side in your savings account and it's good for long-term planning and so no need and in terms of of progress we've had lots of success in implementing this and since 2011 we've rolled this into 10-year financial plans. all of these show that we've been incorporating this policy into our fiscal planning and it also provides clear guidance to our credit markets when we go to issue bonds and the rating agencies and credit markets like to see that we're planning for prudent fiscal emergencies and our other needs similar to drought and that sort of thing and the 1.25 threshold also does setting the policy at

that minimum level doesn't unfairly burden the rate payers meaning if we set rates higher than minimum thresholds it and that's a promise to the rate payers and we want to make sure we're collecting moneys to pay the bills and infrastructure work reserves are important but we want to balance the need to have an appropriate level of reserves and that's more the point. >> future considerations -- we wanted to share with you ideas there's no action items for your consideration i think what we'd like to hear from you is whether you feel an update may be warranted and we'll bring that back for your consideration in the future and one idea is looking at the different components of the reserves and increasing from 15

to 25 percent as an example and that would move us from 2 to 3 months of reserves and the typical agency has between 3 to 6 months of reserves set aside and we're on the lower end of that and one consideration that we could bring back to you is to increase our reserve levels from the 2 to 3-month range and one other thing we could do is add the current debt coverage reserve to the policy. so if you incorporate fund balance which is, again, the savings account that i mentioned earlier, that always results in a higher number and the point that we lose when we do that is such as what we're facing in the current year. we have revenue variability of 40 $40

million and the other measure that the rating agencies look at is how much revenues are you generating in the current year. right now we're right on on on the 1.0 line, we're right on the edge so adding that debt service coverage ratio would be something that i'd actually recommend to the commission and we could consider increasing that is threshold or if we added the 1.0 those are the minimum requirements and other things agencies do is put forward in their policies a higher threshold so a 1.1 times ratio rather than a 1.25 or 1.35 coverage ratio to make sure you have the reserves

above the minimum so a cushion in case you have a revenue shortfall and this slide showing if we did those things how much it would cost and an example where we'd increase the current ratio from 1.0 to 1.1 would require an additional 20 $20 million of revenues and if we did that all in in 1 year my recommendation is to phase in over time and that would change the rate increase from 12 to 18 percent and i know it's a one time thing and i wouldn't recommend doing it in a time of revenue variances that we're seeing now with the water sales reduction, but it's something that we could bring back to you and suggest we phase it in over time and again it would increase the over all

reserves for the agency. with that i'm happy to take your comments and questions. >> on the current ratio if you are achieving above 1.0 so you have revenues in excess of your expenses, that money, that excess money goes into the inappropriated reserve? >> yes. >> what i'm wondering is whether -- how much of that is substance and how much of that is a question of timing and how you flow your money? if you budget to have a surplus -- i assume we would not propose to budget that we would build surpluses indefinitely over

time. something would be done with that money and given that something is done with it, is it a matter of just doing it later? how do we think of that. >> you can think of it in many ways the way we've been using it as a long-term planning tool, is that we're making sure that as we bring forward the the 10-year plans to you or rate considerations for your consideration that by the time we -- if we're talking about those specific years we're adjusting the rate that those years in question meet these fund balance reserving policies and in many cases all of the fund balances in all 3 enterprises exceed these thresholds that i've described to you. they are all well above 15 percent and in some cases near 30 percent and in and in many cases we've already exceeded 30 percent thresholds

which is a good thing and why we're suggesting adding the current ratio is that even though we show it on our budget variance report to you, it's not a requirement. it doesn't say that we absolutely have to keep a certain level of can reserves given how much revenue we're generating within the year versus taking fund balance out of the equation so the money is actually held in reserve and invested with the the city's treasurer's pool and not idol or lost in that regard but showing that the credit markets that we're able to with stand now and the water enterprise. >> some of the reserves, once you have built them, you don't

have to keep build them. >> that's right. >> you can fill it up and stop filling it up at some point when you think you have enough so that when we talk about the amount of money that needs to be added it's a target to achieve over time. >> that's right. >> are you suggesting that you would be coming back to us at some future meeting with proposed changes to the reserve policy? >> i think based on this conversation, if there is -- if it sounds like that is something that would be acceptable i would at a minimum request adding the current ratio to our policy i think that would be a prudent thing r if us thing for us to do at a minimum. >> at what level? >> at least 1.0 and that will

show the credit markets that we're not only watching our fund balance levels but that we're actually looking at our operating revenues within the year and we do show that as part of our budget variance reporting but it's not part of our formal policy. >> just speaking for one of us i'd be open to that i would want to make sure that i understood really what the implication of that long-term financial plan was. >> right and i wouldn't i wouldn't recommend changing our coverage ratios until we're past the revenue variance that we're seeing with the drought and perhaps the next the next 2-year budget cycle we could bring back suggestions at that time. >> we're going to be talking about rate structures in the months ahead and one of the things i'd hope to be able to do is reduce some of that rate

variability so that we so that the reserves are less of an issue so it's kind of working the same problem from the other end so if we let that discussion take place and then get through this current revenue debt, that would be probably a good time to reconsider that. >> sounds good. >> thank you. >> i agree this is not the time to do it so any other comments, questions? thank you very much. >> thank you. >> that concludes my report. >> good. so let's move back on the agenda to item number 4. no, we've already done 4. item number 5. communications. any comments, commissioners on that? >> no. >> okay. item 7.

>> item 7 is the urban pilot program update. agricultureal pilot program update. >> hello. we may have a technical difficulty but if so, we'll do it without the slides. so i'm going to start. miss ellis. last month you heard a presentation where we gave an overview of the various ways the sfpuc has invested in over the years. today we're here to give you an update on urban

agriculture and in creating the pilot program the commission recognized that by the virtue of all of the infrastructure it takes to operate our core services of providing water power and sewer systems, that the sfpuc is a large landowner and as a large landowner we have a responsibility both to the rate payers to manage the land for the benefit of the rate payers so urban agriculture is one way to maximize the benefit and to be a good neighbor so as you probably recall back in 2011, the commission authorized an urban agriculture pilot program where you asked the staff to identify 3 sites in san francisco and as part of the pilot identified one site

located at the college hill adjacent to the reservoir in in in in be rna l heights and adjacent to the playing fields and the site that we identified for the third pilot is not managed by recreation and parks and is the responsibility of sfpuc so primarily the focus around the pilot program back in 2011 when you all directed the staff to initiate this effort was focussed on puc property for secondary use and since that time there's been quite a bit

of work to get those sites activated and construction done etc.. and we're working with other departments right now around creating a garden training academy and seeing some of the possibilities there and i say that to put some context around the presentation today. there is another

component that we're working on on as we think of pipelines and career pathways as well and with that i'm going to turn it over to yolanda and see how well she does knowing that she was planning on using slides today. >> you know i'm going to have to go but i want to thank you in advance i do support this and i very he sfgtv city of san francisco public utilities commission, ha watching. >> ever wonder about programs the city is working on to make san francisco the best place to live and work we bring shine won our city department and the people making them happy what

happened next sf oh san francisco known for it's looks at and history and beauty this place arts has it all but it's city government is pretty unique in fact, san francisco city departments are filled with truly initiative programming that turns this way our goal is to create programs that are easily digestable and easy to follow so that our resident can participate in healing the planet with the new take dial initiative they're getting close to zero waste we 2020 and today san francisco is diverting land filled and while those numbers are imperfect not enough.

>> we're sending over 4 hundred thousand tons of waste to the landfill and over the 4 hundred tons 10 thousands are textile and unwanted listen ones doesn't have to be find in the trash. >> i could has are the ones creating the partnerships with the rail kwloth stores putting an in store collection box near the checks stand so customers.

>> it seems like everyone in san francisco is talking about housing san francisco housing prizes are among the highest it tops anyone million dollars and rent rise unfortunately, this is not the first time housing has

been in the news thought california the cost of a home has made headline the medium prices for a house in the the $207,000 in california it is more than twice that amount and the laura u bay area is higher it's more than doubled the states so while more than half of the americans can afford the medium fewer in california and quarter in the bayer and now fewer than a 6th of san franciscans can afford it so why it housing in san francisco so go cheven condition tharz the obviously a high demand to live here the city is known for cultural diversities that attacks new residents and the credible opportunity our city

diverse and will daytime committee grows jobs as a result we estimate the number of jobs is at ann an all-time 0 hive of 6 hundred thousand in the 80 the population was 6 hundred and 75 thousand now, it's grown steadily and quickly the recent estimate is 8 hundred and 40 thousand the highest in the city's history and it's not only san francisco it is greek the bay area has $2 million for residents and jobs then in the 80 and the growth is expected to continue by the year 20403.9 million people unfortunately, our housing supply does not keep up with the demand i might not realize the majority of construction is housing that's