to project out over time what kind of cost do we expect we would incur and revenue stream could we expect to see and expect revenue bond finance acquisition and pay for physical separation of the system we would be taking over from the system pg&e would retain. pay for the debt service. all the costs that come with this, could we afford it under that same revenue stream. >> commissioner: and a piece around the infrastructure and the condition it's in and safety and probably an additional track around the jobs fees. >> all the costs, could we afford them. that's the additional work we're engaged in. the continuing work. >> to follow-up on that, in the report, which i have not read,

the things the commissioner was asking in terms of workforce and the transferring of jobs assuming that happens as well as the viability of the infrastructure if it needs to be improved and what the costs is is substantial to evaluate and it's not been addressed yet. the workforce and viability. >> we don't know about the viability of the facilities we'd be purchasing it's difficult to get that from a desk top paper review. we can get a sense of the age of facilities and such but really it will take more work on that

to get a good solid number workforce we know what our workforce costs are we know what pg&e's cost and looking at a revenue stream we know compensate the workforce and want to make sure we're ready to make an offer who have the knowledge of the system and can help with improvements and knowledge of the improvement and customer base in san francisco they've been serving. >> >> commissioner: and i want to put a marker down when it comes to the benefits it would be a significant transition for folks in the pension fund that would be knocked out of their current accruals to come into the system and i hope that is part of the

total evaluation in who wants to work assuming this goes forward as opposed to staying with pg&e which is not just a for instance company. -- a san francisco company. >> it's not talked about a lot in our report but it's in the work plan for work. the other aspect with respect to workforce is the kinds of improvements we are talking about separation of the system improvements of the system to bring it up to good state of repair. all the city's workforce habits and requirements local hire and all that effort are capital improvement programs we envision would be part of any acquisition effort.

>> all these issues are manageable once we decide to do that? >> yes, it's manageable. i don't want to under state the complexity of this task. this is a heavy lift. this would be a big deal for san francisco. we're looking at our operational readiness and partnering with other city departments to look at the overall city's organizational capacity to take on the task. >> another consideration, how about if when san francisco and l.a. and others decide to go into this new business, what about the smaller municipalities, what would happen to them and may be stuck with pg&e and maybe paying more because the larger customers aren't there.

is there consideration to that or anybody else to consider that? >> we are including na in the scope of -- including that in the scope of our ongoing study and what is the affect on rate payers if it leaves the system. there's costs shared among the customers, if we take some of that away what will happen to those left and trying to understand the impact. we expect it will be an area of concern and interest for the california p.u.c. as they ray role in reviewing any acquisition like this and we'd be well prepared to address that. >> thank you. >> at some point understanding

internally what the impact would be and clean power s.f. wouldn't exist at a separate line of business but all be integrated. i think for the competition to have a clearer understanding of that to instill more kfrts in how we would manage and run it we have the benefit of performing the same businesses. not at the scale we would with this acquisition but we already have a customer billing and already have meter reading, transmission, distribution, outage response. we already do all those things. we have some capability so the issue is scaling it up and making sure the other city departments are scaling up with us. and yes the clean power s.f. staff would be absorbed and

integrated into this new public power utility. this local not for profit entity. >> commissioner: hetch hetchy too. >> yes. >> and this identifies issues that doesn't resolve them and the report acknowledges there's a tremendous amount of work that needs to be done and a serious offer let alone conclusion of the deal. i would like to see the work plan for addressing the issues and as part of the work plan i'd

like to see participation in the issues involved. and we need comment to be provided. and i would like to schedule an item on next calendar if we could to discuss that memo. it will help put the idea of the context of what it means within the context of bankruptcy.

we have considered this many times in the context of imminent domain municipalization. this is equally important to understand how that's different and what opportunities and challenges that may present for us. thank you. >> any other comments, commissioners? >> i'd like to highlight eight of the stuff we're doing so that we could be in a position to make an offer and so we may want to talk about reserving what we're doing. >> it's privilege and confidential and we can discuss

it in closed session. >> commissioner: that's what we need to figure out. >> that's what we cannot do and cannot be a case the program and analysis is done in secret and finished as a fully baked product. it cannot be that. we need to figure out how to stage our involvement so that is not what it turns out to be. >> any public comment and questions. >> that concludes my report. >> clerk: item 8 is the consent calendar all matter listed c

constitute consent calendar and will be acted on by a single vote of the commission. there'll be no separate discussion unless a member of the commission or public so requests in which it will be removed from calendar and considered a separate item. >> commissioner: commissioners, would you like to delete any item? and so the public, is there any item you'd like taken off the calendar? >> commissioner: may have a motion. >> i'd like to move the consent calendar. >> second. >> commissioner: all in favor? opposed? the motion carries. next item. >> clerk: applying to accept grant funds from the office of prevention and response in the amount of $35,000. >> i'll move the item. >> second.

>> commissioner: any public comment? any discussion? the motion carries. next item, please. >> clerk: item 10, approve the water supply assessment for the proposed 655 4th street project. >> there's similar projects. should we call them at the same time? >> commissioner: i'd agree with that. >> commissioner: very good. read the four items, please. >> clerk: item 11, approve the water supply assessment for proposed blocks of bluxome project and brannan street flower mart project and the a98 brannan street project. >> commissioner: thank you. >> commissioner: if you can address all of them together.

>> i'd be happy to do that. steve richie assistant general manage for water. the water supply assessments are for four development project in san francisco. what the commission's obligation is is to basically require us to prepare water supply assessment and available water supplies are sufficient to serve the demand generated by projects of the specified size. that's what these are do -- to do and based on water management plans and documents that need to be prepared every five years and the next plan is due in 2020. and what those are is an assessment of all the known developments of the projections regarding populations and jobs over the next 5 years. those are done every five years. they've had to be done since the

mid '90s because of concerns development projects were assuming water was available and it may not necessarily be true. the urban water management plans are routine base documents but for certain size you're required to an assessment including an assessment of what the demands are for that project and how they may be over time. because they're fairly large size, we also have to build in a little unless of how the non-potable ordinance for san francisco may apply and that's part of the demand and supply assessment. we have to provide their water from the water water from their own facility in san francisco. in this case, two are new and two are re-doing previously approved water supply assessments. the biggest change is inclusion

of analysis of three potential scenarios relating to the bay delta water control plan i referred back in the early item. and those three snrcenarios is e water control plan as adopted and the voluntary assessments, neither is implemented. either the result of litigation. nothing is implemented. the second scenario is the bay delta plan is not implemented but march 1 version of the voluntary agreement for the tuolumne river is implemented. that's the second scenario and the third is the bay delta plan is implement and the march 1 agreement is not implemented. all three are possible outcome in the future. staff has been work closely with the city attorney's office with us and the planning department to portray that uncertainty in

the water supply assessment. i won't go knee -- into details but there's drafts for how they're presented now. these projects do have available water supply that particularly under the third scenario there would be more rationing required in dry years than what is our current level of service which is 20% rationing is the maximum we'd like to achieve. we feel the impacts of the bay delta plan at the highest amount would be more than that so it's presented that way. the other two versions, there is adequate supply available without increasing the ration will level above the 20% level. it portrays all these. these documents are intended to be a pore trarl -- portrayal of the context of how we have you demands within our system. it's not intend tended to be decision -- intended to be a

decision document whether we like or not that's planning department. these are put into the ceqa process the planning department is embarking on. it also doesn't change in any way the policies that this commission has adopted in terms of what our priority are going forward and our priority going forward for water supply are continuing to mede our contractual obligations to wholesale customers and the supply built into the water supply agreement 184 million gallons a day and 81 million a day for san francisco and the next priority is we'll meet our environmental obligations and have flows at whatever level necessary to achieve the biological objectives. then we get to further priority. one question out there as can we

make san josé and santa clara permanent customers. that's an issue just dealt with pushing that down the road a little bit. it's a lower priority than meeting existing obligations and want to make sure that's clear. fulfilling demands of existing customers and san franciscan our number one priority. so all that said, these are documents between degrees of reliability under the different scenarios in the future. and this will then be used by the planning department for their assessment of whether or not to pursue or how the projects should be evaluated in the ceqa process. it's a long way of saying it's

somewhat complex at times and that's the fundamental conclusion we've reached and there'll be more over time. for the new commissioners we see one every couple of months over time. they keep coming. i'd be happy to answer any questions. >> commissioner: we have a comment. i'd like to hear from the public before we get into it. >> commissioner: okay. peter druckmyer. >> clerk: since the items were called together it will be a longer public comment period. >> i'm back making up for last time. i sent a letter about this yesterday and i'll leave copies here if you haven't seen it. i think it would be a mistake to approve water supply assessments

at this point and encourage you to direct staff to meet with conservation organizations and the san francisco planning department to see if we can address the issues we have with the process. the water assessments look at the bay delta plan standards to be implements. and it says the sfpuc could not meet the projected demands of the retail customers including the proposed project. existing customers in foreseeable future development without rationing at a level greater of a maximum of 20% system wide rationing beyond 2020. the sfpuc estimates 30% rationing across the retail service area.

the standards were adopted. and there would be water shortage. and it will lead to more demand for water because of the severe jobs housing imbalance.

i mentioned the survey we commissioned last year protection of the bay. protection of the tuolumne. and next is affordable housing 88% of affordable housing for san francisco. for market rate 69%. for office space 40%. people are making the connection when jobs are outpacing housing it adds to traffic congestion and housing prices, etcetera. i think it would be prudent to see if we can work something out with the department. thank you very much. >> commissioner: commissioners. >> thank you. . >> commissioner: i have a series of questions if you'll bear with me.

let me restate a little bit of history. the water supply assessment came about 20, 30 years ago when east bay mud said they didn't have enough water to supply the valley a proposed development within their service area. that set off a fire storm that ended in legislation creating a two-step process. one for projects of a certain size that is the water agency had to assess and if they couldn't supply they had to say how to meet them. you can't just say no and go

away, you have to tell us what you'll do about it. the water supply assessment we're looking at is a product of that it's to answer the question, do you have enough water and start a process and inform the planning people with the answer and if the answer is no, start the second phase which is to assess what it would take to serve them. one question for the city attorney, i think the intent of the legislation is out of the water supply assessment would come a yes/no determination. is that in fact a requirement of law? we have to stay yes or no we do or don't have enough to water. >> the agency has to make a determination whether there'll be sufficient supply available to supply the project over a

20-year period in single-dry and multiple-dry years. the phrase in the statute is sufficient. >> is that answer to that question a yes or no? it's sufficient or not sufficient? >> in the w.s.a. that's how we phrased it. >> commissioner: this doesn't come to a conclusion that says we have enough or don't have enough water. it says we can provide water is subject to rationing which is in excess of our current levels of service standard. that's a nuanced version of yes or no. it says we're not in a position to service beyond our level of service goals or whereas what's

in front of us legally sufficient? >> it doesn't speak to how much rationing you would impose but they clearly layout the supply shortfalls and are clear there would be significant shortfall under certain scenarios requiring rationing and the way to respond is through rationing. >> commissioner: >> offsetting any future rationing if there is a shortfall. however, none of those are sufficiently developed to have a completed ceqa document and often the agencies i'd foi what's in the pipeline -- identify what's in the pipeline that could meet that in the

future. >> i'll take as an answer it's sufficient for us to fully inform the planning process as to the conditions underwhich -- under which we could provide water and this document is an attempt to meet that standard. >> i would not disagree with that statement. there's a structure developed for a water supply assessment. my question is is that structure the mandated structure or minim minimum requirement for analysis

done? >> it's a minimum and mandate. i'm not sure i'm following. >> as an example, the water supply assessment does a multiyear analysis of drought and it take three years. we use eight and a half years. if we chose to, could we provide input from eight and a half year analysis? >> you to do a 20-year projection. it include the design drought. and you guys are using the design drought to come up with your numbers. >> we are using the eight and a half year drought scenario to

inform the three-year requirement. the first three years would be the first three years of whatever drought scenario we had which would be an eight and a half year. that's to get to the end of eight and a half years is how you would act in the first three years. >> the last three years would look different? is that right? >> under the state board scenario it gets quickly up to a high level of across the board. by the time you get to that you're looking at the highest level of rationing. >> my impression was as we went out beyond the third year, those numbers got bigger? >> they may. i don't recall off the top of my head. they may get bigger but they get big fast in the first three years and by the third year it's

only a smaller increase in the last five years. >> commissioner: i have a concern. if the planning scenario being used for water supply assessment is different than the scenario we use in assessing the sufficient of our own water i would think that's a problem and any conclusion done on the shorter period would be misleading. >> i think the conundrum we're in there is and it's interesting because people have been critical of us for using such an extended scenario when the state only mandates three years which the state is now saying publicly we think people should plan for five years of drought and think some day you'll all catch up with us at eight and a half years which is the most pru dent water supply planning and trying

to get through the process and that's what we've done. >> i want to read what the statute says it has to discuss whether the total projected water supplies for the project during normal, single, dry and multiple-dry water years during a 20-year projection will meet the projected water demand. the word is meet not sufficient. i misspoke. >> the simple answer would be no, it doesn't meet. >> right. >> commissioner: it meets it under some policy criteria but a simple reading is we don't meet demand. the difficult situation is we can't meet, if in fact the state board's order is implemented as

raped, we can't meet the water supply needs of our existing customers >> without additional supplies. >> or some other actions. rationing and reclamation or something. but we have to do something for ourselves. what is reasonably informed whether to add someone to the boat? >> sir, are you saying we should determine -- my understanding is that we are telling them what we think the picture is and that's that we can't reliably build the water unless we build the projects with rationing and we're giving them that information saying we don't have

the water now. >> i don't have a problem with that. the analogy is we're all in the same boat. the problem is the boat has some leaks and our job is to plug the leaks and adding more people to the boat doesn't change the math or the basic problem in front of us. but we owe it to say the boat has leaks which is the full disclosure part of this. let me pursue one other set of questions. and this gets knee -- into the weeds but this gets into analysis i have not seen us do before we've gone through a thing that says the rationing we'd impose on the retail service area is one level but on this project it would be less than that.

with go through a process that says it may be the case this or subsequent commissions would choose to treat projects like this somewhat differently than the past and goes through a bunch of math that says so with this project the actual rationing may be significantly less than what the rest of the retail service area experiences. that's a strange process and having trouble figuring out why it's appropriate especially if we're trying to come up with the best, medium and worse and saying we'll fiddle with that so it's not the worst for these projects. the looks like spot zoning.

why are we doing that? >> we were requests to do that by the planning department bep tried to make it clear to the planning department we would not do that but because of circumstances they insisted on getting some estimate of what the project would be and the methodology was to take what their obligation would be under the non-potable ordinance as a way to do their own recycled water project and supply diversification. there be meeting some of their demands up front so when it came time for the commission to decide in the extreme dry condition we had to call for rationing, that we would potentially give them credit for having done that all right.

it doesn't mean other people couldn't catch up but it was one we frankly did not want to go down that path but planning was fairly insistent. >> i don't think i want us to go down that path either. first of all, we have an plan up place and if we have to impose rationing we'll do it as an indoor/outdoor allocation and if that's appealed on a per capita basis. it was explicit in how we'd do it. for this water supply assessment we made up something new. it may be good but if the commission action hasn't been contemplated, let alone taken people don't see how we can do -- i don't see how we can do a -- an assessment based on that. >> and by our assuming we

approve the assessments, is that a cog into moving the projects forward? >> it is a cog in providing material that planning can then use in the see ceqa development process. they're necessary elements to be able to compete their ceqa review. >> our assessment would enable these projects likely? it would fit in the portfolio of items that are used as criteria for the planning commission to move forward? >> it's an informational document required for the ceqa review and you provide it to planning and plan has to use it

you're not playing a role in project approval. >> >> commissioner: i think our obligation is to provide as robust and straightforward and honest assessment as we can to facilitate that decision-making process. >> i know from my understanding i think they wanted to acknowledge the fact we have this new storm water ordinance that required buildings under the ordinance to use let water. -- less water. it's not the same as the others. i think they wanted to

incorporate we're using building that aren't using as much water as buildings before. i think that's what they were trying to get at that's a reasonable discussion but it hasn't happened. the other thing is when people install features that lowers their water use it's self-correcting. whether you want to go another step of saying we want to give you an dissatisfacti additionale you've done the right thing but it seems to me the answer would be yes. my sense of the assessment is i

would not like to have the assessment go forward with the hypothetical. there's things that can be done but to say for this project the answer's going to be something else i think is wrong. and i want to make sure it doesn't under state and if you are right by the third year we're up to the maximum and it gets worse in the out years between three and a half and we should include that in the presentation. and i'm not sure you put additional cluck or do a foot note or -- additional comment or

foot note in the full planning period it could be worse. those are the specific questions. how and where do the concerns get addressed ? if our obligation is to assess the impact of a project and the cumulative analysis. >> and is that part of the ceqa process. for example, the specific issue that peter has raised.

and we have seen the questions on the bailen's development which had little housing and ultimately had more housing but they were not under the obligation to provide a jobs housing balance within brisbane and i want to know how big are the region and those are policy land using question are big. are they question the public utilities commission should deal with? i would not recommend it. >> tock clear i have no interest in having the -- to be clear i

have no interest in having the commission get in the way of something that meets the criteria. i don't see a big reason for us to do that here. i think we have a big problem the additional problem is a little problem by comparison and don't think adding the projects changes our world in any significant way. i don't see any reason not to provide an assessment and allow that process to continue. i want to make sure the assessment say straight-up -- is a straight up one and it's representative of eight and a half and we don't presume an allegation method nobody in public has thought of or acted on. thank you. >> i want to make a comment and

ecc eccee -- echo what you're saying. we're in the public utilities commission commission not planning commission and housing is an extremely issue to everybody in san francisco because of the pressure that we have more than almost any other city except for maybe san josé and the bay area is in san francisco. and there's a value in the work you've din in this type -- done in this type of assessment. i don't know if you'll continue this or not with the amendments that you're suggesting and i would probably want to abstain on this because it's the first time i'm looking at these things myself but that being said, i do think there's value in putting the assessment together to find out what the water use is going to be. i think it's going to be helpful moving forward here in san francisco we do get these

reports as to what the effect on new development projects are based on the use of water and electricity and sewers and everything else. we should not get involved with dealing with the housing crisis officially here at the board. i think the background to the resolution is saying we don't know. we don't know what scenario is going to be the final scenario. >> that's correct. >> i think that's fair enough to basically we're saying we have no idea it depends on what's going to be happening. >> i wouldn't say we have no idea. we have scenarios that play out in a different way. >> but which one we have no

idea. >> i would say the one we feel most about is the worst. >> that's where my concerns lie that's what we know most about there was an order adopted in december that would putting us in the third bucket would assessing water, correct? >> i believe that's the case. that makes me hesitant until they reach a conclusion or have a clear understanding on where water supply would come from.

we have to say this is what we'll do in this scenario and that scenario and holding it is something that i would not recommend because it's not our job to police and say stop these projects. because then it's on us. it's to provide them with the information we have and i agree with some stuff we should have pushed back with and have been straight up and saying this is where we are in each and maybe clear if i we have an eight and a half year drought and this is what it would be. i agree with that. >> the resolution, as i read it did not clearly say we do not have supply ly.

they have to know this could put us in a position of rationing. >> i would answer we have enough water but people have to ration. people would have to ration. >> commissioner: which is the statement message to the state board right now. >> commissioner: for all the projects listed looking to address the largest problem if it becomes reality, all those will require ceqa analysis and

approval of the planning commission. we can't sugar coat it. i suggest we carry this over until we can come back with a revised version of the w.s.a. that deals with the, from my perspective, the two issues i raised and any others appropriate to include. i agree. >> i do think it needs to be clear in the resolution that that's where we are that that's the process and urging state to get to the conclusions so we as a commission and water agency

can plan accordingly for water supply. whether it's a high flow or compromise and understand we may not have that decision in hand before we need the approval but need to be clear with the planning department on what the implications are to meet supply. we can't under current standing order from the state. again, i believe we can but we'd have to have severe rationing. >> we feel we can supply water with severe rationing. >> i have a question for mr. richie. if we put these other two criteria in the commissioner

moran is suggesting in his comments, what would be the time line of rechanging the formula? >> they're ready to do. those are not hard changes. there may be consternation where they want the us to project out this we'd have to say we're not going to do that because there's a policy in place with a progress -- projection but it's different and what they have to do in term of rationing. we have a number of wholesale customers anxiously awaiting to see what the p.u.c. does because

they all have w.s.a.s which rely on the picture for the regional supply. they're all awaiting to see what the commission says. >> this is an assessment. this is not an approval of housing pieces and the work is of value for the commission. if you're waiting to get the report. >> technically the changes are easy to make and some people are uncomfortable they don't do anything else but that's the commission's purview is what this says. >> to understand the second aspect of the request, are you

saying go funk -- going further out than the 20-year project? or eight-year increments? >> it's demand and supply options and then to i would assume to say at the 20th year if you were paved with a doug drought, what would a 20-year drought look like. i'm not suggesting to go beyond the 20 years but the severity we see when we do our planning on the eight and a half year basis be reflected in the report. >> the table would be reflective of a 20-year period projection and the last few years may have a different color or something like that to show this is an

information piece. >> commissioner: am i hearing it will be back on the agenda if we delayed it to the next meeting? >> i don't know why we can't get it on the agenda for the next meeting. these are simple changes to make. there may be consternation in the planning department and their attorneys but part of me is like that's not their job. it's your job. >> and we have the discussion of how the potential credit. do you want to go further than what the state law requires and do an eight-year? >> if it turned out the third year is as bad as it gets leave it that way. i'm fine but if the other years

show it's worse we have to show it's the case. the other is the calculation to a rationing level. it says the general level of rationing is 38%. >> there's wording on page 18 saying this is what it would be for the customers collectively and may not be a precise number or the pushg may make a -- p.u.c. may make a policy decision to adjust it. >> >> that would be fine.

>> clerk: a motion to continue to may 28. >> commissioner: can we make a motion to move all of them. >> 10 through 13 to the next meeting with the adjustments based on commissioner moran. >> second. >> clerk: who made the motion? >> commissioner paulson. based on the two criteria commissioner moran suggested. >> commissioner: is there any public comment? any further discussion from the commissioners? seeing none, all those in favor? opposed? the motion carries. >> let me make an offer as well. planning may have see qua issues i don't know if it would help to

adapt a policy that says and that level of rationing isn't okay. we are committed to meeting review criteria that allow us to never impose that and that's our intention. i don't know if that's helpful or hurtful but it is it is i'd entertain the policy. >> we'll work with the city attorney on language to that effect. >> and i'd like to weigh in because of the constituency i represent and the v.s.a. process is still underway. i appreciated you saying when we talked about the priority are still there and somehow put language in the resolution that says we have obligations to meet for the sake of the environment

and eco systems and fish and that's the balance we're trying to reach. >> commissioner: we were asked do we have enough water and we should answer that. if we start putting things like that in, everybody can add things. we should just answer what we're asked to do. >> i feel there should be reference to the state mandate and there is but it's not specifically related to why

we're struggle the water supply question. we can look at the language. >> that's why we put three options because we don't know the outcome. let us work with the city attorney and we'll touch basis with you on your issues. >> that brings us up to item 14. >> approving to the memorandum of understanding between the san francisco public utilities commission and local agency formation commission and thunder showers the general manager to extend it a total mou term subject to board of supervisors

approval. >> good afternoon, commissioners. i'm the director of the clean power s.f. program for the pour enterprise. i wanted to welcome our new commissioners, maxwell and paulson. i look forward to working with you. have you before you an amendment and center hill mentioned it in the update to provide a one-year extension to the memorandum of understanding between the p.u.c. and local agency formation. the amendment would extend duties to monitor and advise the p.u.c. and the san francisco board of supervisors regarding the progress of the clean power s.f. development and i am