a little small actually very small on this slide we have copies here over on the table for the public and i can give you a copy if you want a bigger version of this this is a copy of what was sent out to property owners and rate pay ers this is the prop 218 notice the formal notification of changes in rates and the protest is noted on this form that's why you received the protest letters of almost a hundred and in order to cause a requirement for protest, a majority of the property owners would need to file that formal protest so we're right around a hundred right now. and with that i just would quickly like to thank my team as well as the puc and city attorney team who

provided support all along this year long road and with that i'm happy to take questions. >> thank you very much. >> vice president ann moller caen. >> i was going to say excellent presentation. >> so with that we'll come back in 3 weeks again to entertain your consideration and i will now turn the mic over to kevin chang. >> thank you very much thanks for being here. >> good afternoon. >> good afternoon mr. president and commissioners my name is kevin chang i'd like to give our presentation after a culmination of 10 meetings.

>> i want to thank you very much for the work that you and your rate commission have done it does not go unnoticed these are all volunteers listening to the residents of san francisco i know i speak for the commission we're very grateful for your service. >> thank you. >> can can we go to the slide please just a quick background. formed in 2002 and it's a part of the charter and normally review 5-year forecasts and we have done this 5 years ago the members of the board 3 from city staff and 4 appointed by the board of supervisors of the mayor's office and during today's presentations there's a need for representation of the

public and i encourage this commission to encourage the board to find this appointment for one of the vacant slots. we had 10 meetings as a board since july 7th of those were actually about the rates and both staff and consultants and 3 for deliberations. one of those meetings was held in the evening to ensure those that can not make day meetings can make evening meetings as well and comments from the public in the various presentations that the staff had gone out to variation organizations as well as comments and feedback from the proposition 218. >> when we look at the question

of whether or not these rates are fair there's multiple objections some are quantitative and some qualitative and we try to balance them out as best as possible in making our recommendations to this body. as mentioned before there were extensive puc outreach we took an opportunity to not only hold public hearings but to review those comments we read through the comments as well as the letters that came in as a result of prop 218 mainly and incorporated those feedback not necessarily representative of all users of water and wastewater but nonetheless as best as possible to get that input incorporated into the recommendations and findings we

made as a body. the raw data is actually available to this commission but we tried to summarize some of the comments largely around utilization and also the rate and the bill that many rate pay ers have to pay and taking into account that concern of the rate increases into how we evaluated the rate structure. >> excuse me. can i ask a question about some of those comments? does that go to the puc for response -- some of those questions are quite good i thought. >> those comments came to us as comments and the comments themselves i think went directly to staff and they have been incorporated into their operations.

>> and those people get responses usually? i mean one was a question will my rates flatten out after 4 years. 4 years, right? >> it's a it's a valid question. >> most answered on the spot during presentations some received by email which received email responses and in terms of formal protest we do review and incorporate feedback but don't have a formal response to the prop 218 notice and historically haven't done that. >> thank you. >> the comments raised were responded to directly by staff and incorporated that into future agenda items to make sure those questions were answered. >> so if it was a set of questions on that particular issue you incorporated into your set of recommendations.

okay thank you. >> our observations as a board the rates are technically fair so what constitutes fair to evaluate them and as a board gained consensus to determine they are technically fair. what we observed on the rate structures between staff recommendations and consultants is staff is in line there's some technical details we won't get into today in which they were not necessarily in agreement but we were able to explore and it actually came to the same recommendations. the increased debt service is largely what's driving those rate increases and we can talk a little bit later about how

that may mask any degree of signaling to the public around utilization because whether or not we conserve a little more that's not going to bring the rate down because a large portion of it is coming from the capital increases due to water and potential wastewater. we were able to look at in detail that all services are recovered in the rate and the rate increases are smoothed out over a 4-year period. we looked at opportunities to defer to make sure -- that we're going to have to have these rate increases and we looked at the actual scenario would have driven the rate so dramatically that smoothing out was by far the most fair and

that we have to raise them over time rather than all at once or all later on. as mentioned before, there are some changes to the rate structure. tier one customers are going to increase and we looked at largely through a bell curve as commissioner moran indicated to see where that falls and we found changing to the 4 cf rate was the right way to go given that that's where the majority of the utilization was in the profile the customer base for single families the five service rate included customer service cost and we looked at how that was being done and we have recommendations, an observation on how future rates would be -- apologies sorry:

cell phone ring. >> since we're smoothing out the rates for water, we thought we should smooth out the rates for wastewater over time. and then the revised methodology for calculating capacity charges we also looked at. information -- we felt that there was that we both as a body as well as staff had made considerable efforts to reach out to a despaired group to members of the public from landlords to homeowners and

other interested bodies and meeting the requirements for the entire system so our concerns as a body are the following -- that the rate service -- has changed 3 times in in the last 5 years the methodology was not clear to us why there was that change so we'd like to look into that further to see whether there can be a consistent method for that. that the proposed rates will have a disproportionate burden on families and low income users and currently there is not a proposition 218 compliant means to increase that without going to some outside body most likely the

mayor's office or board of supervisors and i'll come back to that as one of our recommendations, and that multifamilies -- because they have a single meter it's very difficult to translate that to utilization level at the either the apartment level or the condo level and have that as a signal for future conservation or future awareness of the rates as well. recommends rates as proposed by staff we also recommend that there be sufficient detail in the consultant staff reports for clear references for subsequent rate studies particularly the fire rate as i mentioned earlier that we develop prop

218 compliant funding for low income households and that we enlist the study of both current and possible future conservation signals for multifamilies that's a concern in light of the fact that most housing coming on online in the next 3 to 5 years will be multifamily. and a big number of those will be multifamilies that are affordable or low income and that will have to actually pay the rates they will not be protected through the landlord situation or condo situation what's going to happen is that the affordable units households will actually have to pay for their water usage through the hoa fee and in light of the fact that they

are the ones that will be paid versus single family households we do have a program for assisting low income families that's the presentation and if there's any questions i'll be happy to answer them. >> i only have a comment and that is -- it's not like the old days when you sat down and just increased rates. [laughter] the amount of consultant work and staff and outreach and the rate fairness board work is really quite impressive and i think it means that you know as we consider any change that we might want to make we have to allow time for that and but in the meantime thank you very much again for your service and to the staff that put this all together. >> thank you. >> thank you very much.

>> i want to echo commissioner moran's comments you and your colleagues doing outstanding work for us and it's a role that's indispensable moving forward so thank you very much for being leer and here and thank you very much for your report. >> so that concludes these items 12 through 16 i have some speaker cards if you intend to making a public comments you will be lotted 3 minutes to do so please present a card to donna may i please call doctor jackson to the front? >> hello doctor. >> hello and thank you so very much. what i want to say is that i enjoyed the report that i heard but when you start

talking about affordability i have a concern. the fact that even i asked the board of supervisor's to contemplate a public hearing in san francisco on the fact that how much money that people live here make because none of us have the affordability to even purchase the 30 thousand houses that's supposed to be built at the shipyard i don't think that's going to happen because that's a that's a that's a toxic cite. i have 4 generations under me children and great grandchildren and all come and stay with me and they use water now i will be meeting with your staff some of your staff they are starting another committee i was on the first one -- what was that one called? yeah the

tax board for 18 months thank you. so i'm being called again in fact i'll be meeting with two people on friday, and i will have a lot for them. now, you must remember those of us that have retired living in our homes i've been in my house since 1968 i don't even get $20,000 a year my income is less so more people just like me those people that's making less than $10,000 a year and when they come up with these costs and things i know they will forget his statement was if you don't make a hundred thousand dollars a year you don't need to be in san francisco and i'm not going anywhere and more people like me are going to be here and i don't like statements that come off the hat and i'll give this to the committee when i meet with them. so when willy brown

was there there was going to be no sewage plant that was the biggest lie ever told being on land that would not go under the water if there was an earthquake and i'm talking landfill most of my area is landfill people don't even know anything about hunter's point but i saw some committee that was being setup i didn't see not one group there from bay view hunter's point to give you information so i'm going to talk to him and i'm going to give him a name or two names so he can put them on there that know about the community thank you so very much and you all have a blessed day. >> thank you doctor some of those comments i think we can't shy away from the affordability

conversation i think commissioner moran is right we're way beyond the days where we can unilaterally do something without process. affordability is a big topic right now and it's absolutely necessary that people are encouraged and we got to flush that out and think outside the box and my point i think most of us feel that any work that's being done any large projects that are being done should certainly start at nothing less than state-of-the-art facilities for communities that deserve state-of-the-art facilities much like the head quarters we have here 525 golden gate it's a state-of-the-art building facility and i don't see a reason why we can't continue to

duplicate those efforts when we're developing in communities that have been traditionally under served i think anything we do i think that we should do everything we can to make sure that we spare no expense when we go into those communities and put our projects together thank you doctor as always for being here. the next card i have is from laura tam. >> good afternoon laura. >> good afternoon thanks for the opportunity to address you. i'm laura tam from spur and we're supporters of the rate package and sent letters to that effect so we've been a

supporter of the puc for a long time since 2002 i stood here in 2007 and in 2007 and we're eagerly tracking those conservation recycled water and we pour the rate package in front of you today which will help complete the water system improvement program and the essential planning of the sewer system improvement program seismic reliability and sustainability are really important parts of making our city livable and there's many things with these rates improving the benefits that we're getting from the sewer system and investing for climate change and the water

and sewer systems as you know are especially to do as to do as soon as you can we're expecting a very large earthquake in the next 30 years we're over due in fact and the puc we really commend for being so proactive to prepare us to minimize our risk of disaster and addressing the impact of limit change all the things these rates will pay for. good planning of course is essential to delivering the most public benefits the most from these investments and we take the years of course to catch up from deferred maintenance so we commend the puc for planning ahead and being proactive so finally we're eager to see some

of those things as i mentioned today in the next rate cycle beyond what's before you today, such as thinking about ways to expand the customer assistance program for low income families and as well as the multifamily question and how you help deal with the landlord problem and as well eager to see a separated rate structure to provide incentive for management of rain water on site we'll look to in 4 years as part of that rate package and to do that planning in the next 4 years so in conclusion infrastructure is vital and isn't free and they are services we all depend on thank you. >> thank you very much for being here and all the support that you guys give us all the time thank you again. >> the next card i have is from

adrian, covert is that correct adrian? >> thank you on behalf of the bay area counsel representing the business voice for the 9 county bay area but located in san francisco for 69 years and during that time one of the things we've acknowledged is one of the reasons the bay area is such a great place to work and do business is the investment our leaders have made in the past and san francisco's sewer's system is in aggregate a hundred years old many other cities in california are currently grappling with ways to finance

ways to improve their infrastructure and bring it in line with current day standards so san francisco is not alone but by addressing these structural deficiencies early on can help save costs down the road and we believe this rate package does that and we support it and appreciate the length puc has gone through to help keep the business community informed so thank you. >> adrian, thank you very much for being here. >> the next card i have is from hiroshi, takuda is that correct sir? >> yes. good afternoon i am the chair of the coalition for san francisco neighborhoods. and i'm here because of the coalition for san francisco

neighborhoods i believe in good government and quality of life in san francisco some of the comments i heard today in regards to the increase of 38 percent over 4 years well that's i don't think people will say that's acceptable i think there's comments about comparing that 30 percent to 12 percent well, that's a big difference and there were other comments in regards to how does this compare to other jurisdictions. well, there was a statement that well next year it's going to be 8 percent and that's comparable to other water districts how about the next 4 years? would that about comparable? are the other water districts going to experience a 38 percent increase? that's a question there. another comment there were comments about the water

meters well you all know this is important but i think it's really important because san francisco as you all know, there's over 70 percent renters and i've noticed the people that don't have individual meters that's a serious issue so if you are concerned about water conservation that's a serious serious problem that you can't really -- well conservation that's done. another issue is water supply. there was an article recently i forget where it was maybe san francisco business times -- in the event of an earthquake there may not be adequate water supply to fight high-rises well we're building a ton of high-rises and most of the new

units housing units there's midrise and high-rise well that's an important safety concern that the commission has to express more strongly to the planning department and to the mayor that we need to resolve these issues. we need answers and perhaps we should slow down that growth until we finance this because someone said there's going to be an earthquake soon well that's true and lastly the housing element the master plan for housing in san francisco requires you all have input in regards to water supply well you have to be more serious about the water supply in the event of a drought and high-rise issue so please be forth right and tell the planning commission that the water supply in regards to

drought and the increased population. >> thank you very much for being here and thanks for your input and participation the next speaker card i have is from lorraine lucas. >> hi lorraine good afternoon. >> happy earth day. >> happy birthday? >> earth day. >> oh i'm lorraine lucas and the coalition voted at the april meeting the following resolution we represent 48 neighborhood organizations throughout the city whereas the programs included in the category of policy expenditures in both water and wastewater

enterprises whereas the cost project tree and the 10-year cash flow models is un sustainable 1 billion and 176 million and 569 thousand and 9$36 and together with annual payments related to debt in the next 10 years projected to increase 7 fold makes the cost of water and wastewater service prohibitive for the families of san francisco whereas water and wastewater rates must adhere to the cost of service requirements of prop 218 of the state constitution, which requires property related fees and charges do not exceed the proportional cost of providing the service to the individual property. whereas th