[cheers and applause]

>> good afternoon, everybody. welcome to the tuesday may 22nd meeting of the san francisco public utilities commission. role call, madam secretary. while you are getting that, i'll let you know that the items 16 through 21 o closed session will not be heard. placed on the june 12th agenda. >> president kwon. [roll call taken] >> we have a quorum. >> item number 3, approval of the minutes of may 8, 2018, discussion first, public comments second and then the

motion to approve and vote. that said, any discussion on the minutes? is there any public comment on the minutes of may 8? motion to approve? >> approved. >> second. >> president kwon: all in favor, ok, approved. item number 4, general public comment. in the jurisdiction and not on the agenda. a speaker card here for mr. chris shutes, welcome. >> thank you. is this on? very good, thank you. good afternoon, chris shuttes with the california sport fishing protection alliance, and long time participant in the hydro electric projects. may 16, my colleagues and i got

word a republican congressman from the san joaquin valley had attached an amendment to the appropriations bill to the department of commce. prohibit the national marine fishery service from virtually any participation in the don pedro and the graininger projects. last that evening, organizations including c.s.p.a. submitted a letter to the house appropriations committee proposing the amendment. on may 17 it passed in committee. i have a couple of paper copies, someone was supposed toring more and he has not made it yet. clear in recent filings with the federal regulatory commission, the city and the sfpuc clearly have a stake in the outcomes of the don pedro and the grange licensing proceedings. i hope we can agree that a

legislative rider that circumvents environmental laws and protections is not the right way we desi request it be on the agenda next meeting and ask the staff to draw up a resolution for considerion by the commission at that time. i realize it's short notice. however, the appropriations bill for commerce may move to the house floor in early june. and time is of the essence. some colleagues are here today tovid some additional context for now. i will gladly answer any questions. thank very much. >> president kwon: thank you. any questions? may i pass these to the secretary? >> thank you. >> president kwon: thank you very much. mr. drikmeier, peter, welcome. >> thank you, president kwon. and commissioners. peter drikmeyer, the river

trust. all aware scott pruitt and the trump administration have waged a war on the environment, and it's something we need to p attention to. and it's san francisco's values. i wanted to read you a few figures from a public opinion poll, on san francisco attitude towards water rates and water supplies. and the number one reason that people were much more inclined to support diversifying the water supply was the environment and the question was, or the statement, this proposal will be good for the environment by using other sources of water, less water will be taken from california rivers and more freshwater available to the fish, wildlife and plants that depend on it. and another question recycled

water for irrigation and the environment was the number one reason. the more recycled water we use the less we take out of rivers and streams and the scarceater supplies. good for the fish, plants and wildlife thatly on th. 84% polled felt it was a convincing argument for reliable water supply and having drought-proof water supply, got 73%. so the environment was much higher. so, i want to reiterate what chris requested, which is for the sfpuc to have it on the agenda about taking positions on the valedeo rider. >> president kwon: cindy charles. miss charles, are you here?

>> good afternoon, welcome. >> hello. cindy charles, a native from san francisco. for years and years i've been involved in the don pedro and legrange licensing an other issues on the river. long time conservation chairperson for then w goldet women's fly fishers, a signatory to the letter to the house appropriations commission in opposition to a horrible amendment. participation in the relicensing of the don pedro and legrange hydro electric products, excluding the national marine fishery service from continuing the long time scientific work alongside other federal, state and resource agencies is not justified a bit and is extremely wrong. i know my fellow people in san francisco would be deeply disappointed with the large scale roll back of environmental protections and regulations without any public input on such

a grand sweeping scale that seems to somehow benefit central valley political interests. such sudden and targeted dismantling of a long established process for dam relicensing is an attack on the goal of equitable use of water from the river. it is an improper policy change that is totally against the environmental values of san francisco. therefore, i am also requesting that the commission put on the agenda the next meeting and ask staff to draft a resolution of opposition to the amendment for immediate consideration by the commission. thank you very much. >> anne clark. miss clark, are you here? good afternoon. >> good afternoon. i'm vice president, friends, talk very fast. thanks so much for all that you do for our camp mather,

wonderful to have the john o'connell students at camp. yours is a terrific program for our city students, ourigh school city students, and we appreciate it so much. we look forward to seeingut camp mather and taking time to be withll the campers. a new corral and horse group will be at mather this year. so, we hope you get some time out to come and enjoy and be with us at camp mather. this year on september 26th we are going to have a friends and family afternoon party on september 26th by friends of camp mather. you'll be gets more notices, put it back in your mind. a fun event for little kids and big kids alike and here to tell you i'm embarrassed to tell you about my p.u.c. saga. there was a lot of construction going on in my neighborhood with pg&e and other construction

people. i did not pay much attention to my water bill, that's the truth. i just paid the bill. i got a notice from p.u.c. and ignored it. then i got another letter to contact p.u.c. well, i followed up on that one. it was a nic letter, but it had some points i thought i should pay attention to. and believe me, here i am an environmentallist who was not looking at my water bill. the good news was, i met a p.u.c. water inspector who came to my home. his name was matthew jay brady. he was wonderful. he and i went through my whole house together from top to bottom, explained to me what was going on. it turned out there was one toilet that was not working right and was causing the problem and needed fixing and causing my bill to go up substantially.

as i said, i had not paid much attention. the part did -- it was a part that was done, wore for one toilet. did not cost very much and my son fixed the toilet. so, thanks for all the information, and the terrific walk through my house with matthew. i'm just sharing that with you because there are probably a lot of others of us who don't pay attention but matthew did and you did, and my bill is much less. so, thanks very much. good job to all of you and especially matthew and finally, go warriors. >> what does the camp open? this year? when does the camp open? >> i think there is a preview, harlan, do you know? preview, when john o'connell, i think it's june 6th or something. >> i think it's like a week

before, or two weeks before it actually opens. >> right, i'll send you the information. >> ok. >> good, thank you. >> thank you very much. next speaker is barry nelson. mr. nelson. >> good afternoon. >> thank you, chair kwon and members of the commission. i'm barry nelson speaking for the golden gate salmon association. i would like to talk briefly about the tawalame river rider. golden gate salmon association is an industry association of th entire salmon fishing industry in california. the commercial boats, recreational boats, the charter boats, folks who manufacture retail gear, tribal interests, restaurants and more. headquartered in san francisco and because san francisco bay and the rivers that feed it are the most important salmon runs south of the columbia river. without bay delta salmon, there

is no salmon fishing industry in california, pretty simple. and that's an enormously important industry. there are before of our salmon runs really got into trouble a decade ago, $1.4 billion a year, 23,000 jobs spread up and down the whole california coast and up our rivers. it's a remarkably significant industry, but we are, we are here in san francisco for multiple reasons. i was at an event last friday on fisherman's wharf at a fish processing facility with a large group of g.g.s.a. allies, several hundred people, celebrating and san francisco chef, celebrating salmon and working together to restore those salmon runs. great event, but it comes at a really vulnerable moment. our salmon runs are in deep trouble right now. our jobs are in trouble. our industry is in trouble. 2008 and 2009 for those two

years, it was illegal to catch a salmon in the state of california. put people out of work up and down the state, especially here in fisherman's wharf. and we are very worried about a potential repeat of that, of the salmon season this year was slashed because of low numbers, those low numbers are because of two things. it's because of the drought, because we don't always manage our rivers as well as we should. so we need to make progress on every central valley river in order to help the salmon runs recover. that is one of those, and this rider would essentially take the national fishery service, the agency charged with protecting our salmon runs out of of the process. but i would urge you also to think about this as something much larger than just a debate about the future of the tawalame, and even debate of the salmon and fisherman's wharf. if the rider goes, it will encourage other aggressive attacks on the federal energy regulatory commission.

a number in recent years. there are about two dozen separate attacks on salmon in congress and in the regulatory agencies right now. those are two dozen separate attacks just on california salmon. thies, especially if the city is not active in opposition, it will encourage more of those bills to move forward. so, i would urge you to put it on the agenda, to pass a resolution encouraging the board of supervisors to take position in opposition. that i think would help stand up for san francisco history, san francisco industry, and what we all value, thank you. >> president kwon: thank you. any other public comments? general public comments? ok. item number 5, communications. any discussion, commissioners? >> i have discussion. mr. richie, i was noticing your

report on the water supply conditions. and the very low snowpack that we had this year. do you anticipate any problems because of that? >> steve richie, assistant general manager for water. i would not call it a low snowpack, it's less than median, but certainly better than 2015 and i think on par with 2016. so we fully expect the system to fill with runoff, in fact, i think hetchy should be full in another couple weeks. but yes, water bank is full and we expect the other up country reservoirs to fill as well. >> good. >> president kwon: any public comment on item 5? seeing none. other commission business, item 6. >> i have a little levity.

somebody sent me this piece, it was in "the chronicle" a few weeks ago, it was the opening day when the giants moved here, so that's 60 years ago. and of course we played the dodgers, and of coursehe won, but that's not what i wanted to read to you. so, the city was all flitter about the fact opening day and everybody was planning on going. reported that the san francisco public utilities commission meeting covered 29 items in less than an hour. [laughter] and our president could do that, too. so, that's nice that we are remembered. >> were you the president? 60 years ago. ok. so, thank you, mr. chairman. i did want to thank staff, and

then all the folk that were involved in the golden pride awards 2.0, took place last night. i had sent an email to the commission secretary a little earlier with a group photo, hopefully we'll have a chance to look at that at some point in time. i think the smiles on people's faces is worth 1,000 words. the event i thought was really well received. everyone here was there. and you could just tell that folks that sometimes are not a part of these meetings or a part of these conversations really appreciate being recognized. i thought the one thing that stood out this year over last year, and these things are intended to be organic and to grow and change a little bit, to accommodate everybody's needs, but also through input, there was some incredible production value in the videos and i'm not

sure who, who was responsible for that. it was really, really, i have not seen it. we do a lot of recogtion events in the city for a lot of different kinds of employees, peonnel, and i've never seen it really that good, so a kudos to whoever did that. the one thing that was missing at the very end, we had a chance to take a group photo, and carlan and kathy and juliette were not in the photo, steve richie, and so let's be better on that one piece next time. the emcee, however, was in. amazing, president kwon. amazing. >> well, thank you. a person that did not step back when asked who was emcee, but it was an honor to be there, and great, and applaud your vision for it.

and harlan, your wife described you as my vanna white. but it was a great image. staff are absolutely terrific. thank you. any other commission business? public comments? ok. sf-tv did video yesterday, so video of the whole thing. >> called and let me know that they were responsible for the coverage last night. >> wonderful, thank you. you were on tv. >> kudos. again, oh, all right. >> any public comment for item number 6? ok. so we are now moving to item 7, report of the general manager. >> good afternoon, commissioners. the first item is a cleanpowersf update. barbara hill. >> good afternoon, commissioners. barbara hale. today's cleanpowersf update will

cover service to customers, enrollment and regulatory activities. under item 10 later in the agenda, asking you to allow us to rely on calpine to support our programs. 81,000 accounts. opt-out percentage remains at 3.2%. so, we are retaining 96.8 of the customers that we enroll. the rates continue to exceed the opt-out, over 4,000 businesses receiving 100% renewable through the program. everything is moving smoothly. ahead to the july auto enrollment, mailing the enrollment notices for july 2018 enrollment. that will increase the customer count to about 105,000 accounts. adding mostly commercial accounts. seven customers so far have

opted out now that we have begun are starting to se sme modest opt-outs. regulatory activities, specifically the power charge and difference adjustment or exit fee and the customer choice report. on the power charge and difference adjustment, hearings have concluded at the california public utilities commission and we are working with the city attorney and with our colleagues in the trade association, cal c.c.a., preparing our briefs in the case. those briefs are due in june. we expect a proposed decision from the assigned administrative law judge to be published for comment in august. so, we are going to have kind of a quiet period here soon while on that case, while the judge drafts their, his proposal for the commission's consideration. as i reported earlier to you, the california p.u.c. staff published a report on customer

choice. they are referring to it as the green book. they did that on may 3. it's reported in "chronicle" and other publications. we'll be meeting with the p.u.c. staff to discuss the report morrow. raises questions about how the state will achieve its affordability, decarbonization and reliability objectives with the increased choice that is occurring in the electric market, and specifically, it raises fears that customers choosing to take service from c.c.a.s and customers choosing to generate their own power, like through rooftop solar, are going to compromise these objectives of affordability, reliability, and decarbonization. says there's no plan for mitigating the outcomes. does not discuss how the role of the california p.u.c. itself could or should change in the

face of the changes that they are anticipating, and offers no solutions. flagging the need for unspecified regulatory and legislative change. the california p.u.c. set a deadline for comment of june 11th on that report. and they scheduled a legislative style hearing, referred to them, for june 22nd. you can anticipate that will be very active, both in sacramento and here at the california p.u.c. helping to shape the outcome of the dialogue that the california p.u.c. has opened. with that, i'll take any questions if you have them. thank you. public comment? >> hetch hetchy quarterly report, dan wade.

>> mr. wade, how are you? >> doing well, thank you, president kwon. good afternoon. dan wade, capital, water capital projects and programs director. today update on the hetchy capital improvement projects for the period from january 1st through march of 2018. but also like to emphasize some of the work that started in march and is ongoing, with respect to the moccasin emergency. as you know, march 22, 2018, hetch hetchy water and power at moccasin experienced excessive rainfall and subsequent flash flooding, floodwaters continuing volume debris, sendment, downed trees and logs. and this flash flooding has serious detrimental effect on the assets, including moccasin reservoir and adjacent areas, as well as priest reservoir.

as you know, sfpuc declared emergency on march 23 and clean-up efforts and emergency repairs were immediately started to restore water delivery to the city. i would like to just show you a couple of photos, i know steve richie showed some photos right just after the event, but this is a photo that shows the floodwaters near their peak at about 1:40 in the afternoon of march 22, and what you are looking at there is the dam over on the left side, with the floodwaters within about a foot of the crest of the dam. which is something that you really you never want to have happen with a dam because overtopping is something that would be, that we want to completely avoid. and so at that point, and after seeing seepage on the downstream face of the dam, as you know, an

emergency evacuation order went into effect and downstream folks were evacuated. on the right side, the floodwaters are actually going through two spillways, one is the main spillway, which is kind of in the center of the photo, where you kind of see the water going off a cliff and then on the far right is the auxiliary spillway, built in the 1980s, to be able to provide additional spillway capacity. this photo shows the seepage that was emanating from the downstream face of the dam during the event. and this was another major concern during that event because we never want to see dirty water coming out of a dam. that could indicate internal erosion. since that time, we have done some investigations. we don't think there was

internal erosion in the sense a dam safety issue, we think the dirty water was from the reservoir. this is the upstream diversion dam that diverts creek flows around moccasin reservoir, an intake upstream of this structure that allows creek flows under normal operation to say bypass the reservoir and keep the hetch hetchy potable water isolated from the creek flows. in this event of course we had a major amount of debris come downstream and clog that diversion pipe and then the dam essentially overtopped and creek flows did go into the reservoir, which resulted in the emergency declaration. now, immediately after the event, hetch hetchy water and power crews, as well as contractors hired by the sfpuc went to work, they worked through the night on march 22,

and through the next several weeks, 24/7, essentially, to clear debris, reestablish flows through the diversion. this is the removal of debris from behind the moccasin, diversion dam, and on march 24, which is saturday, able to reestablish flows through the conduit, so the flows bypassed the reservoir and the facility was functioning once again, but there was major damage to this facility that i'll show you in just a moment. this is what moccasin reservoir looks like now. you see there's not a reservoir there. it's drained until such time sfpuc in consultation with the california division of dams is satisfied that interim measures are in place to safely operate the dam and the pertinent facilities associated with the

team. the d.s.o.d. has told us that they actually want to take jurisdiction of the diversion dam as well because they see that as a facility to the main dam. currently the hetch hetchy potable water flow is discharged directly from the moccasin powerhouse, you see off in the distance and fed directly to a bypass pipe that feeds to foothill tunnel, feed in turn to the san joaquin pipelines, completely bypassing moccasin reservoir. now, that is important for a number of reasons. one, it's a regulating reservoir, an after bay for the powerhouse and also regulating water reservoir for the water system, so in this condition, our operations folks are concerned about the lack of operational flexibility in case there is a disruption to one of the power generating units. they would have a disruption to flow of water to san francisco and so you wouldn't be able to

react and provide water from the reservoir when you have that type of disruption. so, there will be a lack of time, there would be changes in pressure concerns and some in pipelines because you have to have the powerhouse flow exactly in sync with the pipelinews and thirdly, we have less control over turbidity. so interim repairs and improvements made by october 1st of this year, so that sfpuc in consultation with the division of safety dams would be comfortable putting the reservoir back in service until longer term improvements can be made. and so i'll just show you some of the damage, this is damage at the toe of the main dam after the waters had receded. this downstream was included flooded, including the fish hatchery. we have a project plan to fix that as well as do some

recontouring of the channel and protection berm. this is erosion downstream of the diversion dam, so we are currently doing the design to provide protection of the dam, potential undercutting of the dam. we would not want the conversion dam to fail for a number of reasons, but primarily it's a water quality protection from the potable water. now we have started investigations and a complete condition assessment, both the dam and the spillways. this is a trench that was excavated to investigate essentially why we believe the seepage was exiting the face of the dam. and what it appears is that there's very pourous materials in the crest of the dam, and the water got as high as it did, the

water was able to pour over the concrete core wall which is buried in the dam. the top of the core wall is four feet from the crest, so the watertialeny went right off the top of the core wall through the porous materials and exited the face of the dam. this is more of that investigation on the face of the dam looking at some of the fines that washed through. and so what are the next steps? we'll continue the debris removal and clean-up, and repairs. we'll continue evaluation and analysis of the dam and spillways. dsod has requested and they are requiring a complete top to bottom condition assessment of not only the dam but all the facilities. reevaluating the hydrology. issued some small construction contracts but we plan to issue a couple more for interim repairs in 2018.

and then we need to assess the longer term needs and address funding needs, both for the interim repairs and the longer term needs. and so meanwhile, back at the ranch, still trying to get other work done. the team has obviously had a lot of work to do to address moccasin emergency, but we are moving forward with the mountain tunnel and for repairs. we did open bids earlier this year and anticipate notice to proceed for the interim repairs, this is a second phase of lining repairs that would take place starting this year with the construction contract and into next year. and then for the longer term project, we've started the environmental documentation, and we have completed 35% design. we have met with a technical advisory panel. we will meet with the management oversight committee in a couple of weeks.

and the -- this project is moving forward. you can see the lining repairs and contact ground planned as well as what was done in 2017 as part of the interim repairs and what's planned for the019 repairs. and we did recently complete the new shops and office building at moccasin. this is a fantastic facility. fortunatac, from the creek it did not get flooded. some other buildings that are lower at moccasin did get flooded, but this one stayed high and dry and it's a beautiful new facility and will serve our operations well. lastly, i would like to say although you did approve the moccasin pinstock rehabilitation contract earlier meeting this year, we have decided to cancel the contract because of the moccasin emergency. additional constraints on the

system that really need to take precedent over this particular contract, and so our plan is once the moccasin facility is back in working order, we would go back and rebid this contract at a later date. with that, i would be happy take any questions. >> dan, on the mountain tunnel repairs, you referred to interim repairs and now that we are focussed on the repair in place option for that facility, what is the meaning of interim? >> so, the meaning is that there are significant voids in the liner that need to be repaired. it's going to be several years before we are able to do, you know, start the repairs for the long-term project. and so interim repairs that are urgent, that should be taken care of and addressed prior to the long-term project. so, these are larger voids in the liner where some of the

liner has broken out. overall, the condition of the liner is very good, but there are certain, you know, portions that need to be addressed and -- >> is that work going to be replaced with the permanent repas? >> no, no, this -- this work, this will become permanent. so, we are not going to redo it. the sections of tunnel that are addressed with the interim repairs, will be part of the permanent fix. >> so they are interim but really permanent. >> interim to permanent. so, critical portions of the tunnel where there was more, there were more issues in these portions of the tunnel. >> i got the logic, sounds like -- these are the highest priority repairs that have to be made. i was just referring to, second, my mind is what's interim about this, i thought we had gone past that. >> yep. >> but also i think where you are getting it from is that when we looked at the bypass, we talk about interim.

and so -- and so -- >> made sense back then, i was not sure that terminology made sense today. yep. >> ok. thank you. >> any public comment on this item? 7b. ok. 7c. >> the next item is a quarterly audit and performance review, nancy holm. >> good afternoon. >> good afternoon, president, commissioners, deputy chief financial officers for insurance and financial services. today i'm presenting the third quarter audit and performance report for quarter three for 2017-18. in quarter 3, 37 projects in total, of which 16 completed, and 12 were in progress.

three audits began in the past quarter, the pacific gas and electric interconnection cost audit, and two franchise fee audits and years 15, 16 and possibly 17. objective of the latter two audits to determine whether the franchise p.u.c. payments were properly calculated and remitted according to contract agreement terms with the city and county of san francisco to share example of what the fees may look like, about 2.2 million collectively that the city collected in 2014. four audits or projects completed. include these listed here, first one is the omb audit for federal grants. secondly, self-certification for nerc cip compliance monitoring,

by the hetch hetchy staff for reliability standards. third, an audit of the sewer system improvement program, planning and preconstruction activities, contracted auditor. and lastly, audit of the wholesale revenue requirement, statement of balancing account fiscal year 16-17. this quarter's highlighted audit performed by the city auditor, planning and preconstruction cost activities. objective to evaluate the preconstruction process to determine whether internal processes were defined, effective and complied to. the recommendations made were to develop written project development and risk management policies and procedures, insure adherence, and perform and document construction project

reviews. management partially and fully agreed to all recommendations. for our current quarter outlook in q4, expecting to complete the city-wide fleet management audit that our agency is participating in, as well as finances, annual fiscal inventory, as part of year end activities. upcoming audits, compliance assessment for 16-17, and biannual self-audit for 16-17, scheduling coordinators audit, and another city services auditor review of lease royalties, administration, for oliver da silva incorporated. lastly, this is final table here, highlight our performance with current outstanding audits and recommendations. as of q3, we had 29 open audit recommendation, representing 87% completion rate. of the figure, there are three

audits that also remain open as well. we did close the go solar s.f. rebate this past quarter. a lot of the recommendations that are outstanding currently right now are due to the cycle nature. we are not able to close audit recommendations on a more timely basis because a lot of that leadership is being assigned to another city-wide department. and so we will continue to work with the lead department and implementing those recommendations. other audit recommendations that are open at this time again are due to other conversations that need to happen at the city-wide level, whether the department of human resources or working with other agencies that also have a stakeholder ownership in these recommendations. but our staff will continue to work on these outstanding items and report back to the commission on a timely basis. thank you. >> president kwon: thank you,

commissioners, any questions? >> yes. nancy, thank you. and i appreciate your inclusion of the prior year audit status. u were saying for the three listed, the primary cause of those items being open is the responsibility of other departments? >> yes. so, the construction safety management audit, there -- that was a city-wide review performed by the city service audit and multiple departments there, and so there is a lead department, also probably working with another oversighting agency in the city that would happen to take upon those recommendations and work with city-wide departments to implement the resolution. >> and within that, are there also recommendations that pertained specifically to the p.u.c.? >> not specifically for that one, no. >> if anything, i think the p.u.c. was highlighted for our

proactive practices and our health and safety. >> ok. and for the other two, the power enterprise and wastewater? >> power cells for two irrigation districts and long-term energy agreements are on a cycle, and renewed on potentially annual basis and those conversations have not happened yet due to an extension of the agreement. >> as i recall, they said we should renegotiate our contracts, easier said than done. >> part if i may say, is that with that particular audit, it was -- it was -- there was a gray area, the recommendns were, they were really recommendations for our agencies to consider as part of renegotiation, but not so much of a directive to establish like the, they had very specific methods and i guess calculations

and methodology that they wanted us to consider. but they realize that was not entirely possible, it is a situation where negotiation would take place between two parties. >> right. the reason i ask those questions, we had said as objective earlier, i guess about a year ago, that in the -- that in general, recommendations should be brought to closure within six months and if they couldn't be done in that time, that there be a schedule established for each audit brought to the commission for approval, basically saying some reason why it's not reasonable or possible to do this in six months and need more time and setting objectives for what the timelines were. they obviously don't exist for those three. but it is still something that, you know, the commission set the objective for that, and where we have audits open for a long

time, and some of those are, you know, cranking up some fairly substantial, you know, years of being open. that there be some kind of process that acknowledges what the issues are and establishes some kind of process for getting through to the end of it. even if it's a matter, other departments or city-wide effort we should ask them, you know, for what their plan is to get us to the end of this thing. >> i can -- i will take a note of that and see what we can do. >> ok. i would appreciate that. and i think as we, you know, proceed with this, i think this reporting is good, and i think it's the appropriate step forward. i think we just need to build into it. so, what do we do to follow up with these, how do we bring these to closure. let me just take a second, oh, different subject. we had had some things for a

while dealing with inventory accounts, and inventory control at the various shops. >> yes. >> we have, and -- if i read this correctly, the major audit has been open for some time has been closed. but there was also a subsequent review that found some residual issues that needed to be dealt with. did i get that right? >> going back to -- this is going back quite a few years, almost 5 to 7 years ago, the city auditor did commission a series of audits for each enterprise's inventory warehouse, focussed along the lines of internal controls and business process. and those audits to my understanding are now all closed. one of them did take a while, but it was resolved in the past fiscal year. you know, there was a follow-up audit on one enterprise, i don't have my notes with me for that one, but audits -- the auditor

can always return and do a limited scope follow-up audit, not just a matter of us responding to them that we did it, they will validate whether we took the procedures or not, and i believe they were satisfied in that case, with our resolutions, now, the city auditor can do another rotation of internal control audits for that, and they have not expressed the desire to do so recently. >> my memory is the earlier audit called for development of various information systems in the integration with maximal -- and revised version, said you have done that, but there is some implementation issues you still need to pay attention to. so you need to, you know, as you make issues, from inventory, as you move location of inventory

from one place to another, you need to update the system rapidly. a couple others like that. >> i c go back into the historical reports and see where those recommendations remain. i could provide an update to you. >> and i don't need a great deal of detail on that, i think. mainly i want to make sure my reading was correct. it is not surprising that after we implement, you know, the information systems that there are some issues with implementation, that's not surprising. it's important but it's t surprising. so, the important part that follows on to that is that those now are being tracked as compliance issues that we would expect would be addressed and closed in six months or a plan for getting there if it's going to take longer than that. let me make sure i have -- just

a comment on the improvement program audit, i think we have talked several times about just the importance of trust that our customers can know that when we are increasing their rates to pay for these projects that they are managed properly. so i think that that audit, number one, is very important to do. i think the findings are important to pay attention to. as i read through the responses the department made, i thought they were important and serious, but we need to keep on top of that as well. i think that's an important part of maintaining trust for the people that -- and then the last one is on the wholesale revenue requirement. there's some language there that i did not understand. the part i did understand was that some inappropriate charges got allocated to water that should have been power. a part i did not get was saying

there was an attention to reports or something like that. >> excuse me, the last portion you said? >> something about -- let's see -- material, not over the inadequate control over management review of analysis reports. and i'm looking at -- >> review of analysis reports. >> yeah. >> in that particular instance, there was, so agency staff prepared analysis to determine what costs are coming out of the financial system, how they are extracted and then included in the balancing accounts calculation. and there was an oversight of not extracting, of not excluding wastewater salaries, and that mistake included the number that you see here, the 72 million. and so when that, as part of the calculation, so when the error was resolved, it resulted in a

favorable adjustment to the retail customers and so what staff have done to kind of mitigate the situation from, and preventing that from occurring again in the future is to add additional reviews and more in-depth reviews by subject matter experts in finance to ensure that it's more than just one eye or one high level, it's a review of the compilation itself going forward. >> thank you. it's not uncommon for audits to say mistakes were made and need to correct it. this was pointed to something systemic, that's the way i read. and responses, systemic response and i appreciate it. i think that's all i had on it, thank you. >> ok, thank you. >> president kwon: commissioners, anything else? thank you very much. >> thank you. >> any public comment on item 7c? ok. next item is quarterly budget status report.

eric sandler. d.f.o. >> commissioners, eric sandler, c.f.o. i have a quick quarterly budget status report for you. i have the slides, please. so, the good news is that we are looking at positive net results for all of our operations and these projections are consistent with the numbers that we use to develop the biannual budget proposal. no significant variations versus what you saw in the ten-year financial plans in february. [please stand by]

various methods of the capturing surpluses when consumption exceeds our budgets. there is no neat way of doing that. it is an opportunity to take a look at the capital program and look at the incentive program that we have, and if there are any that are running out of money, this would be certainly the time to take a look. if staff to take a look at that, i would appreciate it.

you could report back as what the finding is on that. >> we will follow up with a the water conservation team. >> thank you. >> thank you. >> public comment, any public comment on this item? [laughter] >> okay. the next item, is a new orientation procedure for employees. recently, assembly bill 119 passed on to actually impacts our ability or impacted new employee orientation, and it relates to union access. and so one of the things that we wanted to do is enhance our new

employee orientation. and so we reached out to vince courtney and i think we came with something that will enhance our new employee training and orientation. so, cindy, can you review that, please. >> good afternoon. i'm the human resources director for the san francisco public utilities commission. in today's very brief update i would like to provide context and the outcome of the city why negotiation. as well as some of the changes and enhancements that we have made to our new employee orientation program. in late 2017, the city, through dhr, helps a meeting for negotiations with respect to labour unions under the recent state assembly bill 119. the outcome of those

negotiations resulted in new employee orientation sessions allowing for 30 minutes union access. it is during that time we respect -- we invite our respected unions to come and talk about union membership, the privileges of membership, the provisions of the memorandum of understanding, and however, they unions see fit to use that time. respective of the existing practice, we allowed 30 minutes time. the existing practice has always been to allow our respective union partners to come in for at least ten minutes. for now, that time has expanded to 30 minutes. the bill requires two fundamental things i would like to hat highlights. a public employer to give a union notice regarding new employee orientation of new employees of that unit, at least ten business days prior to the orientation. they comply with that portion of the bill by providing all unions with