's why we can't talk about it. i knew something was closed in my mind. >> i will entertain a motion? >> i will move it. >> it's been moved and second. any public comment on this

item. >> all in favor say, "aye". >> i have some questions. they are going to lease the property? is that correct in do we know what it's going to be leased for? >> through programs, general manager infrastructure, this is a case where we were leasing property from the private entities in order to drill wells and create a safer working environment for the workers in a tunnel below grade. the owner wants to sell the land free and clear. we have basically two options before us. one was to move forward with eminent domain on the lease portion and the other option was to purchase the property on the open market. we negotiated with the owner. our offer is 10 percent above. what

is critical on this particular item is that if we do not have the wells in place we'll spend 3 million $3 million to make a safer work environment and have the ability to sell it after the construction is complete. >> i thought i read here that they are going to lease it? >> they are going to lease it back for a short period of time until they move off the property. they will lease just the house area because the plans were to sell the house and retire. >> so how much are we going to lease it for? >> the lease is basically it's a free lease back as part of making this transition happen because the current lease on the well has expired. so as a

counter for not having us vacate the wells, they will lease back during the move out period. >> for free? >> yes. >> they have maintenance obligations so they will maintain the property while they are in possession so that's a cost savings to you and you don't have to handle the property and trespassers, that sort of things? >> as part of the price this was considered as part of the price. >> is there a time limit for them? bhaps #2ksh what -- what happens if they decide to stay for 10 years. >> i can't remember the exact date. brian is here. >> 18 months. >> okay. this item no. 13 has been moved and seconded. public

comment is open and closed am i right? i will call for a vote. all in favor say, "aye". >> aye. >> the motion carries. we went out of order to make sure people were paying attention. madam secretary please call that last item. >> i apologize for missing item no. 11. it's authorize the joint funding agreement with u.s. geological survey for an amount not to exceed 335, 000. >> moved and seconded. >> all in favor say, "aye". >> aye. >> the ayes have it. motion carried. next item. >> item 14 public comments on matters to be discuss in closed

session. >> motion asserted. second. is there a public comment on attorney-client. seeing none, all in favor say, "aye". >> aye. we are going into closed session. >> item 16, conference with legal council. pursuant to california, list gaegs existing litigation mark appear and matt appear and san francisco, item 17, conference with legal existing

>> it's been moved not to disclose. second. >> all in favor say, "aye". >> aye. >> is there any new business? >> the november 26th meeting has been canceled. shall we deal with the december meeting as well? >> while we are all here assemble to make that announcement. >> it's december 23rd rd >> sometimes we have the meeting in december. >> we won't have it on the

24th. is it appropriate for me to announce that november 26th and december 24th meeting are canceled. >> if that is the pleasure of the commission? >> without objection it's so ordered. >> okay. then seeing no other business. this meeting is adjourned. >> >> >> >> i have 2 job titles.

i'm manager of the tour program as well as i am the historyian of city hall. this building is multifaceted to say the very least it's a municipal building that operates the city and county of san francisco. this building was a dream that became a reality of a man by the name of james junior elected mayor of san francisco in 1912. he didn't have a city hall because it was destroyed in the earth wake of 1906. construction began in april of 1913. in december 1915, the building was complete. it opened it's doors in january