facilities and the transformer, you can't provide the service. so we have gaps the charter amendment is intended to fill. the authority is power enterprise authority, so it's not specific to clean power assess program or the hechi power program. assuming it will get adopted, available for use by either entity. a challenge will be we don't have a credit rating for cleanpowersf, we need to get that in order to use that capacity, ok? so, hopefully that helped clear things up rather than cloud it further. >> because i'm, you know, it's helpful, that's the first i've heard and i don't know if any other commissioners understand this charter amendment that we are going to be considering and looking at. i understand, and i don't know if it comes for a vote or review by this commission, but in june.

right? >> it's moving through the board process. supervisors peskin, tang and new safai have associated themselves with it. it has had one reading at rules committee, the second reading is tomorrow. and then it will be before the board for consideration and it is targeted for the june 5th ballot. >> but i just want to make sure that the main purpose and we talked about it as part of the business plan is that right now for new facilities, distribution, stuff that we can't fund through revenue bonds, we have to pay cash. and so this gives us a vehicle to debt finance using our revenue. and so we are unable to do that on any new facilities. so, that was the thinking of

trying to make the power enterprise. we always had the ability for clean power, not cleanpowersf, but clean power, we have that authority already. but as barbara and they have said, we are separating the business units, or we have hechi and we want clean power to stand on its own. so we started having clean power, you know, at a really relied on the power enterprise and initiation or the start, but now we have it where it's true and not co-dependent, so we want to continue that. >> right. >> i understand that. i just was surprised to first learn about the power revenue bonds charter amendment, you know, at a board meeting, frankly. this is the first i've had it explained. i approach -- appreciate it.

>> i have a number of questions. so, basically this is a line of credit. >> yes. >> in simple terms. i'm fuzzy on the agreement terms and one area the -- where am i here -- the line of credit, i don't mean the line of credit -- where -- just a sec. oh, the debt service ratios. why is it lower, why is it -- >> than our other enterprises? >> right. >> because we wanted the maximum flexibility that we could have for compare. >> and then for the l.o.c. fees, with the range of the percentages, 1.85, how does that

co-exist with the debt service coverage? >> ok. so, depending on the debt service coverage, so, let's say we are in the middle of this agreement and barbara and mike come to me and say eric, we have a great opportunity to procure power at a low cost but they want a letter of credit to back up the commitments under the agreement, which is not uncommon. i would say ok, let me look at our financial statements, let me look at what our debt service coverage ratio is, and if it's above 1.50 we get the best terms under the agreement and we pay j.p. morgan 1.85% to issue that letter of credit. if our ratio is below that, if it's between 125 and 150, we pay a little more. if it's above 120, we pay the

higher rate. >> ok. so, is that the debt service coverage in the -- we don't have that for clean power. so that would be the power enterprise. >> it's actually clean power. that's a very good question. so, for the purposes of the agreement, any outstanding credit as well as the loan to the power enterprise are considered debt service, that's what's being compared to the net revenues. >> ok. >> uh-huh. >> and getting back to the basic loan from the power enterprise, has clean power paid that back? >> there's a schedule of repayment and clean power has made the payments on schedule. >> and that's over how many years? >> it's a five-year loan. >> thank you.

>> i have one more question. trigger and what is the estimate time you think clean power will have its own rating? >> a track record of operations, a track record of c.c.a.s growing and being successful, a number of them have approached credit rating agencies to receive credit ratings. we have talked to a number of agencies as well. they are working their arms around how to rate these entities. i can't give you an exact answer. what i can say is the terms and conditions of this particular agreement are consistent with an investment rated enterprise. so, if we operate in these parameters, it will enhance our ability to secure ultimately an investment grade rating. >> thank you. >> i think we had a motion and

second. some discussion. any public comment on this item? >> hello, 350 bay area. thanks to mr. sandler, mr. heinz, ms. hale and their work. to commissioner vietor's point and the discussion that happened, we definitely want cleanpowersf to have its own credit rating so we can use the existing authority to issue revenue bonds versus general obligation bonds to build stuff, energy infrastructure that we keep talking about over and over. so, anything that we can do to get that credit rating, which we definitely made very clear to staff, we are supportive of and to the extent that this holding to this for a year or two might get it done, we really need that

credit rating. the power enterprise does not want to take the weight -- cleanpowersf to the commission and the advocates have had for many, many, many years now. i think the question which hopefully could get elaborated a little more now is how the cash reserve covenant that was mentioned will impact local buildout. i know in the -- i can't remember the name of the financial document but kind of the allocation of revenues going forward through i think 2022 that we had originally seen maybe last year, i know that investment in what was called supergreen projects or local build was starting i think in 2020, and we raised a bunch of heck about that at the time how we needed to get started sooner than that, based on what i just saw. it looks like the accumulation of reserves might go well beyond

that, and this covenant through the early 2020s unless i would assume that excess revenue could not be diverted to such projects until after that. so, if it pleases the commission, i would think that it's useful to, to discuss how this financial agreement will impact our ability to, will positively impact our ability to build our credit worthiness, but negatively impact our timeline. >> thank you. >> we did not have a motion or second, so can we have one, please? >> so moved. >> second. >> any other public comment? all in favor? >> aye. >> opposed? next item, please. >> item 12, approve a plans and specifications and work contract number wd23 -- 2838 for amount

not to exceed 5,965,300, for e the -- >> good afternoon, president kwon, commissioners. this item is before you because we have only received one bid for this construction contract, this contract is to address taste and odor issues at sunol treatment plant from local water sources. if we have negotiated with the contractor, and it's still roughly 10% over the engineer's revised engineer estimate. we will continue to negotiate, if the commission approves this item, we do need, we actually received five contractors picked up packages. one of the contractors, one contract in sunol valley for the

system, another contractor chose to bid on moccasin project, and the other contractors were nonl.b.e. and did not choose to participate. if we went out to bid again, i don't think we would get additional bidders. this project is also time critical because we have scheduled mountain tunnel shutdown for january 2019, and so we would need to get this construction substantially complete before we could do mountain tunnel shutdown for additional repairs. >> i'll move the item. >> second. >> thank you. >> discussion, commissioners. >> i have a question. why is there such a vast difference between the original engineer's bid and the revised? >> to be honest, the consultants' estimator made a mistake and left out several items. >> any public comment on this

item? ok, let's vote. all in favor? aye, opposed, next item, please. >> item 13, discussion and possible action to authorize the general manager to consent on behalf to the development agreement between the city and county of san francisco seawall lot as i relates to the matters under the jurisdiction, consent to the mission rock project interagency agreement and seawall and monitoring and reporting program. >> good afternoon, deputy general manager. title speaks for itself. another development agreement. this is mission rock, giants, across from the stadium. it's been in the works quite a while and we would like permission to sign a development agreement. >> i'll move the item. >> second. >> discussion, commissioners? any public comment?

all in favor, aye. opposed? oh, public comment? we have time. now we are all looking at you, all right. no public comment? all right. all in favor, aye. opposed, moving on to closed session. >> read items prior to calling public comment. we will hear item 16, anticipated litigation as plaintiff. would you like to call for public comment? >> yes, public comment. for matters to be discussed during closed session. do we have anyone? ok. we have a motion on whether to assert attorney/client privilege regarding the matters listed below as conference with legal counsel. >> clarify item 17 is not being

heard under closed session, so only, you are entering closed session only for item 16. item 17 is not being heard. >> move to assert. >> second. >> all in favor? >> aye. >> opposed? >> all right. >> motion not to disclose. aye. ok. next item is item 20. other new business. anything, commissioners? >> i would just like to bring up something, it would be nice to have our, our screens working again. >> yes, it would. >> what do we have to do to make that happen? >> a hammer.

>> from my understanding, i think the equipment is old and it's hard to get parts, and i think they are scheduled to put new systems in, but i don't know when. >> i can check. >> i can relate to the comments about being old. >> replacement parts are hard to come by. >> can i -- make a request? can we prepare a save the date for the second annual golden pride event? can we do that? because still, i was speaking with colleagues, and they did not have it calendared. >> what is the date? >> second part of my two-part question. >> oh, sorry. i think it's may. >> right? >> but if we could get a save the date to distribute that, it would be kind of awesome.

>> the monday before memorial day. >> i would have that information, i'm going up country to moccasin and talk about the golden pride award in the event, and so, did you go to c.d.d.? >> i'm doing that tomorrow. >> so by tomorrow you will have -- because, but yeah, i think we should send out save the dates but while you are up there, i think we should hand stuff out, because a lot of folks don't receive email. >> my hope is we will receive some branding, if you have a conversation on some low go and, but when i was speaking with some of my colleagues, we did not have it calendared. my hope is we'll have a save the date distributed and hard cope and electronic, as a formal commission. if there's no objection.

>> nope. >> no, good idea. >> perfect. >> and tomorrow we are tabling it, i think. >> yes. >> golden pride. >> are you going to be with me at c.d.d.? i think you are in a different location. >> i think i'm in southeast. >> i know. >> c.d.d. >> you are going to c.d.d., i'm going to moccasin, and just came from millbray today. >> ok. go where we are told. >> any other new business? >> thank you for your service. >> my pleasure. >> any other new business, commissioners? nothing else? >> public comments? >> public comment. ok. this meeting is adjourned. thank you very much for your time, everyone.

>> they tend to come up here and drive right up to the vehicle and in and out of their car and

into the victim's vehicle, i would say from 10-15 seconds is all it takes to break into a car and they're gone. yeah, we get a lot of break-ins in the area. we try to -- >> i just want to say goodbye. thank you. >> sometimes that's all it takes. >> i never leave anything in my car. >> we let them know there's been a lot of vehicle break-ins in this area specifically, they target this area, rental cars or vehicles with visible items. >> this is just warning about vehicle break-ins. take a look at it. >> if we can get them to take it with them, take it out of the cars, it helps.

>> they tend to come up here and drive right up to the vehicle and in and out of their car and into the victim's vehicle, i would say from 10-15 seconds is all it takes to break into a car and they're gone. yeah, we get a lot of break-ins in the area. we try to --

>> i just want to say goodbye. thank you. >> sometimes that's all it takes. >> i never leave anything in my car. >> we let them know there's been a lot of vehicle break-ins in this area specifically, they target this area, rental cars or vehicles with visible items. >> this is just warning about vehicle break-ins. take a look at it. >> if we can get them to take it with them, take it out of the cars, it helps.

brian larkin. brendan mcnulty alexander tonisson. >> okay. at this point i would like to adjourn this meeting momentarily in observe the service and county that mayor lee gave for the city and council.

>> we'll resume the meeting. this meeting is now in session. >> item two, opportunity for the public to comment on any matters within the jurisdiction that are not on the agenda. >> good morning committee members, i'm dr. derek kerr, a whistle blower. why do organizations retaliate against whistle blowers? it's because whistle blowers have inside information about wrong doing and there by represent a threat. whistle blowers are viewed as insider threats. unfortunately the whistle blower program's quarterly report issued in december includes a

bulletin warning about insider threats. we are told these are employees who "negatively affect organizational assets." that definition could qualify whistle blowers as insider threats because it depends on who defines what is a negative impact on an organization. the term insider threat is derived from national security programs that were installed after the chelsea manning and edward snowden revelations. importantly, it applies to intelligence agencies that handle classified information, not to city agencies that handle mostly public records. this bulletin targets

disgruntled employees without the difference of those who want to fix a problem and those who are criminals. even speaking out is labelled as a red flag. the bulletin doesn't mention non disgruntled managers who contented contentedly harass subborednants, although they are true insider threats. the whistle blower program promotes retaliation and deteres lawful disclosers of misconduct. so i hope you'll pay attention to this idea when the whistle blower presents to you at the next meeting.

thank you. >> any further public comment? item three approval with possible modification of the minutes of november 20th, 2017, meeting.

>> so is there a motion to approve? >> i move to approve. >> second. >> all in favor? >> aye. >> public comment. >> public comment on the minutes? seeing no public comment, the minutes are approved. item four presentation from public works regarding the 2008 and 2016 health bonds and possible action by the committee in response to such

presentation. >> can i go ahead, are you ready? >> yeah. >> good morning members of the cgoboc committee. i'm here to give improvement bonds program from 2008 and health and safety from 2016. let me go ahead and start with the 2008 program first, it's a little shorter and hopefully wrap that up quickly. in this first slide, just wanted to point out that the original bond authorization was 887.4 million, the new amount of

900.2 million reflects additional interest acure for 10 years and has been appropriated to the bond program. for all intended purposes, the rebuild bond program has been completed just as a quick recap. the zuckerberg general hospital was completed in may of 2016. patients moved in and then the final project close out was completed that same year in july. the last remaining task before we can close out the hospital project at least in terms of oshpod is final reconciliation

of permit fees and at this point, the team is working through the documents to get that completed most likely the first quarter of 2018. i want to mention one item, there has been ongoing litigation between web core builder, the general contractor and one of the subcontractors. web core builder has served the city with a cost complaint, primarily due to subcontractors claim of errors of omission. at this point, the claim has been forwarded to the city attorney's office for further review and direction. just a quick recap of some of the accomplishments beside the new hospital being completed, the team has also been progressing three of the larger projects including the san

francisco building five tunnel and connection project, m.p.c seismic upgrade and low voltage installation project. all three are in project close-out phase. and the team's goal is to close out all three projects by first quarter of 2018 with the remaining funds in the project, the team continue to work closely with the department of public health on any additional projects that involve operational enhancement and or patient safety. and then just moving on to the last slide, the only thing i want to point out, the total expenditures to date is 98% of the bond authorized to date. as i mentioned earlier, the remaining funds will be used to

close-out the project, primarily focus on the permit fees as well as delivering any additional projects requested by the client. should i go ahead with the 2016 or wait for questions for this program? >> let's talk about 2008 first. i'd like to -- why don't you start first. >> you know, i didn't have questions joe, i just wanted to report to the committee on the phone discussion we had last week about this project and closing out there of. i want to elaborate a little bit more on the subcontractor claim that is outstanding from khss, joe? >> correct. >> against web core and the action that web core has taken to involve the city. i'm just going to say based on what joe told me, it doesn't

sound like a real strong claim. joe gave me the contact name of the woman, the person in the city attorney's office, elaine o'neil. ken, do you know her? okay. i'll talk to you later then, about the scope of the claim and it sounds like what's called a total cost claim and they're going to have a real hard time prevailing with that based on my experience. so as i said, i will follow up with ms. o'neil with the particulars and follow up. >> what is the total financial risk of this claim? >> 18-20 million? >> that's correct. that's an estimate. i have not seen the actual documents from the subcontractor but there has been discussions of up to $18 million claims from

the subcontractor. >> on a subcontract worth about 100 million? >> that's correct. >> they have a tough road. >> but this is not a risk to the bond program itself, the bond program doesn't have 18-20 million dollars left. is that interpretation correct? anybody know? >> i mean, i was just looking at this, it's june 30th financial report. back then there was a balance of about 12.2 million. >> i can quickly talk about the $12 million remaining in the project, the biggest portion of the 12 million is for set aside for soft costs, for remaining project management and the permit fees.

we anticipate about 3-4 million dollars of fees that need to be paid out still. what's remaining outside of the 5 million is about $3.6 million for construction contracts. there's about $3 million of additional set-aside for fall on projects and then about $3.2 million of funds that are set-aside for audit, csa services and another 1.1 for program contingency. >> do we know the legal fees being paid to pursue or defend against the claim? are those being paid by bond funds? >> to the extent that the project program still has funds, we are allocating the city

attorney fees toward the project. >> this is my observation, in the very unlikely case that this suit against the city prevails, i would think that the contract is really between the contractor and the city. they don't care who pays the fund. if we have depleted the bond funds i would assume it goes to general funds, i'm not a lawyer, but we're all at risk here. >> further on that, the claim that brought is against the general contractor, i would say a good part of the exposure is to web core and not the city. web core has named the city but it doesn't mean the city has that much responsibility

inevitably. even if it's 5% of the value of the claim, they would name the city. a number like this, and given that they have already had some change orders that web cores that given via the city, the city has given via web core some change orders to kksns, this is a total cost claim, you guys have abandoned the job, i'm speculating a bit. based on what i know, it will be hard to prevail. but again i'll follow up with ms. o'neil. >> so given that brian is following up on the last issue with the bond and talking about it for about 10 years, i would like to propose that this doesn't make our agenda again unless brian brings it back with this issue. >> i'll follow up but i think we have heard from joe that they're really close to closing it out,

even though the final amount of close out with oshpod, any other agencies? >> not to my knowledge. >> and the hospitals and service. >> that's correct. >> only. that's what we like to hear. >> and has been for years. >> i think it's agreed that pending this report that you talked about earlier, what is the next step we would deem to formally close this bond. the project on the bond. i think we had a final closing report in the past? >> i would have to check with our auditors to see if they scheduled this one for a

close-out audit or anything of the type. tonia will be here later this morning and might be able to let us know that. that would be the last item that would logically come to your calendar. >> i think the decision of this committee is pending anything that blows up, we will follow the normal kind of bond closing procedures that would be in reporting style and not be presented to this meeting for this discussion. agreed? >> yep. >> sounds good to me. >> thank you. >> i'm done. >> okay. so -- with that said, let me proceed on to the second half of the presentation, the 2016 public health and safety bond program.

good morning again. the public health safety bond program quickly consists of six project components that span across three departments, public health, supportive housing and the lion's share for dph of 272 million, homeless support housing 20 million. moving on to executive summary, the teams have been continued to focus on completing the design and permitting of the various bond projects with the goal of starting construction this year with the early part of next year, including seven of the 19 core projects that are part of the zuckerberg component.

there are six fire stations in the neighborhood fire station component and 440 turk street for the site of the new homeless resource center. in terms of next bond sales, the team is working on the cash flow analysis so that we can sit down with the office of public finance and talk about the next bond sales. one of the risks in terms of risks for the entire program i think continues to be unprecedented bidding project that all projects are seeing probably due to lack of sufficiently skilled trained individual and subcontractors bidding. and the recent fires have made the situation worse because it's pulling contractors to the north bay. another risk that we've

identified that's putting a strain on the bond community health center component has to do with the poor performance for many of the existing community health centers. this poor seismic performance is necessitating the need for projects to add seismic retrofit as part of the base scope for projects at this point. and jumping to update for each of the individual bond components. first one is the zuckerberg hospital component. overall budget and schedule remains the same as previously shown. expenditures have been fairly low, primarily because activities have been on the design phase of all the projects. the team will be starting construction in the first

quarter of 2018. we currently have two projects that are in the award phase -- one is ready to be ntp'ed, the second project which is right on the line of being awarded, unfortunately we've had to deal with a bid protest, so we had to rebid the project. this is our first time rebidding, we're in the process of dealing with the bid protest again, only have two contractors, so you can kind of see the bid environment at this point. so that's the two projects for zuckerberg. the team is working on rsq, we're intending to on board a construction manager/general

contractor to help deliver the next four projects, including seismic retrofit, department relocation and it infrastructure. all four projects amount to about 30-40 million dollars of construction scope. the idea behind using the cmgc, minimizing schedule impacts to hospital operations. the zuckerberg component is completely different from the rebuild program primarily because all the work we're doing is in a functional hospital, every project we deliver requires close coordination with the clinical operations and there's a lot of call them domino affects, in order for one project to start, it requires others to get out of the way. we're going to have -- the project is working on a lot of enabling projects that in order

to allow the construction projects to proceed. moving on to the next slide, this is the southeast health center component. it's located off of third street and keith street in the bayview neighborhood. the team is working on the design phase of a new two story 22,000 square feet new building adjacent to the facility. construction anticipated to start in 2019. here is kind of the most updated rendering we have for the new building whereas -- as a matter of fact this afternoon we'll present to the city design review for the first phase with cdr. okay. and moving on to the community

health center component. there's two projects that the team is primarily focused on currently. cash emission health center at 17th and pawn and maxime hall at pierce and ellis in the western edition neighborhood. both are targeted to start construction december of 2018 in a couple of months. as i mentioned earlier, one of the huge impacts or risks on this component is the fact that we have added seismic scope to both health centers. both projects have been deemed to be a seismic hazard rating of three plus to four. four is a building that is subject to partial or total collapse in the event of a major earthquake. we did similar assessment on chinatown public and the results

came back very similar with seismic hazard rating of four as well. so what that means is chinatown public will most likely be deferred to a future bond project so the team can focus on delivering a complete project for cash emission on maxime hall. moving on to the facility, i do want to point out this slide does include a revised component budget 48.6, showing allocation of 5.1 to the fire station to adf allowing the team to deliver a complete adf. the original project budget was inadequate, it didn't include enough funds to address the

conditions and market condition risk. so the team has been working closely with the neighborhood fire station project manager and the fire department so that the $5.1 million can be allocated to adf. so at this point, the adf project is moving to 100% construction document in the second quarter of 2018 with construction to start around august of this year. and then moving on to the neighborhood fire station component, likewise, the project budget shows a reduction of $5.1 million which has been allocated to the facility. overall, the fire department budget remains 58 million, there really has been no change to the

overall budget, just more of a reallocation within the two components. at this point, there are six fire stations identified for the seismic improvement, which includes the host tower removal scopes. that will then improve the earthquake performance of the six fire stations. the next big milestone, because of some historical issues associated with the fire stations, is to go through an environmental impact report process, which will take approximately a year to be completed and with that approval will allow the construction to start. and then the last component we'll talk about today is the homelessness and homeless service sites. the current project that's been

in development for a while is the 440 turk street, this includes the purchase of the area -- of the space i guess. and also on board a design-build contractor to help deliver this critical project. the current schedule is to have the rfq advertised by the spring of 2018. and then the last slide i have is a slide regarding the status of the budget and financial plan, as i mentioned earlier, look at the percentages across the board of the components, relatively low and the reason for that is because it's primarily driven by expenditure toward design fees. as we move from design to

construction, there will be a ramp up of expenditures for construction contract that will be awarded. so at this point, that concludes my presentation for the public health and safety bond program. i'm here as well as other members of my project management team that can help specific questions you have about each bond component. >> joe, i wanted to get a quick review of what is included in project controls, you have that pie chart. >> okay. is this in general or particular -- >> well, i have to say in general, it looks like the range is a quarter to a third of the construction costs. i wanted to see what was in there. >> so in project controls, this is everything outside of the

construction contracts. so it includes all the design fees associated with design of the project, includes the construction management support services, which also includes additional inspections, whether for special inspection, in particular for the oshpod components, there's a layer of inspection required which is to have what they call an inspector of record, which is an additional cost carried by the project sponsor to make sure the work is done according to the specs and these employees need to be certified by the state as an inspector of record. >> okay. that would be some money. >> joe, a couple of questions. back on the community health