>> good afternoon, ladies and gentlemen. i would like to call this meeting to order. it is july 10th, 2018. madam secretary, please read the role. [roll call] >> and thank you very much. these are exciting times. i have a special announcement to make. item number 12 will not be heard today.

it will be rescheduled until june 24th. we apologize for any inconvenience. i'm sorry, july 24th. our lungs -- long-standing commissioner, and cain, we want to recognize it will be your birthday this friday. we will, in advance, wish you a happy birthday. >> thank you very much. friday the 13th. [laughter] and may i make a statement. i would like to say how it is getting older. that's the end of my remark. [laughter] >> that was pretty good. i like that. next item, pleased. >> item three is approval of the minutes of june 26th, 2018. >> commissioners? >> is there any discussion? are there any public comments on the meeting minutes of june 26, 2018 wheat hearing done, public

comment is now closed. the motion carries. next item, please. >> item of four's general public comment. they may address the commissioners on matters that are in the commission pose's a jurisdiction and not on today's agenda. >> i have a number of speaker cards. if you bear with me, i will read each one of them. there are seven. please line up on the left-hand side, we will take you in order. the first speaker is dave warner, cindy charles, allayed at dupree. tom schwarzkopf, sorry, tom. ian ran, peter, i'm sorry, duck meyer. and mark gonzales. did everybody get that? dave? good afternoon. >> good afternoon.

it is an honour to speak with you today and thank you for serving on the commission. as you are likely aware, a number of people including president kwon and mr ritchie have been graciously meeting with a number of us representing the environmental interests and commercial fishing interests. most recently regarding the socio- and economic studies. again park thanks to you, a couple of these meetings included the author of the studies. in the most recent meeting, he took us through an excellent level of detail of his study. they provide us with references to research papers and other documents that led to the studies. we have reached some preliminary thoughts about those reports and how they have been interpreted. however, before sharing the information more broadly, we have requested a meeting with them to discuss our thinking and possible conclusions with them. the reason for bringing this to your attention is to ask if you

can hold off on any kind and letters to the state water board or pollute the publicity related to the analyses until after we have met with them. if that is not realistic, would be happy to bring our comments to the commissioners and we are open to other approaches. most importantly, thank you for the series of meetings and continuing dialogue. we very much would like them to continue. thank you. >> thank you very much. next speaker. is at cindy? >> yes, i'm cindy. hello. i am the conservation chairperson for the golden west fly fishers and i'm a native san franciscan. i wanted to talk about the state water board's recent release of their float criteria. in this report, they acknowledge that 60% of unimpaired flow would be necessary to protect fish in the basin. their recommendation of 40% does not go far enough, but it is moving in the right direction. as a native san franciscan, i

can understand the need to protect san francisco's -- san francisco's source of water onto the importance of a strong economy by the need to be a balance on the use of our water source to protect the salmon, steelhead and water quality and health of the river, delta and other tributaries of the san joaquin watershed. as a long-time angler, california fisheries have sunk two extremely grim levels. salmon, steelhead and other populations are suffering drastically and the state water board's pond is a long overdue action to provide some relief, finally for the fish. it also protects the water quality for human consumption. i would urge you not to oppose the water board's modest plan. thank you very much. >> thank you. >> good afternoon chair courtney. i am here for the record.

it has been a while since i have spoken at one of these but i have been following the conversations lately on s.f. dove t.v. thanks for broadcasting. clean power s.f. is very important to me. we have -- for a long time. i was here and spoke in favour of it in 2013. i spent my nights -- i spend my nights on my trips here in alameda county where the cca is live there. i am staying in a commercial account facility. hotel. i am experiencing the cca power there. this is a long time in coming and i'm looking forward to the item 12 being heard and in reading through it i saw lots of parts that were blacked out. it doesn't tell me a whole lot about what is going to be happening in this integrated resource plan. i hope that these details will

be revealed more into the public as this is the public power program. i gate -- i get to experience public power here and in writing in one of those nice new munimobile cars on the way here. thank you we have that. but the people are hungry for public power. alameda did it pretty quickly. i don't know the whole timeline. i know this is a big project. i and the other people of san francisco are hungry for this public power. i hope we will take action and bring the citywide sooner rather than later. thank you. >> vice president courtney: tom? if you don't mind, state your name for the record. >> my name is thomas. i come to the board today with good tidings from the north fork of the river. i have been attending a music festival there for the last ten years or so.

during the drought, there was little or no water flowing through those two tributaries. but with the wet winter of 2017 and 2018, part of the watershed has been restored. i mean the trout population has come back in full force. i just wanted to remind the board that when we have increased flows, the ecological systems will come back, and they will come back really strong. so i'm speaking on behalf of raising those flows to 40% or 60%. >> president kwon: -- >> vice president courtney: thank you. thank you for being here. >> thank you and good afternoon. i am a native san franciscan representing the bay keeper and the league of conservation voters. like the others here, i'm here to respond to last week's released.

we ask that the commission, at a minimum cat does not align itself with the trump administration and fighting the water board's efforts of getting water management. we hope that there is cooperation with the state board to improve flows in the excess of the 40% objective prescribed. as we have shown in recent surveys, we are supportive of conservation efforts to find water resources. our region has demonstrated a willingness to conserve for the sake of the river and the san francisco estuary. the bay area has demonstrated they can meet existing demands within the allocations proposed by the water board and expects water agencies to pursue innovation and conservation to meet the demands of future jobs and residents. the river cannot support a native ecosystem. so an overwhelming up majority of the flow is obstructed or reserved for worst-case drought scenarios. it is time to implement innovations for the sake of

meeting future growth and restoring a functioning river ecosystem in which native fish are favoured over non-native predators. thank you and we look forward to working with the commission to implement the objectives of the state. thank you. >> vice president courtney: thank you. peter? >> good afternoon chair courtney and commissioners. i am with the river trust. we mentioned our recent survey. i don't know if you had a chance to look at it. it was 402 registered voters in san francisco that and it took place in late may. a few things we found. seventy-five% of san franciscans could identify their water source. you have done a pretty good job of branding that. only 12% could identify the river as the source. we need to do better on that one. ninety-three% the people conserve water during the drought. of those, 94% said environmental

protection was a motivating factor. we have 64% saying it played a major role. seventy-two% said there would -- they would be more likely to conserve water if they knew it benefited the environment. only 21% said the same thing if it only allowed more development. ninety-two% were supportive of measures to protect and restore the river. that is pretty good considering they did not know that was the force. and 97% supported the restoration of the san francisco bay. there is also strong support for a housing with 80 8% supporting affordable housing and 69 cents mac market rate housing. not much support for more office space. only 40%. we asked if you would be more equal are less likely to support measures that enable commercial development knowing the implications they may have on the environment and 66% said

they would be less likely. ninety 8% supports the use of recycled water for irrigation. that is good. seventy-nine% said they would be more likely to support it if it benefited the environment. only 37% say they would be more likely if it just enabled more development. we also asked about groundwater and we know this has been contentious. fifty-three% support for that. if you be more likely if it benefited the environment, 54% said yes. if it only enabled more development, only 18%. people are, why are they conserving water, that is a question we need to ask. finally, we asked about opinions on the plan bay area. projected to add 1.3 million new jobs and 2 million more people to the bay area between 2010 and 24 tee. eleven% thought it would improve their quality life and 65% said

it would worsen their quality of life. you play a role in these issues. we can let people know there are trade-offs when it comes to how we develop and why we are developing. and that the balance is with the ecosystem. so i hope we can work around that together and i am encouraging you to look at the water collect -- quality control at your next meeting so we can have that discussion. >> that was a pretty wide range of polling. did anyone contemplate polling seawalls? >> no. we did not get into that. >> vice president courtney: inspecting the bay? >> no. no. we should work together on the next one. >> vice president courtney: good idea. thank you. >> i have a question too. how were those people selected? >> it was random. it was all explained in our report which we posted online.

it was a professional survey where they have the voter database and they randomly reflect people and call as many times as they can before they get someone. i think it reflected a four% margin of error. >> vice president courtney: thank you, peter. >> i do believe there was a seawall survey done in advance of the ballot measure that is coming in november to rebuild the seawall. i would be happy to share some of that data. >> vice president courtney: please share. thank you, commissioner. next speaker, mark gonzales. >> hello. i'm a native san franciscan. my distant relatives came over as the first recorded spaniard to marry an indian. our family has been in california since the 17 hundreds in -- and native americans for thousands of years. i imagine what the river systems were like then. since then, we have decimated nearly every river in californ california, and today, we are asking for a ten% back.

it is like if someone robbed 80% of your assets and then the robber came back to your house and said well if i give you ten% back, how is that? you would want your 80% back. given that this is a long detailed study, it showed that 60% is required. sixty% should be the goal. i realize you may not be able to do that back but the whole emphasis is returning to the river and still getting your use of what you need to. but on the extreme, if i was trump the end, i would say tear it down the dams and let the patient -- fish pay for them and let them deal with that. but this is a reasonable request. long-term developed and it should be honoured for the scientific value it has. thank you. >> vice president courtney: thank you for being here. next speaker card i have is for hunter.

>> good afternoon, commissioners. i am a resident of the mission district where i raised my kids. i am also on the conservation committee for the san francisco committee. it is not already painfully obvious to you, the bay delta plan and the water board plan is a leadership test for the san francisco puc. we have been in a policy gridlock and how to restore the san joaquin valley watershed or literally decades. this is the first major movement forward in a very long time. i think that p.u.c. has to make a decision. will you help lead in this issue or will you be among those blocking or stepping aside? if san francisco does not step up to lead to make the choice to actually block, who else will step up to lead?

if you have a better plan for restoring the watershed, now is the time to put it on the table. otherwise it is time for you to put up or shut up, to put it so bluntly. i hope you step up to the test. >> vice president courtney: thank you for your comments. i have no other speaker cards. is there any other public comment. public comment is now closed. madam secretary cap next item please. >> vice president courtney: commissioners? hearing it no comments from commissioners, is there any public comment on item number 5? communication? hearing no public comment on item five, public comment is now closed. next item, please. >> item six is other commission business. >> vice president courtney: colleagues? >> i do have an item. i'm curious about the delta project on the proposal that

they will be putting forth in response to the state water board's recommendation and when we will be having an open hearing on that and what the timeline is to respond. >> we have an item in closed session. >> today? >> yeah. so we can talk then. where is the -- there he is. >> will we be deciding then if we have an open session or not? i think it is important enough. >> we don't know if we want to comment because they haven't really changed anything. we can talk more about it. >> ok. >> vice president courtney: colleagues, anything else on other commission business? hearing nine, we will move onto the next item. would you please read the next item? >> item seven is employee retirement recognition. the commission will recognize

the following employees for the distinguished years of service to the s.f. p.c. paul martini from wastewater enterprise for 31 and a half years of service, christopher molina, wastewater enterprise for 35 and a half years of service and yolanda for business services for 30 years of service. >> vice president courtney: i would like to call all three up at the same time. he gives me a great honour to ask folks who have been with the agency for over 13 years. and so, at first i will start with paul martini. he served with the agency for over 31 and a half years. first was most recently as a heavy equipment operator supervisor for wastewater. and you -- he actually was responsible for repairing equipment and coordinating with shops, and then you began your

career as a truck driver, right? and that was 31 and a half years ago, rate? >> yes. and then he was promoted over the years, and i think one of the things that your coworkers really, you know, resonate with them is that you have professionalism and your dedication, and your diligence in working with the organization, and i just wanted to personally thank you for your service and if you want to say a few words, please do so. >> it was a great place to work. i had a wonderful time. i worked with the airport commission and the p.u.c. it was wonderful. thank you to you all. [applause] >> vice president courtney: don't go too far because we want to give you your certificate

with everyone else. so the next person is christopher molina. stepped on up. so christopher, actually, we have a correction. i was just told that you don't have 30 and a half years, you have 35 and a half years. is that correct? >> thirty-five years, seven months. >> who is counting, right? so your recent job as a superintendent of the mechanical maintenance and wastewater. >> yes. >> and in your career, you started as a 9916. while. that's impressive. and you worked through the stationary engineer apprentice program. that is a program that we started in the southeast. it's a great testimony to see your progress since starting 35 years ago. and then, also, with your coworkers -- what your current

workers has said about you is you have integrity, your profession -- professionalism, and your generosity. that is something that resonated with them. i just wanted to personally thank you for your time served and if you want to say a few words. >> actually, it was a great place to work. i was actually born and raised in the bayview eric my first six years of my life were right across the street on gerald's. as kids, we would play there in front of the plant not knowing what that was. riding our bikes and stuff. who knew that i would come in as a 9916 and worked my way up. great place to work and great people to work for. great company. thank you very much. i really appreciated it. thank you very much. [applause] >> in the last person is yolanda. she served for over 30 years.

i can't believe it. [laughter] >> all right. she is recently a senior budget analyst. she began as an analyst in the budget unit and was steadily promoted into a managerial position. she is a legacy in this business service and finance for her exemplary work ethic. one thing i can say is she never turns down a job. she works hard. she works long hours. and i sometimes see her outside meditating. [laughter] recharging herself. but, you know, she brings great value to the organization. i want to personally thank her for all her efforts. i have been working very closely with her on finance stuff and we are going to really miss you. if you want to say a few words? >> thank you. hello everybody. i was born and raised in san

francisco. i started my work career working with nonprofit community groups in the city. i was very fortunate to have continued my work career at the p.u.c. and i am very proud that i was able to continue servicing the people of the city that i love. and most of all, i was also very lucky to have worked with such great people. thank you everybody. [applause] >> if i can have everyone come up here to take pictures.

>> i'm not thin, but i'm going to try. [laughter] >> retirement. >> happy retirement! [laughter] >> thank you very much.

>> thank you. >> before we move onto the next item, we will have public comments. i thought it was interesting to note, that with respect to all three long serving, long tenured committed employees, all three of them talked about everybody else. they really did. they talked about everybody else that they worked with. i am always a little taken by that. awesome. on the item, is there any public comment? friends, family? any public comment? commissioners? >> i will add just one thing, what it is like to get older. one of the things that is nice about getting older is i

remember a special one. yolanda was hired to. [laughter] that was 30 years ago. it is nice to see it come full circle. i recommend retirement. [laughter] it is very nice. >> thank you to the general manager for making sure we are always recognizing the employees here. is there any public comment on the item? hearing on, public comment is now closed. madam secretary, next item, please. >> it is a report of the general manager. >> president kwon: for the first item is clean power s.f. and we have michael hines. >> good afternoon commissioners. i am michael hines, director of clean power s.f. for the power enterprise. for this cc update -- c.c.a. update today, i will do the usual cover enrolment activities, service status to customers and provide an update on regulatory activities. with respect to enrolment in

service to the customers, we have been reporting to you for quite a few months. through the end of june, clean power s.f. was serving around 81,000 active accounts. with a cumulative opt out rate of 3.2 cents mark, or 96-point 8% retention rate. our super green upgrade to rate has stayed steady at four% of the enrolled accounts. that means about 3400 businesses and residents in san francisco have elected to receive 100% renewable energy from clean power s.f. beginning this month, we will start serving an additional 27,000 commercial and residential customers, in fact a a good number of these accounts have already started cutting over to clean power s.f. service in early july on the regular metre read date. all is going smoothly so far.

as part of the enrolment process, we have completed mailing of two of our four enrolment notices. the third notification will go out this month, on the fourth notification will go out next month. completing that requirement for programming during enrolment. our opt out rate for this enrolment group is currently about one cent-mac of enrolled accounts. those are customers who have seen the notice and responded to it. i also wanted to share with you that the annual clean power s.f. rate mailer was sent to all customers that had been enrolled with clean power s.f. as of ju july. the recipients of that mailer include the 27,000 accounts being enrolled this month. making that about hundred 15,000 total accounts in san francisco that will see this mailer.

the mailer chose those customers that participation -- shows a customer is a partition patient -- participation can save them to% on the generation supply cost by taking service through the green supply products. this is the third annual joint mailer that we have prepared. again, it is done in collaboration with them and required by state law and overseen by the cpuc. we will provide copies of the joint mailer notices to you as a communication item at the next commission meeting. finally, on the regulatory front, chair courtney announced at the beginning of the meeting item 12. it is being continue to the next meeting on the 24th. i want to let you know that item will seek your approval of an integrated resource plan compliance filing authorizing the general public to submit the required report report to the california public utilities commission by august 1st. some documents were provided to

you in the commission agenda packet for this meeting, but a background document was not. we are finalizing that documents. so, hence, the continuation. if you have any questions about this item in advance of the meeting, please let me know. and that concludes my update. >> i have a question. the opt out mailers that go out character the they provide the opportunity or the option to enrolled? >> absolutely. >> they do? ok, great. i had someone come up to me and they weren't hearing about super green and they didn't know how to get the word out there and more people would end role if they do. >> yeah, i can announce we are getting sign-ups every week. i believe we had 30 additional sign-ups the past week. it is a steady march. it may not be thousands, but it is consistent.

we are doing quite a bit of outreach right now around, you know, powers of work including the entire staff. it is catching a lot of people process attention. same with the new website. we are optimistic and we are getting some eyes and what we are doing. but of course, we will hit the streets and try to keep the message out. >> we are also working on some large commercial customers as well. >> yes. we are hoping we will have announcements soon about some commercial customers that we are enrolling into super green. stay tuned. [laughter] >> thank you. >> president kwon: -- >> vice president courtney: colleagues? thank you very much. is there any public comment on the general manager's report? >> chair courtney. i am here for the record. to go -- it is -- it is a good

report. i am seeing progress here. 27,000 new accounts. that is very encouraging. i like these reports and details are important. thank you for that today. because we have to converse about this and get people interested. i think it is important to continue the conversation of where we will be going after we get these 27,000 accounts hooked up. from what i've read, there are 300,000 accounts in the city of san francisco who are waiting and hungry to do this. and so, it's important for us in our reports to also bring up issues of what our impediments are to our s.f. employees being

able to get out there and work on the rest of these 300,000 accounts who are ready to sell clean power s.f. to the city. so we should not be holding back on this. but to continue the work. this is a good report. i hope next time i will hear some more. thank you. >> vice president courtney: thank you. any other public comment on this particular item on the report? seeing none, public comment is closed. >> the last item, i wanted to give an opportunity to introduce you guys to a man who is our new atm of wastewater. he officially started last week. you can imagine that she is around meeting folks and getting familiar with our operations. he has over 20 years of experience in the private sector and infant -- engineering and public utility management, since -- sends. [laughter]

since 2013, he has been the general manager of rossa valley sanitation district. and so he is a licensed engine engineer. i just wanted to, you know, welcome him, you know. as folks are leaving, we are bringing some folks and. i just wanted to welcome the board and i wanted to give a special thanks to brian for stepping in and really keeping the place together and running well. i just wanted to say thank you for that. >> welcome aboard and thank you brian. >> you realize of course, you have to stay for 30 years. [laughter] >> that concludes my report. >> is there any public comment on the general manager's report? colleagues? hearing it none, next item, please. >> item nine is a consent

calendar. all matters listed here under constituted consent calendar are considered to be retained by the public utilities commission and will be acted upon by a single vote of the commission. there will be no separate discussion of these items unless a member of the commission or public requests it. it will be considered a separate item if this happens. >> vice president courtney: any interest in removal, colleagues? members of the public? it has been moved. and a seconded. is there any discussion? as any public comment on item number 9? i will call for a vote in public comment is closed. the motion is carried. next item, please. >> item ten is authorized the issuance of up to $675 million of the 2018 series wastewater revenue bonds through two separate bond sales in the 2018 bonds consisting of one subset -- one subseries of bonds.

>> i will have the presentation as part of your packet. >> ok. vice president courtney and commissioners, i am the a.g.m. of the s.f. p.u.c. the item before you is the approval of the authorization of up to $675 million of wastewater revenue bonds. may we have the slides, please.

slides, please. ok. thank you. here we go. in the presentation about this authorization of debt, i wanted to talk about three particular things. one is the review of the 2018 capital financing plan that we put before you in september. we will talk about the strategies we have been pursuing for the financing of the capital plan for the wastewater enterprise. and that we will get into the detail on this particular instruments of revenue bonds. here we have a presentation, a chart we put before you in

september of last year which was our capital financing plan for all of the enterprises and it was particularly ambitious. we have been executing accordingly. you authorize the issuance of new money water revenue bonds in november this year. you authorize the issuance of revenue refunding bonds which we priced in closed late last year. authorized the execution of a bank credit facility to support the growth of clean power s.f. earlier in the consent agenda, he approved the extension of the credit facility for the wastewater funding program. before you now is the approval of revenue bonds at the meeting next week. staff will be before you and asking for the approval of execution for the wastewater enterprise. so, i wanted to spent a few seconds talking about the capital financing strategy of

the wastewater enterprise. as you know,, we have a large capital plan and the water enterprise, which exerts upward pressure on rates and charges. he had seen in the tenure capital plan, that they are projecting significant increases associated with the rest of the wastewater capital plan. so, in the last three years, as staff has been working on the scopes on the schedule and the cost of the capital plan on the finance side, we have been looking at strategies to bring the financing costs down. that includes consideration of the prudent use of alternatives to long-term fixed rate debt. that is before you as subseries c. as the debts being proposed. we aggressively pursued low-cost alternatives to revenue bonds including state revolving bonds. we refinanced outstanding debt when cost-effective which we

prove every year. we have been active in a leader of the department of the market for green bond. over time, it will yield more attractive financing costs than standard revenue bonds. in terms of alternatives to long-term fixed rate debt, we are talking about instruments that are used by arch capital investment oriented agencies. board utilities, airports, seaports, really to lower the cost of overall debt. what it means is you are getting some area exposure at the shorter end of the yield curve and you have lower interest cost. you take some risk over time that interest rates could rise. overall, variable rates are getting exposure at the short end of the yield curve. gives a prudent approach in a diversified portfolio. some of the instruments that agencies you use our variable rate debt. it is long-term debt by the interest rate resets on a daily

or weekly basis. it is a very common instruments. and then there is also something that doesn't provide so much variable interest rate risk exposure. it is called a put bond. it is a long term dated debt. you price it in an interest rate term is anywhere from 5-7 years. if you get the short end of the yield curve we don't have the daily or weekly risk of interest rates moving. you do have the risk of marketing the bond at maturity. so, some of the things that people pursue in order to mitigate the risks associated with variable-rate or short-term debt are, you know, having a security policy framework. the commission has a debt policy which limits the variable rates at 25% of the outstanding debt portfolio. you have interest earnings on cash balances which are natural hedges against weekly or daily variable rates.

if your interest rate goes up on the debt side, your interest earnings go up on the cash balances which represents a natural hedge against interest rate risk. and then the commission has fund balance policies which keep reserves around to manage any risk they might experience. and then there are budgeting strategies where you basically project a more conservative interest rate then you expect to receive. thereby managing risk -- risk on interest rates. so i talked about the alternatives to long-term fixed rate debt and now i will talk about all the work that the staff has been actively pursui pursuing. low interest cost instruments. subsidized lending instruments. we brought before you, and you have executed four loans with the state revolving fund totaling just over $100 million. this is to finance a number of

specific projects related to the wastewater enterprise. that 30 year debt, that interest rate is between 1.6 and one point 8%. it is extremely cost-effective. the state recently adopted the fiscal year 19 intended use plan. that is what the state revolving fund intends to finance. an two of our projects are around that iup. we expect to close these in november. so we received $132 million loan for the bio solid project. we will be executing that. it includes 4 million of principal forgiveness. and $39 million for the oceanside plant utilization project. it also includes a 4 million-dollar grant. for the next meeting, it will be the approval of an allowance.

so in july 2017, we were selected by the u.s. c.d.a. as one of 12 loans for the inaugural funding. we were the largest loan selected. it was originally $625 million which was 49% of biosolids digester project. we will be working diligently to negotiate a loan agreement to bring before you which will be before you on the 24th. that is for $699 million. a very significant share of the biosolids project. the interest rate is three%. it has a very long and flexible repayment terms. we plan to fund this on an interim basis the issue of bond anticipation notes. will provide more detail on the loan next month. i wanted to give you a slaver of all of what we are doing to manage interest costs on capital financing for the wastewater

enterprise. now i will talk about the transaction before you. it is the series 2018 wastewater revenue bonds. we are issuing these bonds in three series. a and b. will be senior living and long-term fixed rate bonds which you have seen us issue before. series c. will be variable-rate put bond. is one of those instruments i talked about a little earlier. the total amount of the issuance is not to exceed $675 million to fund these projects over the next 12-18 months. series c. is a 30 year long term fixed rate bonds with a put each year. investors, after we are looking at a five year initial put. , put the bonds back and we remarket them at as another put bond or we can take them out of long-term financing. the requirement for marketing

risk, but we have a very good credit with significant market access. the advantage of this is that you save about $13.5 million in interest cost over the five-year period. for the plan of finance, it is to sell the bonds separately. there is going to be -- under the same disclosure document. then we will have simultaneous closing. as you know, most of our sales are conducted on a competitive basis. these particular series we are proposing to sell under endnote negotiated basis. but the underwriters were selected with the competitive bidding process. and the reason we are proposing and negotiating under rising as the series c. needs to be sold

as a negotiated underwriting and we have a number of changes in the underlying adventure related to authorizing the loan, as well as modernizing it for variable-rate products. so the credit story is a little more complex. we think we can more effectively execute that using a negotiated underwriting. so, there are a number of indenture amendments that are part of this approval. i outlined them on slide 11. major amendments have to do with allowing providing for the issuance of the loan. currently, that needs to be structured as a bond when these indenture amendments are made and when the amendments actually spring based on the amount of outstanding debt. the loan will be in the form of a loan, not a bond which has

advantageous -- advantageous treatment for the poc. slide 12 identifies the sources and uses of funds for each series. you can see the amount of the bonds being issued and the total proceeds generated in the project fund deposit capitalized during construction and the costs of issuance. it was enacted in october 2017. it requires communication and disclosure with the governing body of debt related findings and information. at the time they authorized the issuance. so, the information we have provided for you in the staff report meets these requirements. i highlighted the information here in the presentation. the true interest -- interest of the three different series of bonds will be about 3.4%.

finance charges for the bonds is about $2.5 million. the amount of proceeds we will be receiving net of the capitalized interest is about $681 million. i'm sorry, the total payment amount of capitalized interest is $1.1 billion. that is the repayment of the interest and principal and interest over the 30 year life of these bonds. we have been providing this information to you and we will provide it about all future debt issuances. the form of transaction documents before you, or the preliminary official statement of all three series, that is a disclosure document that is important for the commission to understand how staff has developed and reviewed that. the supplemental indenture's are the agreements between us and the bond holders about covenants and commitments. the bond purchase contract is the agreement between the p.o.c. and the underwriters for the sale negotiated and there is a

continuing disclosure certificate which outlines our obligations to disclose information on a continuous basis to bondholders. we provided some disclosure training to the commission. and a number of -- for the last several years, these are the questions and answers that, as commissioners, you should be thinking about in terms of disclosure. understands the purpose of the issuance, the structure of the bonds, the fact that we are issuing variable-rate debt in series c. a modest amount. the repayment is from wastewater revenues, which is in accordance with the wastewater indenture. the organization currently has about $937 million outstanding in debt. not including the bonds we are

talking about authorizing. the debt associated with these issuance results and about $87.79 cents per month increase in the sewer charges. these have all been incorporated in the rates and charges that you adopted in april as well as the ten year financial plan you adopted in february. we don't anticipate any negative impact on the credit ratings of the wastewater enterprise for these bonds. and then i conclude with the transaction schedule. we are before you today seeking approval for the issuance. we would be praising the week of july 16th. we would be coming to the commission for the approval of the loan july 24th. we would close the loan on july 27th and then close the bonds

the week of august sixth. so the recommended action is to authorize the issuance of the 2018 abc revenue bonds and approve the form of the related bond documents and authorize a general manager just out the bonds and delegate to the general manager to award to the bonds. i am happy to answer any questions. >> vice president courtney: sounds pretty simple to me. >> i have a question. back on slide 16, the question is, how will bonds impact rates? could you comment about the sea bonds, in case it has to be marketed identically. what that changed the rates? we would have to go into a higher interest rate?

>> so, if the series c. had a five-year put, and -- when we actually do our financial planning, we assume at a five% interest rate on all of the debt to be issued in the future. we have made conservative assumptions on the ten year financial plan in the rate model. >> you are assuming a five%? >> yes. >> that would be incorporated already? on another side door slide you mentioned it is a four%. >> that is the estimate of the financing clause, assuming current long-term rates. [please standby]

>> and the second category is a

bit different. it's adding grant requirements for brewery process water treatment systems seeking grant assistance, so we've been approached by some brewers saying gee, you know, can i get help doing a recycled water project using my waste water, not the standard waste water, but the brewery water, the processed water. and so we would like to open up that possibility, as well, so those two things we're adding to the basic program for the possible grants. >> i'd like to move the item. >> second. >> second. is there any discussion? is there any public comment on the item? hearing none, public comment is closed. i'll call the vote. all those in favor of the motion, say aye? all opposed? the item passes. next item, please. [agenda item read]

>> good afternoon, miss howe. >> good afternoon, commissioners, a.g.m. for infrastructure. kathy howe. this contract was bid twice between september 2017 and december 2017. the commission awarded the contract on february 13 of this year. prior to notice to proceed, we had the march 22 storm event, and the storm event prevented timely inspection of the valves upstream of the penstocks. these need to be in working order. if the valves need repair, the repairs would have been made prior to the summer of 2019, which is the contract is scheduled for the shutdown. the next opportunity to inspect the valves is in march 2019, and it does not allow adequate

time to assess the conditions of the valves and make the necessary repairs prior to the scheduled contract work. additionally, as a result of the storm event, operational reliability requires a change in the shutdown schedule from a summer shutdown to a fall-winter shutdown. these changes to the contract schedule materially change the contract, and it is in the best interest of the city to rebid the contract. the rebid of the contract would include the repair of the valves, as well. >> a question. could you say why we're rebidding it. i mean, i yo why we're not doing it -- doing the project, but why do we have to rebid it? >> we have to rebid it because we can't hold the contractor to that price. it would be well over a year. >> is there any demobilization costs. >> there may be some costs that

we're working out with the contractor right now because he didn't actually mobilize, but he did start purchase of equipment, and we didn't -- we don't know if he cancelled it in time. >> okay. thank you. >> i'll move the item. >> it's been moved. >> second. >> second. >> and seconded. is there any further discussion? hearing none, is there any public comment on the item? public comment is now closed. i'll now call for a vote. all those in favor i any identify by saying aye. all those opposed? the ayes carrie. madam clerk, call the next item, please. [agenda item read] >> this item is before you because we had only one bidder. we've had a similar contract before, and we had the same

bidder. it is below the contractor's bid, but we want to do outreach. this is more of inspection and cleaning, and it's to assist the waste water enterprise. >> and you have no issues with this contract? >> no. >> does pipe and plant do all of our inspecting? >> they do a lot of our inspection, but our own waste water enterprise also does inspection, as well. >> move the item. >> it's been moved. >> second. >> and seconded. commissioners, any further discussion? hearing none, is there any public comment on the item? public comment is now closed i'll call for a vote. all those in favor signify by saying aye. all those opposed? the ayes have it. madam clerk, the next item, please. [agenda item read]