have monstrous rate in creases coming. it's really important that we be able to demonstrate that we are controlling operating cost. that the rate increases are a function of capital cost. that these are physical things that you bought and put in the ground and last 100 years. i think people can accept that. what they can't is this mushrooming bureaucracy. that's why i put so much importance on it. one of these days there is going to be a reaction. it hasn't happened yet but it is going to happen and we need to say we have done everything to manage cost. >> can i put a point on some of the numbers. the budget is growing as we went through last time for pre domently because of an investment capital. the debt services are increasing, the service for

debt services are increasing. the proposed changes in front of you as the general manager said we did over 100 reassignments and over 100 substitutions before we had come to this point in asking for what would be a 1 percent change in the authorizing of positions so a lot of movement and changing was done. we came and asked for six new operating positions. so, i think it's been a remarkable process. it's been incredible as you have seen in the detailed back up and that being said when you look at the urban water shed positions we have very large numbers in the capital plan for more earlier implementation development projects, that $60 million plus, we have over $161 million related to storm water management in the flood control in the capital plan before you. so we've tried to balance that just as we have

with our building inspection permit process on capacity fees by having some folks work over times. while there is 30 cranes on the skyline now, there was one. there wasn't the backlog. you never know how long the uptake is going to last. to fund it as though it's going to last forever. we thought the most prudent way was to ask for those two positions and do what we could. the positions you see are capital related in the degree we don't do them for capital projects that we have in what is before you a record $8 billion in capital investment in years. we have to hire contractors or consultants to do that work. >> right, which goes to this argument when you say what do we let go of. we are doing so

much capital improvement that it is remarkable that it's only 5 positions or 6 positions that we are talking about because in order to maintain and operate new capital that we have not had online, you would think that you would need a whole fleet of people coming in and on board to do that. i think it is commendable. >> yeah, i just want to point out there is definitely a balance. like for example on the water shed, one school of thought is let's have an army of people because you can make the biggest bang when you review these projects early and make change. another school of thought is that you trained the industry and you have those developers go to these companies that you train so that they are educated and doing that. and then you don't have an army of people. you just have -- and so we've been looking at twice do that --

ways to do that because we realize we are not going to have this development, we are going to to have a lot of people. so what we did was we have some operating folks in the wastewater improvement system in the ip's so what we are doing is say you guys come back and focus on the development because we are operating and then look forward of on bringing project related staff to work on these projects so when the project is over, then if we don't have another project, then we can reduce staffing. it's this whole thing that yes it's important. how do we have a portion for -- position for the duration and not just grow and grow. therefore we look at infrastructure at project related positions because in theory when the project is over you redeploy that staff or if it's no longer needed,

they typically go to another department that can utilize their services. >> right. one last comment which has to do with the 265, the magic number. i saw in the notes somewhere that i set no you that desaul is out. i don't believe that i said that and first i would like a correction or review of the minutes because i believe what i probably said was beyond the 10, being pushed out beyond the 10 years. i feel like desaul should be within of the host of a menu of options that we explore before we break ground and pursue. i think the jury is still out on the energy impact especially as

we look at the heche fiscal cliff as to the use and the regional cost and effort where our partners are. i would support continuing to explore that as one of several options in trying to meet our 265. i think we had a conversation at the last meeting on bringing back again what those options were. we did have at one time this nice chart that said here is the cost, this is how much we'll be able to generate and had are is recycled water and a green mix on lid and with that and what we do to capture or add to supply as we approach this 265. so you know, i don't know about the desaul push. i think it's still a big question mark but i would want to make sure that we are really exploring every avenue with that 265 as a

real priority for this commission almost at every meeting if not quarterly to be able to hear what's been done and what we are doing to make sure we are meeting that number and we are going to be able to address that. >> i appreciate those comments and just to be clear, i'm agnostic on desaul. what i care is that we are going to have a plan on gc. we can't ignore that. if it turns out that exploration is better, great. i'm for it. what i don't want to do is take and one of the few big ticket items is push that off. it's too integral to our planning. >> thank you, commissioners. okay, if i may, i'm going to try to summarize in my infinite wisdom, i called for these items to be heard together. i think probably that was a terrible idea. i

just want to refresh everybody's recolletion. my understanding this meeting was going to commence at 11:00 a.m.. and we've had a very robust discussion and i'm comfortable with the wisdom and expertise and we want to be supportive of staff on the great things to do and i think it's appropriate to have these conversations as long as it's very clear what commissioners moran and vietor have requested and there is no objections from my other colleagues then it shall be the order and i will go ahead if there is no objections and i will call these items in the order that they appear on the list. is that okay? >> yes. >> all right. thank you vice-president caen. she's

telling me to move these along. i will go ahead and call for a motion on item no. 9. city clerk: would you like to call for public comment? >> i will do that. thank you for bringing that to my attention. is there any additional public comment? seeing none, public comment is closed. i will call for a motion. >> so moved. >> it's been moved. >> i will second as long as we have discussion after my second. >> and seconded with the caveat that we have a discussion. let's commence that discussion. vice-president caen? >> i should have pulled it back down to 2 years where the motion fits. i appreciate you getting the line items to me to the departments. in so doing it really focused me on what's the difference bureau

s and enterprises are planning to do because it's in their request for new projects. i was at first taken by something that we are all very aware of. when you see it in black and white looking at you, it's all the mandatory fringe benefits. they are horrendous and you get the salary and benefits. it's something you can put in your mind there is nothing we can do about it but it's very sobering to see that. another thing i notice is a tremendous money that we pay legally for salary. i'm curious, it shows that it goes to the general fund. why doesn't it go directly to the attorneys office? why does it go into general fund? >> the city attorneys office is budgeted in the side of

the general fund. four council that is dedicated to enterprise just like a work order like electricity rates and water rates. any internal billings like this are done through that work order process. the general government purpose of the city attorneys means that for budgeting the general city general fund budget includes that department. >> and is that an hourly, is it billed hourly? >> and while the numbers are very large, we now run a billion dollar utility. so in the connect of that we are the largest bond council program as well that we have a lot of heavy lifting and technical items that almost all of them are somehow legal because of

rates and the california constitution, prop 218 or otherwise capital projects. >> it's hard to direct a page number because there aren't any. so it's the external affairs. i'm asking because there must be a reason why, travel and training and entertainment proposals -- promotion has increased so greatly. >> for our external affairs department and if miss -- ellis wants to comment that was part of our new benefits and a great new additional list has been occurring whether it's a discussion that the general manager that

she's working on for getting more attraction at the u.s. department in washington for potential funding for the water infrastructure funding they are called wifia the water to transportation. that could matter a lot to us. we are one of the big borrowers to the degree that if something larger like the water version of tiffia that will be from a half percent lower than the amazing rates we've already gotten. that's the order of magnitude of projection. part of that and the additional work of the communities and the fact that it was a department that largely didn't exist 3 years ago in community benefits and now we are seeing what type of travel and what type of work in community meetings that they need to have. >> okay.

>> the only thing i would add to the assistant general manager to general -- affairs that when todd included this in the program it only included line items for the salaries and there was nothing in that program for travel, nothing for printing and materials and things we response for in the community. they were really trying to fix that program because we had to borrow for the organization to back pay on those items in the past. >> i would request that it be reevaluated next budget time to see if that is in keeping to our direction that we want.

>> for the television audience commissioner caen was referring to attachment c in the communications packet. >> thank you, todd. >> okay, this is under the bureaus of business services. it's page 10 of 12. it's towards the end. no more hints. [ laughter ] >> is that in attachment d -- or c? >> attachment c. so it is the fourth item, the mail services.

$766,000. my question to this is now we are sending out monthly so obviously that would increase this particular line item. >> so we -- very good observation. we have been very good with our promotion of movement to online advices. we are doing a roll out to all of our customers for online portal for doing their bill for paying their bill. some customers are already doing that under our old system. so when we moved from bimonthly to monthly we already assumed that in the 2013-2014 budget. that's why you are not seeing further growth and this is to limit the cost increases. this is where commissioner moran

to not have investments grow from online pay. >> thank you vice-president. >> the item has been moved and seconded. of we called for public comment. i will call for a vote. all in favor say, "aye". >> aye. >> the motion carries. next item is item no. 10. commissioners? >> i would be prepared to move this with the understanding that staff will return with suggestions to how we might modify that to address the 265 issue. >> is there a second to that motion with the amendment? >> second. >> is there any additional public comment? seeing none,

public comment is closed. i will call fore a vote, all in favor say, "aye". >> aye. >> opposed? the ayes have it. the motion carries. i will call it. item 11. commissioners? >> i'm wondering if it might make sense to separate out the financial plan for hetch hetchy? >> 11a and b? >> i would move the financial plan for the water and wastewater enterprises. >> may i clarify commissioner moran? would it be acceptable to move the item hetch hetchy as a projection and not a plan so that we are required quarterly to come back to you to show you the next steps. that's another option. >> if the question would be what would you do with that

projection? part of and harvey mentioned that we should not be punitive and that is not the intent. you have done a really nice job of putting the issue out there. part of what i hope is that this can be incentive for dealing with it and coming to this. some of these things are issues that need to be resolved fairly quickly and not in certainty. we expect this to have an outcome. i want to keep the pressure on to do that, and i don't know what it means to have a projection. we are not obligated to do a projection. if the projection goes as to the satisfaction of our obligation to do the plan then it's called something else.

>> it's not meant to be clever wording. our department is a special department that we have a balanced plan. other city departments have capital plans that show shortfalls that show unmet needs. so our recent history to always being able to balance and always being able to have rates pay for everything in that capital has been unique. this is a unique challenge that mount tunnel has done for us. >> i think in adopting the plan is also you are adopting and recognizing that we have a problem. if you are not adopting a plan, it could be perceived that you don't think is a problem. so, i think the issue is showing a negative plan is saying that we have a real problem. so, i mean, it's going to take time to address that. so i would say it could

be taken that you don't believe the situation and because you basically are saying that we want you to come with a solution to bring us out of this cliff, but it also could be perceived that i don't believe a cliff exist. i think it could be looked at both ways. >> it would take an extraordinary miss reading of the discussion that's taken place here to come to that conclusion. i am very willing to do anything that basically says these are our current projections and there is a huge probable and we direct staff to come back to us with a plan for solving them. i'm very willing to do that. if that were a motion i would support it. adopting it as a 10-year plan, i'm not willing to do.

>> the last thing i want to point out is the reason is that we are having some supervisors who are thinking this is an employee -- ploy to get out of some things that they feel this commission should be moving forward. so i think it's at least important to me that you understand and kind of adopt that we have a situation that we need to get everyone's attention and focus on. >> let me ask the city attorney could that kind of motion be done? >> if i can draw the attention to the final results clause and the resolution because that's whenever we get where the commission is directing staff and not as status quo the projections are not acceptable and that you are requiring us to report back

quarterly because of this difficult fiscal cliff. >> to my understanding is for you to approve for the water enterprise? >> that actually wasn't my question but it was a fine one. [ laughter ] >> that was the first part. it's acceptable to do that. that was my assumption. the question was if i were to move the resolution that says that in essence that we have been presented with an estimate that presents a dire financial future that we separate that in raising and resolving issues that can result in a plan and come back to do that, that's not adopting of a plan, that's adopting a resolution to support and if it's okay? >> yeah, i think that's fine.

it surely fits within the scope of this agenda item. >> i think that would be very helpful. >> okay. >> okay, i'm lost. >> wait, i just want to follow up. i'm tracking. i want to follow up a little bit on that because we have a resolution before us, right? you put a couple of proposals out there, one is to pull out heche as part of the position adopted. if we were to move forward with that resolution excluding heche that we should also strike some kind of whereas in that resolution that we are moving forward with because many like because of the hetch hetchy calculations do not conform, the commission directs staff to correct financial short falls and report back to the puc on hetch hetchy and we are

moving forward with the other two enterprises. >> that would be fine. >> well, i thought or at least i was hoping that what we were agreeing on is, i was hoping that we adopt the three plans, but the hetch hetchy would be with the contingent that we have to come back acknowledging that we have a dire situation that we will come back with certain time that we will come up with more details of how we are going to bring it back into balance. >> that's not what i was suggesting. i was suggesting we adopt the two plans and that we make a statement that would clarify our intent with respect to the hetch hetchy plan. >> i have a question. can we mechanically do that right here right now. we are not saying that this is a 3-week or 3-month process, what i would like to see just in the

effort of just getting it done is just adopt what we know we can adopt right now and have a conversation about the remaining piece. i actually i want to own dire and i understand very clearly what you referenced about some elected officials and allegations that this situation is not dire and that a cliff does not exist and that doesn't serve any of us well. my own is to move whatever is not in dispute quickly and have a conversation of what's left over and maybe we do that today. is that possible? the motion was with respect to donna, item no. 11, was everything there except for what, commissioner moran? the heche thing? >> the hetch hetchy power and line would be removed. >> the final two items out of

the four items there? >> wait. that was the wrong item. that's why i was suggesting the amendment on 11 which is slightly different. i also would want to make sure as you are going through this that we have a plan. i think you have an item 12. i want to make sure we are getting this eagerness of piece resolved in short order. i don't understand what that's going to look at. i don't want you to be stymied in the budget process. if we move forward with this modified resolution to adopt the other two enterprises. let's figure out what we are going to do to ensure heche piece is going to move forward to address your efforts to address the shortfall. >> back to todd's point

because then now we are going to get into some wordsmithing because this is public information. it going accrue is the hallway so you had referenced earlier and now that i'm thinking more clearly instead of it being a plan, it was a what? >> a projection that we reviewed the financial situation and that there is a finding that the projection show a fiscal cliff of hetch hetchy. >> i'm sorry for interrupting. even if we, we find it necessary not to adopt a plan. we also find it equally necessary to convey a strong united front that this situation is in fact dire and there is no waiver erg from this body here, and to commissioner moran, my interest is that you are satisfied with that what looks like. if that's not a

projection and if we can get there today, then we try to get there today and i don't know if there is the case. >> i think there is some mechanical things we can do. the resolution and the first whereas, talks about it dully notice hearing for the water enterprise hetch hetchy. if you delete, actually you can leave that as is because it's about noticing. but in the resolve that this commission adopts 10-year adoption plan for 23-24 and add the water and wastewater enterprises and hereby finds the quarterly hetch hetchy power and including the power enter -- enterprise will be taken to balance. i'm looking for the

word there. it not balance the plan. it's basically to enable us to have a plan. >> implement the plan? >> i don't know why we can't accept the projections. i don't understand. it just seems very simple to say we accept what we are seeing and -- >> it's not a plan. >> it's not a plan. it's a projection. >> what we want to point out is that a plan basically if we were to look at what exist, this is what the plan would look like. and we know that is unacceptable but this is the plan that it looks like giving all the information we have now. it's a plan, it's not a good plan because we need to fix it. and so we have identified the things that we want to do to fix it. we are going