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 discontinuity between financial plans for water heche and power and that's as you develop the heche plan would need to revolve that. the final is a question, one of the things that i had asked for at the beginning of this was some kind of review of the commission adopted policies to see how this budget either accomplishes or fails to accomplish the objectives this commission has set up in policies. i know you have done a lot of work on that. todd

has this incredible binder on every policy we have on that and going back on it. are we going to get a summary of how that looks? >> there are over a dozen policies. we are comprised in the enterprise tab we break it down by key commission goal as well as key commission objective much of overlap your policies to community investment and final stewardship and ratepayer assurance and we worked with the controllers office to public our ratepayer scorecard and as commissioner moran mentioned we have as the companions to that a detail checklist of all the budget discretionary items that show before we asked for a new position we did the hundred

plus substitutions, before we asked for a new position we asked for the hundred plus reassignments. it shows through that before we ask for a new vehicle or replacement that add here to the policy that fleet vehicles are 10 years old or older and 100,000 miles or older an all of those are the checklist that we work with the controllers office and we say indeed the general managers and our office did that. that won't be ready until next month because they won't review it until the proposed budget is complete. whenever we would be between now and may is to finish the ratepayers checklist and i was able to go through other policy checklist to show you how to budget included those. >> i appreciate the detail

that you have on that when you showed that to me i was no. 1, impressed and no. 2, i didn't really want to read it but i'm glad it's there. what i do love is the disoelgs of that. how are we doing on our own policies. we said that we would have a periodic document for key areas of technology. membrane filtration or such as different technological areas, digestion process and what are the identifiable areas to update them and do we have a technical resource to

go to. my understanding is that it's not implemented today. >> that's probably a five step process and where we have implemented today is behind the tab four materials to review and all the new capital projects included a checklist that adhered and then we've also included in the proposed budget the other technology and information technology, the update to the strategic plan do we have for you today a new annual report on just technology? we do not. but we have made two very large steps forward. >> that's the kind of thing that i'm looking for. i'm not, my goal is not to bust chops on whether everything has been accomplished or not. progress is more important than the old direction is as important as speed. and we should at least identify and acknowledge that we've done a bunch of good

stuff, but here is some stuff that we have not done and the commission has asked for it and we need to know. i would hope as the controller can take a look at that and boil it down to major talking point how are we doing on the major policy that we've adopted. how are we doing against that. i would also like to build that more into budgeting process so as we approach future budgets we can say this is what we want to do and we have not done it yet. it starts with the first level of review of what this budget accomplishes and if may is the date. >> we have the possibility to do this during the mid-cycle review to do in more detail. there is a large binder with full information we do every 2 years and this is something we

t up between now and the mid-cycle review. >> commissioner torres? >> i'm intrigued by your list of projects. should we come up with projects. i don't have any list. i'm concerned, i'm behind. >> that used to be called the if fireman, effect, the mayor would ask for a list of the department. >> you don't have a list? >> i have my own list. >> how much time do you have? >> the project that meets the 265 objectives those are on my list. i don't want to see those cut and i have been clear about other areas like that. there is a budgeting tendency to identify things for cut that nobody in their right mind would want to cut. that was nature of my comment. we shouldn't be playing that game and we haven't been

playing it thus far and expect we won't. >> i think we've been very fair with each other in terms of priority. i was astonished that you had a secret list. >> it's a general human tendency to offer this. >> the second question about the hetch hetchy plan that you are not going to vote for it because you describe as a disaster and not a solution. what did you have on that? >> it's called the cliff. under current policies of the city if we do nothing that we are not going to be able to meet any kind of debt service coverage or even maintain sooner lvency through the 10-year period. that is not a plan and they have been identified ascertain series of things that might get us there but they don't all get us

there. the plan is that these are the five things that we are going to do and they will change the financial outcome so we can stay in business, that would be a plan. we don't have that today. >> so i think we have identified the things that we would like to pursue to hopefully bring us back into balance. the problem is that we don't know how much or how successful we will be in each one of those pursuits. we are actively talking about the ia, the mount tunnel and the regulatory requirements. so we are looking at everything and one of the things that i just want to be very careful about is that if we start assuming

things without having a conversation. we mention about things about talking about street lights. we went around talked about maybe there is a possibility we move in street lights to general fund. well, one of the supervisors took that and ran with it and wanted to automatically stick that into the bond without any conversation without any process. so i think the plan is that here are the steps that we are going to pursue to bring it in balance, but just don't want to start putting numbers on there without having those conversations. so. >> i appreciate the wisdom of that and i would consider not adopting until those are taking place. right now if we do everything on the page, nothing can fail. it still won't have us even.

>> just to clarify if we did everything on the page that was quantifiable at this time. not doing further on the capital program or further layoffs on the program. this is the need where the charter requires us annually to adhere to a capital plan and a financial plan. and in years passed we have come to you and showed a hetch hetchy plan and that is one of the rigors in the protection in the charter that this commission has to look through a 10-year lens. that for over the last two cycles was solved because of the generate increase before we released mount tunnels and before we had increases on the ia. in the passed we have reviewed and shown a document. in the last 2 years it's been wonderfully balanced for all three of our enterprise and

that has been a unique circumstances for us to have all three enterprises like that. now again, the plan in front of you shows that we are not balanced but that means the rigor of the requirement is that we then point out to the policy makers where further work needs to be done. so there was an addition added to the resolution this time that was proposed that while the first 2 years are in balance that we have to come back to you to show you what additional activities and solutions are under taken as we can quantify more things to balance out the years of the plan. that was the best we can think of at least as of today as a compromise, the first 2 years are as a balance. >> the final obligation to adopt the 2 years would be fine, but it's not. it's to adopt a 10-year plan. and we don't have one. i understand

there are conversation going on at the moment one on general fund rate. i would encourage they continue before this budget cycle is complete. that we have a plan that we can vote on. >> commissioner vietor? >> one thing to bring the elephant in the room and that hasn't been mentioned for the ia and it was one of the promises and the hopes that i had with clean power type program that we would be building a customer base and

putting that aside and not looking as a residential base. the rest of the conversation has been a commercial base and going as part of the ia negotiation to generate the revenue to help with our fiscal cliff. i also had discomfort with how to hetch hetchy plan was laid out because the understanding that takes negotiation and identification and without a sense of what those real opportunities are and whether we can bring them online, it seems i am prudent to be adopting some kind of a hetch hetchy plan without that component for revenue in addition to the pieces listed and identified already. >> so we are looking at customers. it's just not

defined who they maybe as customers. these documents are public. it's very difficult for me to start laying everything out in this document without having those conversations. >> i understand and there is all these variables. >> i think that you have to give us some flexibility to work this out. i don't know what it means that not adopting a 10 year plan-year plan i just feel that giving mountain tunnel we realize the magnitude of that and then the t and d cost which was more. that just happened. so, we need some time and we need to talk about everything. but to tell you the first thing i wanted to do was bring to everyone's attention is that we have some serious problems and for a lot of people who enjoyed the benefit of this

enterprise to realize we are in trouble. i just want to point out by me doing that, i think having the commission need to be really supportive in helping us and in that direction versus penalizing us because we don't have a plan. i think we have a process to get to a plan. i would maybe encourage you to encourage us to go on with this process and hopefully we can get to a place where we are back in balance. >> yeah, i appreciate that and understand that. i would just hope and i don't really understand if there is an opportunity along the way because it just feels a little nerve racking adopting a plan knowing that we have all of these issues facing us that have come up. i want to express my concern there and i

understand and i appreciate you brought these up to our attention. at some point, probably pretty soon to have a sense of how we are going to address them is going to be pretty critical so we can have some sense of comfort to make progress and able to address these issues. it's my 1 piece. i also wanted to ask a little bit about these positions. and how this is kind of a question for you, todd. i'm stuck on this gallon of water cost 1 cent to deliver. we are looking at where it's going to cost $0.04 to treat. 1 1/2 cents over the next 10 years. >> it's really over a treatment disposal question right that we are going to be addressed as we see the rate increases and these budget issues. it's really prudent and i don't know how it plays

now the budget to be investing in retention which i know we are talking about around green infrastructure and porous pavement but keeping the water out of our system like we keep the wastewater out of our landfill. can you address that a little bit and if we are making the appropriate investment in keeping both water out of our system so that we are not incurring the hit that we could potentially be saving on. does that make sense? >> i will take a stab at it and if the general manager, if you would like to go first? >> yeah, when we look at the wastewater side a lot of our facilities are built for storm water. that is where we look for opportunities to shave

the peak off. one of the challenges is the combined sewer. you have to take out the storm water. the whole challenge to expand this system because it's hard to take the storm water because it's with a combined system. that's why this whole process of okay, if we are going to improve the system, we need to start looking at the storm water piece before it enters into combined system. and so that's why we are looking at all of the sewer system improvement programs and the triple bottom line and green infrastructure. so we are actually doing that. it's just would be very challenging to look at you know how can you do some of the stuff when you have a combined system. >> right. it just seems to me, so it gets back to these positions because two of the positions i think are around the storm water guideline

implementation which seems lie a pretty good investment as they are online. you can quantify that readily, right? >> yes. with that what we have done is talked to the tommy mole an about reprioritizing the positions so that they provide more resources and so for me, it's that, but also applicants waiting a long period of time before we engage. the backlog is so large so we are going to redeploy staff in doing that. but what you have to keep in mind is affordability. these services are not really paid for through the process, the permit process and which goes to another point that getting a permit is just while these

death by a thousand cuts. the wastewater is funding all the capital and operating and all this other stuff and now we have some unfunded mandates which are good for the system, how do you balance it. so we went through exercise that commissioner moran talked about is realign staff to accomplish this and so you may not see new positions because getting a direction that we don't want any new positions and we are trying to realign the current staff. >> i would push back on the no new positions piece special fully light of some of these numbers and i don't know if todd, you want to talk to those numbers but it strikes me from a financial investment perspective that it's a good investment to me. and maybe i

have that wrong. >> if i can just respond to that. my focus is exactly not on those five positions. they sound like they are important positions to fill. it's another level of thinking that says at the same time that new needs come up, old needs go away. we know what to do about the new needs. we ask for new positions or we substitute old positions. very hard institutionally to get at the stuff we don't need anymore. what i'm aimed at is trying to figure out how we can get to that. and/or can we afford to do the things we need do. the reason i want to do that, we 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 recollection. 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.