reservoir treatment plant, it requires to have the flexibility to blend multiple sources of water to feed either those facilities simultaneously. that is going to require additional valve and controls which is the reason for the forecast increase on the project. now, the reason of ground water storage and ground water project is to construct 16 ground water wells for the capacity of 27 million gallons and water is connected to customers through the system. the project is running into some challenges both during design and during the final review phase. there has been a number of comments that have come in on the draft eir which are more complex than the team anticipated. there are some

agreements that are being worked out with some of the cemetery and those are taking longer than anticipated. we have a forecast of 22 months beyond the approved schedule and has an additional cost of $10.4 million. the team is looking for ways to pull that back through looking for additional, to remove access constraints during construction, but that is the current forecast and we are looking into how to mitigate that further. moving to the calaveras stem in the project. of course you have the existing dam on the

foreground and the hill and the current conditions. you may recall that we had landslide a in the upper portion of the slope. that has been largely removed and that slope has been excavated about 500 feet down. there is a remnant of that slide left in place. at the time of discovery of that slide, there was this area b that we also knew could be a slide but it wasn't certain at that time. now that we have excavated down at the full excavation at the slide, we know that's a slide and we've done 32 additional exploratoria to find the extent of that slide. it's going to be about six 600,000 cubic yards. the slope has to be reached to come

down and the rocks will need to be replaced with concrete. we feel like we have good definition of this feature at this time with this additional exploratoriaary work. the scope has been given to the contract or and they are currently working on a schedule and pricing. this slide shows kind of the detail of the full excavation. you can see the heavy shot creek and rock reinforcement of that slide. the ladder is there to do the detailed mapping of the rock and decisions of the reinforcement as it comes down. this is a realtime decision making process and the decisions need to be made in the field. in fact in that photo are some staff of california division of safety of dams. they are there with our folks in the field approving these changes as we come down.

again, we did 32 additional core in the last month. this slide shows a project team member along with the member of the california safety of dams inspecting that core. so what are the next steps? we expect to receive the contractors baseline schedule in march and we expect to receive the cost proposal in april and we'll negotiate in the months of april and may. the third quarter fiscal year 13 report will have the baselining effort as part of it to be reported in the april 22nd commission meeting and that will depend on the construction management team independent cost estimate because we've not been able to negotiate the contractors price by that time. moving on to newer tunnel. we had the whole in october and since then we have been installing

the pipeline since october. it shows the contract or to move the pipe by rail and it shows the pipe installed in the tunnel. we've installed two-thirds of the pipe already and expect to have that work down by march and then we'll start the space grouting between the pipe and the tunnel and then once the space grouting is done we'll be in position to work with operations to disinfect the pipe and put the pipe in service this fall. substantial completion would not come for another 6 months after that. the good news is this project is expected to go on service later this year. now, the bay tunnel is actually neck and neck with irving ton. the piping is complete, the contract or is currently granulating the space between the panel and tunnel. they are about half way with that grouting and

expect to complete that this summer and this pipeline will go into service anticipated this fall once disinfection is complete. seismic up grade beta vision pipeline three and four. the good news about this project as you may recall at the last meeting that was reported there were concerns regarding an additional fault discovered during construction during the excavation for the pipe. seismic geologist have investigated those areas and found them to be inactive and there are no major changes to the project so very good news. this slide shows the excavation for the articulated box structure that will go in the ground. the slip joint is currently being fabricated. this is a rendering of a slip

joint. it's a one-of-a-kind joint fabricated in texas and will be ready for pick up by the contract or m march of this year. moving on to crystal springs san andreas. there were some delays in construction of this project. the major challenges going on are working on issues with the contractors as we bring this project to completion by this summer. lastly, i would like to say that the tracy water treatment project is going extremely well. we completed a major shutdown last fall and the project is forecast to complete on schedule and on budget. a substantial completion is scheduled for

fall of this year. i'm happy to take any questions. >> it looks like a resort. >> you can see the treated water reservoir there. most of the panels are up toward the upper part of the slide and starting to construct the roof. the entire plant kind of looks like a war zone at the moment actually. from a distance it looks like a resort, but it's amazing that we are able to continue to operate this plant in the middle of construction. our teams are working well together with operations and i really commend them for the outstanding work that they are doing. >> commissioner vietor? >> so, we are at $5 billion approximately back of the envelope math? >> less than that. >> where are we then approximately? >> as i said the calavera changes are currently under evaluation. right now we are $40 million. at the end of

december we were forecast to be $40 million over, we do have a placeholder in a water budgeted for quite a bit more than that, so we anticipate that we'll need that money. >> so dan, excuse me, what is the percentage that we are trending? >> well, it's certainly, it's less than a couple percent. >> i thought it was like one 1/2 percent around there. >> the current forecast is, but next quarter it will be more than that. >> i know we are going to talk about the public hearing for the rates later on the agenda, but i will imagine this would have a rate impact? >> actually no and i will defer to today -- todd on that question. >> we can take it i don't know when the appropriate time is but how this is going to get paid for. >> part of the commission

general manager for the infrastructure just a reminder on the financing for the calavera dam, these landslides and as a result we have had to reduce the millions of cube yards of soil and these are both with the effort to move that much more soil and the time associated with the longer period of time to do so. over at all program is trending at less than 2 percent over budget and if you take this one bad example of probably the riskiest work you can do is the damn project which is under budget. the overall cost sip program with the capital improvement program with the water enterprise and because of some of the increases we are seeing in calavera we are working

with the enterprise to reprogram the capital projects to take a look at the year 10 project to see if they fall off to see if they benefit from taken from three or four projects which might create some cash flow benefits and we'll do that together so that water enterprise makes the decision on which projects move forward and we provide information as to schedule and cost associated with the plan moving forward and everything being focused on the ultimate services for customers. >> commissioner moran? >> thank you, we are going to discuss that more during the budget discussion as well. on the alameda creek recovery project, not now, but if somebody could get me some additional information on that project as it's been rescoped interested in impact on yield as well as the change of the

design or operation practice? >> there was a lot of thought that went into that. the operational benefit versus the cost and we can present that to you. >> in writing that's fine so i can read while i fall asleep. thank you. [ laughter ] >> thank you very much. >> and that concludes my report. >> thank you, mr. kelly. is there any additional public comment? seeing none, public -- i would like to call francisco decost an up. if anymore public comment, please submit a card. >> my comments on 7b and c. on 7b just lie we often question whoever is in charge what percentage of this and that whatever, again and again i have stated very clearly for those who can hear, i want to

know what percentage of the water is reaching into ground from our pipes. what percentage. and i have stated to you that we have propriety ary knowledge for that and we could have done that 5-6 years ago. we need to know this water that belongs to the first people from hetch hetchy which comes here and which we drink, flush our toilets with drinking water. the awe audacity that we have the water. we have millions of gallons of water that spill.

we want to know that amount. just so that we have some accountability and we have some transparency. now, i'm glad that on calavera, the person who is really monitoring that, i believe his last name is wade and i briefly met him that maybe given the circumstances we have a person who can do due diligence. i have a long time ago i went out of my way to state to somebody that you need to contact the u.s. geological survey with some maps and if you had some sense you would have some grant money given to the united states geological survey to conduct some experiments right there so that would have averted millions of gallons

of soil transferred to another place where we spent a lot of money. but again, that project is in the hands of somebody who can do the job. now, the big question is the big one. the big one is coming and even if you reinforce it with our best technology, we could not fight mother nature. but in the interim we have to do due diligence. so have we done due diligence? that is the $66 million question. thank you very much. i'm off to the board of supervisors. >> thank you very much for being here commenting on our infrastructure. is there any additional public comment? seeing none, public comment is closed. madam secretary, will you kindly read the next item. city clerk: item 8 is the consent calendar. 8 a through 8 c are considered to be

routine by the san francisco puc. there will be no separate discussion of these items until there is a request of which the matter will be removed from the calendar and discussed on a separate item. any questions? it's been moved and seconded. is there any additional public comment? seeing none, public comment is closed. call for a vote. all in favor say, "aye". >> aye. >> the ayes have it. madam secretary please call the next item. city clerk: would you like me to call items 9, 10, 11, 12 together? >> please do that. city clerk: item 9 consideration the adoption of

proposed fiscal year 2014-2015 and operating programmatic budgets. item 10, consider the adoption of the proposed fiscal year 2014-2012 and 2015-2016 capital budgets. item 11 public hearing to correspond and possible action to adopt the san francisco spuk sfpuc item 12 public hearing to consider and possible action to adopt the san francisco public utilities commission. item 13, motion to calendar public hearings. 14 motion to calendar a pub hearing. >> good afternoon, in your packet today in the communication section there

is about 90 pages of previously requested follow up materials. all of the questions previously asked from the last two budget hearings were provided assistant general managers provided answers. a couple of items are still outstanding and we've asked the commission secretary to agendaized those. but there is about 89 pages there that if there are specific questions i can assist with verbalizing those answers or another that are of particular note. >> thank you. i have five items. first is on position cap and i appreciate the update to the spreadsheets that you gave us on that. the policy of this commission was that there should be a net

zero on positions as we went forward. the idea of being too at the same time if we have new things there is also perhaps productivity improvements so we can take advantage of and very frankly this is the new needs to get the attention of the old work and opportunities there that tend to fall through the cracks. i see that has not been revised. what i would request by the first meeting in may that the staff come back to this commission with a proposal for how to actually capture some productivity savings. i would use as a target for that of we are increasing the permanent positions by five and that cost about $390,000. we have done a whole series of

substitutions. the new positions are more cost leer -- costly than the old positions. i would ask that staff come back with a productivity for us that they capture the 5 positions under $1 million if there is something we can agree on to adopt that by the board of supervisors. >> so i just want to make sure i understand. so as you probably know that we went through an exercise of realign productivity or look at things that we wanted to accomplish and looked at things that we felt maybe not prioritized and we redirect staff and a lot

of times in doing that you need reclassification and we went through that process. we went through the process to absorb everything and part of the exercise you are asking for is to basically start from where we originallly started for. all the programs that through the process identify that we can maybe make more efficient or no longer needed and then those staff or those positions we redirect into things we thought were priority and then maybe you can look at that and if the net is not zero, at least you will see the effort that everybody went through because the thing i just wanted to point out is that we went through process and a lot of things that staff have done they need to get credit for doing this. it's just hard to just try to get the last bit out of it is the hardest part. i think maybe going through

exercise really identifying the things that we have already are sacrificing to get to these few positions. >> and i do know that. i spent a good deal of my life doing budgets. and i know what that process is and it's clear from what you have done that substitution of position, there is 98 of them. that is a significant body of work. instead of having 103 new position we have 5. the traditional approach on budgets from this kind of a body is to basically say figure it out make it 0. i have been in your shoes and i don't want to do that to you. it hard to get to what i'm talking about. there is a lot of resistance to it. there is a lot of times in the areas that it's not obvious and it doesn't stick out there. that's why i have framed it the way i have. it's not to

force you to do something right now that might not be the best thing to do. you have done good work here but to take it from where you are to say okay, where is the area, i don't care where it is in the enterprise. it doesn't need to be zero by enterprise. it can be anywhere. maybe somebody comes up negative five and that balances it somehow. i don't care where it is. i wanted to leave it to you and staff to figure out how to accomplish that. >> all right. we'll give it a shot. >> again, the process has achieved part of the objective. i will say two-thirds of it. you have done a lot of work already to trade things off and it's also very transparent. i can look at those and the objectives.

it's the closed piece, that last piece is what i'm looking at and also it should go without saying that it doesn't sacrifice my favorite projects or the president's favorite project. that's often the tendency and that's how we gain budget process. second item is the desaul project. some of the defunding for that has been deferred. i don't know what the answer is. let me tell you what my concern is: we need to be able to restore the yield to 265. there is only handful of projects that have a chance of doing that. the ground water storage and recovery ones have some problems to it. the water transfer project at the moment isn't going anywhere. desaul is one of the big ones. it's without that we have no plan for how we get there. i don't

want to see that put off and even if it's a matter of saying we can't do that we are going to have to come up with 9 md from someplace else, we ought to find the money to get there. and i also don't want to where water supply we don't solve to proceeding. when the 265 projects aren't. so, and we have some of those. so what i want and i'm not sure what timeframe you can do it in, but i don't want to have the capital program go through to completion and through the mayor and the board with this current kind of imbalances there and the documents that we have in front of us don't accomplish that at the moment.

third item -- >> sorry, so what you are you proposing? >> i would suggest you take a look at the capital program. part of it is put off because of the calavera project and you need to balance that and understand that. there are other projects in the mix. this is the one that's been chosen. it's the one that happens to hurt the 265 and impacts the wholesale customers to projects that impact san francisco customers, the retail customers are untouched and that's not right. we into ed to somehow balance that. i'm not going to tell you how to do it. i have my favorites, but i'm not going to tell you. that's something you and staff should somehow accomplish. >> the only thing i want to highlight is that this is a 10-year plan we have budgeted every 2 years. the thinking

was that we are still funding the environmental and planning process so we know the timing and the amount and what it is and at anytime as you know if we get any information we can put it back in. i do understand that it's sending a message that we are not committed because we have limited capacity in the 10-year plan and so, just want to know that our intention is to keep going along the pursuit of the desaul and that's why we haven't cut any of the funding for the planning design. >> okay, now was that a correct statement that no money has been deferred from planning and design? >> we have already appropriated for desaul $2.5

million. what is predicted is $200,000 additional. >> what did it used to be? >> i don't know it by year? >> my recollection is more than that. it's not like you are not saving anything. i'm assuming something was put off. >> we'll look, the 10-year total was reduced because the consumption of the construction was out year 11. the prior appropriation for 2005 was augmented by $200,000 each year. someone will quickly find what it used to be. >> part of this is make insuring that everything we do conforms, we are not saying one thing here and another here. in our water supply planning documents are the documents that we are saying that we will have this project online by i think 2025. i think that's the date.

however, four slipping that, then that changes not just the budget but it changes a lot of other stuff. we are also trying to speed up the process of trying to figure out really dealing with those 2018 questions. if we can't beat 265, we can't say yes to anything. it's a really important project. and we need to make sure that not only our planning documents but our financial documents are budgeted to conform with that. there is timing question. how do we make those adjustments perhaps after this commission has acted assume we have today. i assume that will come back to us that you can amend a budget before. if aid quick answer today that would be as well, if you don't i would like to see somebody come back. third item is the hetch

hetchy financial plan is not a financial plan. i cannot vote for it. it's a description of a disaster. the not a plan for survival and i can't support that. i don't know what the impact is of us not adopting a financial plan today, but if for some reason we have to proceed, it won't be with my vote. fourth item is just a note and that is that we have talked to the heche budget about the possible $20 million additional dollars per year to fund transmission distribution cost under new agreements in the future. the note to all of us is that is not reflected in the power rates for water and wastewater and presumably if you have that kind of a hit that there would be that kind of impact. that is an area of