we know are a number of inequitable things that exist in san francisco that we need to address. i want to take this opportunity to acknowledge cheryl davis. director of human rights commission, who has already started work and research on how we can make sure that even be in the city and county of san francisco within our various departments that ther there is equitable access to job opportunities in our city. we know there is work to be done. today we celebrate an amazing accomplishment, thanks to so many incredible people who believe in the work we are doing and because of this work we are going to positively impact thousands in san francisco and hopefully change their lives and our city for the better. thank you all so much for being here today.

[applause.] ♪ ♪ >> good afternoon. call to order the regular meeting of the san francisco public utilities commission. tuesday, april 23, 2019. roll call, please. we have a quorum.

>> president caen: commissioners, before you you have the meeting, the minutes of march 26. are there any corrections or additions? >> no, i would like to move the item. >> second. >> president caen: any public comment? all those in favor? opposed? the motion carries. next item, please. >> clerk: item 4, general public comment. members of the public may address the commission on matters in the commission's jurisdiction and not on today's agenda. >> president caen: i do have a speaker card from mr. rosecrans. welcome. >> thank you, chair caen and commissioners, and nice to see with mr. carlin in the chair on the horseshoe. some of you may have seen the

article in the chronicle how hard it was to have a unique experience in yosemite, and 4, 5 million people a year go there, and most go to the yosemite valley and very few go to hetch hetchy, and the rain reason -- well, a reservoir there. but there's more. it's not just as a reservoir there. the gate is locked every day. there's no camping, there are few trails. so it's kind of hard to go there and get that yosemite experience. even though as many people say it's very beautiful still with the reservoir. it's not what you guys said in 1912, and maybe you don't think you bear the responsibility for what happened in 1912 but you

promised congress in 1912 and 1913 that it was utter absurdity there be any claim that tourists or campers would be excluded or the pleasure to be found would be lessened. you said there would be greater opportunity for tourists with the reservoir in place. so, i'm wondering if that's a commitment that the commission still believes in. or whether a deal cut decades ago with steven mather would get you out of it or how you feel. and i know you don't typically respond, so -- we'll have to get back to you guys on that one. thank you. >> president caen: thank you. are there any other comments? seeing none, next item, please. >> communications.

item 5. >> president caen: commissioners, any comments? i have a question on the streetlight program. so, i know that, i don't know this for sure but i think that pg&e also will be changing over their lights to l.e.d. >> that's correct, commissioner. >> and do we know the timing on that? >> they have begun, and we get reports from them on how they are progressing. i would be -- i do believe i include some information about that in the report itself. but i would be happy to provide more to you if you are interested. >> right, no, that was a very thorough report. i appreciated it. >> thank you. >> now, we have all the wires, the power for the lights, correct? >> so, we have the wires for our

lights where they connect to the pg&e system. so, pg&e has a responsibility for distribution of the electricity up to a box in the sidewalk. and then from that box we distribute it to the lights that we own and operate. >> so, who is -- who has jurisdiction over the wires either above the street or buried in the street? >> generally speaking, pg&e does. certainly for wires that are above the street and not just serving streetlights. so to clarify that point, there are a couple construction areas where what was underground streetlight distribution wires have been put above ground temporarily while construction is underway. and in those situations, typically we own, we own those

wires. >> ok. i have been getting some comments from people that wonder why their wires aren't buried like others. >> uh-huh. uh-huh. >> so that would be under the jurisdiction of pg&e? >> yes, and san francisco has an undergrounding program, that's a companion to the state's undergrounding program, where in the utilities like pg&e, collect funds from rate payers, and allocate those funds out for undergrounding. most of -- much of san francisco, not all, but much of san francisco was undergrounded back in the 1990s, and that's when san francisco's allocation of those funds was spent. in the 1990s and early 2000s.

>> so back at the bottom of the line. other cities are using allocations now ahead of us. >> i see. ok. and because in many areas, most of the area undergrounded and then a block or two is above ground, and many of those circumstances there was some reason why just that block wasn't undergrounded at that time. typically that's because when undergrounding occurs, the residents and businesses, the property owners also have to make an investment in undergrounding their, the drop that comes to their home. so that additional expenditure is not always in the budget of households and businesses, and so that area would be passed over during the undergrounding. you'll see little spots like that throughout san francisco

where it's otherwise undergrounded. >> very clear, thank you. >> you are welcome. >> president caen: public comments. on the communications. next item, please. >> item 6, other commission business, recognition of gerard murphy, on 36 and a half years of the distinguished service to san francisco public utilities commission. >> jerry, come on down. [applause] >> so, you don't get to speak yet, jerry. kind of personal. jerry and i grew up together in the same neighborhood. he's a little younger than me, i don't understand why he's retiring just yet, but -- he came to wastewater in 1982, i

was working in the lab, he was, he's the laborer, worked up to being a chief and seeing the things such as health and safety for the wastewater enterprise. i was surprised when i was told he was retiring, oh, yeah, we went to the same elementary, st. james, and had our knuckles wrapped by the sisters, and happy for you and for wendy, and wish you the best of luck in your retirement and i'm sorry to see you go. >> thank you very much. i don't know what i get to say here, but -- i did have a little speech. i did start in 1982 as an as needed laborer, made it to maintenance superintendent, which was quite a feat for me, i appreciate the opportunity that the city has given me, the opportunity to be in front of

you guys today. i do get emotional on things. i take -- i take the job really seriously, being a city guy, a native san franciscan and i wanted to make civil service proud and i think the city was good to me, hopefully i've been good to the city. i want to thank my entourage. thank you very much, i won't take your time. you have busy work. thank you. [applause]>> i want to also on behalf of the commission express our appreciation for your years of service. such an honor and gratifying to see who made his way through the city, p.u.c. and provided us with so many great years. thank you very much.

>> oh, jerry. >> thank you. >> congratulations. congratulations. [applause] >> there's a very good example of how to be very happy after 37 years.

any comments? congratulations again. is there any other commission business? ok. where are we here? next item, please. >> item 7, annual revenue bond oversight committee report and audit findings. >> mr. george. >> good afternoon, thank you for having me. travis george, the chair of the revenue bond oversight committee. as a reminder for people in the room, created in 2003 to provide transparency and accountability in the expenditure of revenue bond funds. i'm here to summarize quickly for you our annual report.

so i'll just talk about briefly what we did and the work we did in 2018 and what we intend for 2019. much of the work that we did in 2018 is continuation of work we, i think, typically do as a committee. we monitor the outcome of bond sales and get presentations from various staff on additional debt plans and things related to that. we also review the progress of major capital projects in the water system improvement program and the sewer system improvement program, as well as some capital projects outside those. and those just sort of continue through in each year. this year, or last year i guess we also worked with the city to extend the sunset date of the committee from last year to 2025, so we'll be able to

continue our work for a few more years. we also created a new fund balance management policy, which prior to that, nothing existed for the committee. that will help us, help guide the current committee and you know, any future committee members that join in the next few years in terms of how to use the funds that are i'm sure you know or funded through a very, very tiny little percentage of each bond series, the proceeds received from each bond series. so, when that money comes to us we have to figure out how to use it and historically committees have done a good job using it, but with a lot of turnover we wanted to really kind of focus our efforts and make sure that us and future members knew, or had a little bit of a guide to use for how to use, how to spend that money wisely.

and in particular, i think that policy will be helpful in terms of how we use the money to perform a future audit. it's something we have done in the past and we plan to do in the future. in fact, the last thing i would say we did in 2018 was really strategize with the sfpuc and the city staff to figure out an approach for undertaking a new audit process. and so for 2019, that's really the major thing that we are going to be working on. we are currently in the process of putting out an rfq to decide which third party contractor we'll select to actually do the audits. these will be expenditure audits of various bond series and i think that's really important for us to do.

it's sort of right at the core of the reason for existing. so, we are looking forward to that. that work will span 2019, going into 2020, and perhaps even 2021, depending on how many bond series we look at. so -- that's it. if you have any questions, i'm happy to answer. >> just a comment, which folks have heard me make several times but i think it's worth repeating and that is that the people of san francisco have given us a whole lot of money and they do that on the basis of trust and maintaining that trust is probably the most important single thing that we can do. and we have a couple tools to help us do that. we have i think probably a more robust audit program in general of my publications. we have committees such as yours

that are taking a particular look at how we do business and making sure that that's done correctly and i think that's incredibly important to maintain that trust as we go forward. so, thank you for your work, and you know, where you need to figure out better ways of doing it, god speed. i think it's an incredibly important effort. thank you. >> president caen: thank you very much. and as i read, we have had very good reviews, so i'm happy to see that. any public comments? next item, please. >> clerk: item 8, report of the general manager. >> sorry, the first part of the report is cleanpowersf update, barbara hale.

>> good afternoon, assistant general manager for power. three items to update you on today. usual enrollment and service status update, some information about our new customer programs that we have been working on, and i'll also update you on the pg&e rates. we have been talking about getting that information to you as soon as we got it, and we got it late last week so i have information on that. so, on the enrollment and service to our customers, we are continuing to the current enrollment effort and seems to be moving along successfully. as we reported at our last meeting on april 1st, customer accounts began transferring over to the cleanpowersf program on the regular meter read date. three-quarters of the way through that process, which will continue through the end of this month. by the end of april, cleanpowersf will have enrolled more than 400,000 customers. and that's just customer accounts, i should say. so more people than that. throughout the city and county of san francisco. our program opt-out rate is

about 2.8% since the program launched. that's up a 10th of a percent since the last report. so, we continue to have a 97% retention rate. cleanpowersf super green upgrade rate is 1.4% with about 5,300 accounts electing to receive 100% renewable power. so now on to the programs. in addition to managing this large customer enrollment i just talked about, power staff have been working on addressing gaps in customer programs. the first of those you will hear about later in this meeting under item 15. it's on the regular agenda and in that item we request approval for a new multi-year customer regular form agreement for super green customers. that agreement would allow customers to receive lead certification points for a multi-year commitment to the super green service. julia almond from our

cleanpowersf staff will be here to answer questions you may have when the item is called. and share with you cleanpowersf is going to be launching a peak day pricing program next month. pg&e offers a peak day pricing program and this program would be a pilot for cleanpowersf that responds to our customer, excuse me, our commercial customer interest to have a peak day pricing program. participating commercial customers, just commercial customers, receive a lower demand rate in exchange for paying a higher super peak period energy rate on certain days during the summer season. these days are called when the statewide demand is forecasted to be extreme. this encourages customers to lower their consumption during

the super peak period to relieve stress on the power grid. the super peak period is defined from 4 to 8:00 p.m., which coincides with when the statewide grid is experiencing its peak period and the highest wholesale energy costs. we are hoping to use this pilot to gauge customer interest and develop operating knowledge and analyze the benefits of the program to customers and to our operations. so as i said, that will launch this month. so now on to the pg&e rates. last week we received pg&e rate filing, it was made at the california p.u.c., and it includes their 2019 exit fee or pcia rates. pg&e planning to implement the rates on july 1st, pending approval at the p.u.c., they expect to receive in early june. at a high level, we are pretty

happy the proposed pg&e rate change would be much more favorable than we were projecting in december when we presented the program financials. pg&e is proposing to change the exit fee by the following amounts. for residential customers, it will decrease by 11.5%. small commercial customers, it would increase by 18.1%. but, we had projected back in december that it was going to increase by 33%. so, it's an increase but it's a much more manageable increase. similarly, medium commercial customer exit fees would increase by 22% rather than 39. and large commercial customers would increase by 33% rather than 49%. in addition, pg&e is requesting increases to its generation rate. so, that's on top of the

increases that it just implemented in march. the cumulative increase of pg&e's generation rates would be for residential customers and increase of 8%. for small commercial customers, an increase of 6%. for medium commercial customers, increase of 4.2%. and for large commercial customers, increase of 7.5%. so, increases across the board for pg&e generation rates. we are still doing detailed analysis of this, and how we want to respond to it with rate proposal for you, for our cleanpowersf rates and revenues and we'll present that more detailed update next month. happy to take any questions you may have.

i should also clarify these increases are distinct from the two increases you may have read about in the newspaper this week. so, there was an increase projected in a chronicle article where pg&e's requesting authority at the california p.u.c. would increase rates by about 25%. and that's distribution rates. and an increase was also reported in the news for pg&e associated with their request to modify their capital structure, their cost of capital and increase and a rate of return increase, which are also projected to increase pg&e customer rates. so, those are still lending -- still winding their way through the regulatory process. these increases that i just shared with you are going to be implemented expected july 1st.

>> i believe when you presented in december when the projected rate increases were you had a chart that showed the impact on monthly bills and whatnot. would you mind updating that and submitting that, it's hard to follow exactly what the implications are. that would be the end game what it means for the program. >> and what they actually pay. >> or both, impact by the sector would be. >> sounds good, happy to do that. >> what happens if they do get this increase of 25%. how does that -- >> so, it will affect distribution charges for all of the cleanpowersf customers. and any san francisco resident or business that is not a hetch

hetchy power customer affected by that increase. thank you. >> pg&e customers and cleanpowersf customers pay retail distribution rates. >> that would not change the relative cost of those two. >> correct. it doesn't affect the competitiveness of the cleanpowersf or attractiveness of the program to san franciscans. >> any public comment? >> i have no other items. >> item 9, bay area water supply and conservation agency update.

>> good afternoon, commissioners. could i have the slides, please? thank you for having me here today. i wanted to take my time today to speak about the water system and permit program. it came to my notice as i was thinking through this last year that it was a year ago that you lasted out the changes on the program and it's been an interesting year but we have had some great successes as you heard from mr. weight, 97% complete which i think is an amazing feat and accomplishment and not to be dismissed lightly. but, there are two critically important remaining projects. ones that we have all known were

going to be important. the alameda creek recapture program and the regional ground water recovery project. those two projects are critical to achieving the water supply level service goals. i don't think it's unexpected they are at the tail end. water supply projects that region regional partnerships and difficult discussions about what's going on with water supply. and we commented on those projects last april and i felt it was appropriate to kind of review what the comments were and see where we are at on both those projects. so far on the alameda creek recapture project, as a reminder, the goal of the project is to essentially recapture flows that you are required to release downstream of the dam for around the alameda creek reversion dam for future operations and recapture that and bring it back to the water supply delivery system, roughly 7,000 acre feet of water

per year is the estimated yield. it has been essentially in recirculated draft e.i.r. preparation for this past year. i think we all knew that was going to happen with that process continues. and my reason to bring it up today is not to say that that's wrong, but also to say we need to remember that that's going on and it's always clear to me if we don't stay focussed on these kinds of things they don't move forward, we lose sight of the fact that they are important and this is important. at the time last year i made the comment that once that revised document is out, that the p.u.c. staff provide a written report to the commission on the need if any to revise the project scope and possible impacts. one of the things that's under discussion for the project and i think it's critical for us to discuss that once that document is available.

the other project is the regional ground water recovery project, critical to drought reliability. one of the few projects that is bringing on dry year supply, which we know we all need, especially as we start talking about the other threats that we have to our dry year reliability. last april there were changes proposed by your staff that you adopted and at the time we commented about a concern, what is the change on the impact to yield from those changes. and it was a change number of wells, kind of the project design, and the agreement was to come back to the commission at that time estimated to be in january, so this last january, with a detailed report saying what is the yields for this project, how does that relate to what we expected it to be, how does that impact our project level service. that information is not yet available and so you have not received that report. again, this review for me is to

make sure we all don't forget the importance of these water supply projects, which have been going on for quite some time. in discussing this with the p.u.c. staff ahead of time, there is a commitment, we are going to be meeting to discuss this project in particular and the status of that updated information because we know it's critical to the analysis, no doubt. but my hope is that, and my expectation is the p.u.c. would provide a written report to the commission following that meeting and providing you with an update where the project stand, given the importance of it to the water supply level service and the idea of the timeline what it is to meet the reliability goal. just to let you know, i've been talking about this for some time, senator hill, our local senator, actually has introduce d legislation to extend the

state oversight that was originally provided by the 1823, and so to extend state oversight until january 2022, a typo, it's january 2026, my apologies. >> 2022. >> it should extend from 22 to 26. yeah. oh, that's why. state law, i'm not reading my own bullet correctly. yes. so, the existing state law expires in january -- regional finance authority created at the same time had bonding authority to basically provide the opportunity for revenue bonds if it was needed, for these types of improvements and as a reminder, that's the authority that is made up of bosca and san francisco, so harlen kelly sits

on that authority. so, extend the oversight four years, to january 1, 2026, and extend the r.f.a. ability to issue bonds ten years, that expires shortly. harlen kelly has a support letter for that legislation. it does have its first policy hearing tomorrow. so i'll continue to keep mr. kelly updated and your staff updated on the process as it goes through. and then lastly, just to give you an update on the water use and this was through february, which really reflects how wet february was and based on some numbers we just saw today and i was just talking with mr. richie, march is going to be different because it has finally -- april has warmed up, seeing a little difference going on. for february water use was down

significantly and remained at 22% less than february 2013 data. so, again, i think an interesting pattern and one that we will be investigating as part of our demand study when that information comes out. so with that, i'll conclude my comments and answer any questions you might have. >> you know, i would love to see at some point a chart showing different city's use. >> i absolutely can do that. >> i think it would be interesting. >> and how it has changed over time, to see if there is certain cities that have made more of an effort or you know, their use has gone down or up or what that looks like. >> i don't know if that data is hard to find. >> i have data. so, we prepare that data on an annual basis every year, so we have just completed the most recent annual survey. this data is monthly data, so it gets a little complicated. now talking 12 months and 26 agencies, so it's a lot of data

to decipher. but i can certainly present the updated annual information. >> that would be great. absolutely. >> i have, yeah. and it is a very interesting story. i also have, actually, been out in the service area talking recently about not just total use, but also the trends and per capita use, very interesting as well. so, i will add that up. >> that would be great. thank you. >> i guess i would like to add my desire that after that meeting about yield from the ground water storage recovery project, that some form of that report come forward to this commission as well. >> thank you. >> i also would like to add, you really explain everything so well. it's very clear and we appreciate that. >> thank you very much, president caen, i appreciate that.

>> president caen: any public comments? next item, please. >> clerk: 10, consent calendar. all matters are considered to be routine by the san francisco public utilities commission only acted upon by a single vote of the commission. no separate discussion of the items unless a member of the commission or the public so requests, in which matter will be removed and considered as a separate item. >> president caen: read the items? summary. >> clerk: i just finished. >> commissioner moran: and i have nothing i would like to remove. i would move approval. >> vice president vietor: i'll second. >> president caen: anyone in the

public, any item to be removed? all those in favor? next item, please. >> clerk: 11, accept work performed by u.s. electric technologies for contract number ww-559r, decreasing the amount 46,945, and authorizing final payment to the contractor. >> this item is pretty self-explanatory. the work by our contractor, u.s. electric is complete and we would like to close out the project. >> i would like to move the item. >> commissioner moran: second. >> president caen: any public comments? all those in favor? opposed? motion carries. >> clerk: item 12. approve the plans and specifications and award contract number ww-686 amount not to exceed 9,205,823, and

duration of 400 consecutive calendar days. >> commissioner moran: move approval. >> vice president vietor: second. >> president caen: i noticed your hesitation. any public comment on this item? all those in favor? opposed? motion carries. >> clerk: 13, approve the terms and conditions of authorize general manager to seek approval by the board of supervisors to execute ten-year lease term extension for the san francisco public utility commission continued occupancy of space at 651 bryant street for rent of 577,920, with 3% annual rent increases thereafter. >> good afternoon, commissioners. real estate director. this item is also

self-explanatory. we are seeking to extend the power yard lease for ten years. normally we wouldn't bring an extension to the commission but i do want to point out the rent has increased appreciably and this is due to the industrial space and the tight real estate market in san francisco. so, the power enterprise paying approximately $577,000 a year starting in the first year of the lease extension. >> commissioner moran: approval. >> vice president vietor: second. >> president caen: any public comment? all those in favor? opposed? motion carries. >> clerk: item 14, approve the project delivery method of the design-build-operate new

treasure island wastewater plant and operation maintenance training and transfer of the treasure island collection system. >> could i have the slides, please? still on that, thanks, steve. >> good afternoon, commissioners. president, greg norby, assistant general manager for the wastewater enterprise, and i am here to go through a discussion with you today recording your consideration of advancing the proposal to deliver the future treasure island wastewater treatment plant facility and

collection systems through what is called the design-build-operate delivery method. and we are going to go through a brief presentation and myself, tom birmingham, the project manager for infrastructure, and some other folks that are involved in the process to answer any questions that you might have. so, we are going to cover what wastewater enterprises current responsibilities are out there, talk a little about the new development. go through the details of what that new facility is going to look like, and then focus primarily on the thinking that has gone into the recommendation for the delivery method itself. so the current situation out at treasure island, i don't know how much you've had exposure to the topic, i think you probably have a fair amount, the entirety of treasure island is getting ready to move into a 10 to 15-year massive redevelopment.

transforming it from its sort of past probably three-quarters of a century of use as a combination of military base and other facilities. right now sfpuc and the wastewater enterprise provides service out there under a contract to tida and the reason for that, the facilities out there today were built over many years by the united states navy. they are not owned by the p.u.c., and so we maintain and operate those facilities under this o and m contract. that typically gets renewed each year and i think the last renewal was just in front of the commission in the last couple of months, and that gets again renewed each year. so, some of the challenges we have out there right now is that this is a system that again is depending on what part you are looking at, from 50 to 75 years

old. it was not built and maintained to what you call p.u.c. utility standards. partly because of that, it has a relatively excessive amount of permit violations, and by permit violations, we mean overflows in the collection systems or improper water quality discharges from the old treatment plant. one of the challenges for the p.u.c. at the moment is that maintaining the treasure island facilities under this current contract requires the resources of about ten full-time employees from the wastewater enterprise, employees whose in essence day jobs maintaining and running some of the major facility on the city side of the system. and the backdrop to that in terms of additional challenges are that we have across our

system somewhere around 20,000 hours of unmet preventative maintenance needs on the systems we are struggling to take care of now, and that's for the main systems that serve the other roughly, you know, million residents of the city of san francisco. and in addition to that, we have about a 25% vacancy rate in the maintenance and staffing levels, that's the case now on and off for several years. that has a lot to do with industry trends and the current employment market. but the fact is, those are some of the constraints that we are currently operating under. and closely related to that is, as you just had the nice ceremony for jerry murphy, we have about 50% of the staff currently eligible for in a few years will be eligible for retirement. so, the point of these numbers is to give you a sense of what

the work load obligations are at treasure island, and how those compare to the resource base the wastewater enterprise has, and our priorities in terms of utilizing resources across all the other priorities and programs that the utility is responsible for. >> quick question? the conveyance from the feds to the city, did that not include conveying the wastewater system? why do we still have a contract-based relationship. >> the utilities were never built to our standard. they were built by the navy so conveyed to tida, never be conveyed to the p.u.c. so we cannot use our rate payers. >> we are a contractor out there to tida, and tida has the relationship with the u.s. navy and we are not accepting their infrastructure. >> and we never will. >> we never will. the permit is actually still

held by the u.s. navy. so we are literally just a contractor there. that's for all the utilities, water, wastewater and power. >> they could not issue the contract to somebody else, right? >> we have actually, the contract to operate on the island? i mean, tida could, but we have been out there since the island was turned over to the city for development. what we were expecting was a very short time frame before the developer would develop the island. it's now been 18 years, something around there. >> been a long time. >> been a long time. so, they are out there now, they are on yerba buena island, they are moving down into treasure island fairly soon, and we just, we see the long sort of like build-out, it's going to take some time. the treatment plant is key to the development of the island because the existing plant takes too many resources from us and too many resources from tida, so actually moving forward with the replacement of the treatment plant is in our best interest at

this point in time. >> i'm just wondering if it's soul-source contract or some issue down the road, i mean, who knows if relationships sour, that they have the option. >> right. >> to go out to bid. doesn't sound like that's in play. >> not at this time. >> ok. thank you. >> good segue. so, tom birmingham, the project manager for the new wastewater plant. i'll talk about the development going on out there, and the proposed new treatment plant. a bit of good news, so the development is a massive 10 to 15, maybe 20-year development. they are rebuilding essentially the entire island, aside from the job corps. all the utilities above and below ground are going to be replaced. that means every water pipe, wastewater pipe, power line will be replaced on the island with new infrastructure that will eventually be accepted by the

p.u.c. however, it is a long, very complicated project, you know. while this is all going on, you know, we have 1800 homes on the northern part of the island we have to maintain service to through tida. >> the development is for up to 8,000 new homes, which is 18 to 20,000 people, so it is a big development. includes 300 acres of open space. a new, three new hotels going on the island and y.b.i., rooms, up to 500 rooms going on the island. work started last year on y.b.i., building the new residential units and treasure island right now, they are doing the geo technical improvements and will start building homes next year, and looking to have 2100 new homes built in the next five years. continue going until 2035 to

2040. one challenge we are learning with developments is that it is market driven, so things could go quicker, things could go slower. so, we are being as flexible as possible. the new treatment plant is going to be located on the northeast corner of the island. in red you can see the area that we are looking at for the new plant. and in yellow is the existing plant. so, the new plant will be located in the red, in the future part of the agreement we have with tida, transfer of additional 4 to 6 acres. whether or not that is the existing plant or a parcel to the south or west is yet to be determined. right now we are going to wait until we see what our needs are going into the future. this is a very high level concept of what we are considering for our treatment plant. the gray infrastructure what you

see in the white and black boxes and the green and wetlands is what we are considering that will surround the plant. again, high level but this gives idea of what we are considering going forward for the plant. we have completed the a.r., we are in the conceptual report now. some of the conclusions we reached in the a.r. a plant of 1.3 mgd, it's a tiny plant compared to what you are used to hearing about in the southeast and ocean side, peak flow is 3.9. average recycled water is around half m.g.d., peak up to 1m.g.d. decided to go with the membrane bio reactor with the process, for bio solids at this point it does not make sense to do on island treatment for the bio solids, so going to reserves and space for the future.

but for now, haul to one of the existing plants until the development gets larger. right now there are not enough people producing enough solids to make it worthwhile. and as far as the wetlands, we are considering these wetlands a hydraulic retention wetland system so we can store water and then we'll discharge through an existing storm water pipe. provide a habitat for wildlife, provide a recreation area for people, for trails, but as far as the treatment goes, it's really providing a storage area for this water. all the water we'll be producing is title 22, disinfected, no contact restrictions. so if people are walking around the wetlands, you can touch the water without fear. it's not drinking water but you can touch it. we are also looking at this new plant requiring about 3 to 5 f.t.e.s to staff it.

as opposed to what greg mentioned earlier, over ten f.t.e.s right now. hand it back to greg. >> ok. so, in looking at the options the p.c. has for delivery of the new infrastructure out there, we thought it was important to start with what our long-term objectives are for what a successful outcome looks like out there at treasure island, and that's what you see here, pretty straightforward. we want to provide efficient reliable service for both wastewater treatment and water recycling to the new treasure island community. we want to do that in a way that with all the other activity that's going on out there over the next 10 to 15 years, allows us to meet all of our milestone commitments to the developer and the rest of again the key activity that's happening out there because the development will occur in large blocks over

the next decade to 15 years. very importantly to the earlier points, we want to do that in a way that leverages our limited staff capacity and our capital project delivery capacity. recognizing that we already have multi-billion dollar capital program underway. that's going to be going on for the next 5 to 10 years, and we are operating in a backdrop of a fairly severe staffing shortage. and lastly, we want to do it in a way that maximizes the transfer of risk as this project unfolds because it's occurring in the middle of a very complicated site with a lot of history going back 50 plus years as a military base. so, risk transfer is not the primary goal but it's a secondary benefit we think, or a secondary objective of the project delivery. so the range of options for the

delivery methods, the same ones you have seen before, standard, design build, etc., recently been starting some new delivery methods that are relatively new to the p.u.c., but becoming more and more common throughout the utility industry. so, d.b.o., design-build-operate. so essentially complete turnkey set of services. team that gets selected does what it sound like, do the design, secure the permits, they build, they operate that system to the requirements and the specifications, performance, regulatory and otherwise that are spelled out in that contract. so, that's essentially what makes up the d.b.o. and the reason in this case we went through a lot of internal discussions about the pros and cons of the different delivery methods. and looked at the objectives and what success looks like for that delivery over the next 5 to 10

years, and what the options are, the design-build-operate looked like the best choice to staff. the reasons summarizing here, single entity point of contact for the entirety of this process over the next decade. and that ensures cost efficiency and capital efficiency. we have guaranteed pricing through the d.b.o. contract, and we have performance-driven technical requirements that can be built into the contract as well. we minimize the risk associated with the p.u.c. in terms of all of the various regulatory compliance requirements that come with the new facility. and lastly, and again in my professional view, somewhere near the top in terms of considerations, allows us to concentrate our limited resources on the systems that are serving the, you know, million people of the city of san francisco as opposed to allocating those limited resources to a fairly small portion of our service area.

so, that is the recommendation, approve the delivery method, design-build-operate, authorize the general manager to seek approval by ordinance and the board of supervisors for the delivery method. now, this is very much just the beginning of the process. there are a number of very important conversations that need to take place with stakeholders that relate to this whole thing, and as you see here, the schedule that takes us through the latter part of this calendar year before we are issuing a request for proposals. based on what we know today, we are expecting from general interest, we think there's at least 4 to 5 qualified teams out there that would be responsive to an r.f.p. of this type, but that will, of course, remain to be seen should the process go forward. and lastly, the construction estimate for the plant is about

$130 million. i'll let tom and others comment. but when you look at the total value of the contract, somewhat higher than that. and so with that, we'll be happy to answer any questions. >> does tida have a role in approving, selecting the d.b.o. contract? >> they are a stakeholder, not going to have a role, but they do finance the existing collection systems out there. so what will happen, p.u.c. will pay for the operation and the maintenance of the new facility and any utility that's accepted, tida is responsible for funding o and m. it's going to get more difficult in the future, a mix of new and existing utilities on the island. >> right.

>> i have several questions. i have not paid a lot of attention to this in a while, and my suspicion is that other parts of the city may not have either. but it comes back to us and all those questions come up. first question has to do with the project fa sus at the moment. the environmental review was complete in 2011, is that right? >> for the development? >> yes. >> yes. >> and that included elements of wastewater treatment within that. >> correct. >> and in that they talked about us developing a master water system plan and a master recycled water plan. where are those in process? >> so, last week we finished the

ceqa review with city planning, note to file, so went to city planning, tida and the departmental staff, to questions, note to file. they found that the proposed project is very close to what was done in 2011, included in that ceqa. so they approved this project going forward as note to file. >> they reviewed what we are proposing. >> and i think i also read that one of the next steps, conceptual report. >> doing right now. >> will come up with a spec in essence for the project. >> bridging documents will then go into an r.f.p. if we g