>> good morning, everyone. happy monday. happy to be here for this special hearing. madam secretary, please call the roll. >> president. >> here. >> clerk: vice president. commissioner paulson. he's expected shortly. commissioner rivera is joining us remotely. commissioner stacy. >> here. >> clerk: you have a quorum. >> due to the on going health covid emergency, any emergency orders of the mayor and the governor concerning social distancing, this meeting is being held via conference, for those watching the live stream please be aware that there is a

brief time tag between the live meeting and what is being televised. if you wish to make remote public comment, dial the number onscreen, meeting id 24882371755# to raise your hand to speak, please press star-3. if you don't stay on the topic, you'll be asked to limit the comment and stay on item. there will since this is a special meeting, there will be no public comment. we ask that you refrain from the use of profanity. if you're already not done so, please silence your electric devices. >> thank you so much.

if you're calling the first item, i would like to announce that the san francisco public utilities commission, acknowledges that it owns and unseeded lands located within the territory of whamaloni tribe of the historic federal recognized commission san jose. also recognizes that every citizen revieeding within the greater bay area has and continues to benefit from the use and occupation of the macaloni tribes since before and after the san francisco public utilities commission founding in 1932. it is virtually, it is readily important na we not only recognize the history of the tribal land on which we reside but also acknowledge and honor the fact that the people have established a working with sfuc

with the many greater san francisco communities today. madam president, please call the first item. >> first item is item number 3, public hearing. staff presentation and overview of the proposed budget priorities. >> good morning, commissioners. dennis, general manager of the san francisco public utilities commission and thank you for joining us at this special meeting. we're at the mid-point of our fix year process and usually we have a break from budget hearings on the off year. however as you know, we've been working very hard on our capitol plans and have a lot of updates to share with you with the budget being o futboler lea dopted with the regular meeting in february. so i want to, i'm sorry? can you put the presentation

up, donna? so here's our agenda for today. first, quick reminder of about our budget and process and what to expect. then i will go over our budget context, challenges and approach and then i'll hand over to c.f.o. nancy to go over our proposed fiscal year 2023-24 operating changes, capital budget and ten-year capitol plan. she will talk about the budget and focus on prioritization. and we'll also talk about the 10-year financial plan showing how all of these decisions impact our rates in the future. after that, we'll hand over the presentation to the enterprise agms who will go over their capitol plans in more detail.

let's begin with a reminder of where we are. we have a fix 2-year operating budget which was adopted by the commission. we only put in place one-year capitol budget. so we're at the mid-point of bi annual, as we've been busy with updating the capitol budget, we will talk more about that short low. so what will be asked of you in the budget process? first your review and oversight. then you'll be asked to adopt the budget before it's proposed to the mayor's office. and at the february 14, meeting. you'll vote to adopt the chiz, capital plan and ten-year financial plan. our goal for today is to provoid you with background information for these items. we would like to walk you our strategy in developing these budgets. let's talk about the budget and

the factors influencing its development. first, despite a wet wibter we're still officially in a drought and we don't know when it will end. secondly, the economy is very uncertain. a potential recession will impact our customer's ability to afford their bills. inflation is high, rising interest rates make borrowing to pay our capitol plan very expensive. making procurement slower and construction more expensive. we're in the middle of study for water and race water in a package to be presented later in the spring and keeping to keep rates affordable we're being careful to make choice to see ensure rate impacts are reasonable. we also face internal challenges namely, our ability delivered capitol project at the rate we plan.

this is lead to significant unspent balals --balances carried from year to year. additionally the market for power has been volatile with incrasses putting pressures on budgets and rates. lastly, we're facing a regular tory in the waste water enterprise which will entail significant capitol costs. so with that in mind, how did we approach this mid-cycle cycle process. firstly, the operating project. wore at mid-cycle so we're keeping changes to a minute. the main changes are to update projections which have increases significantly as i just mentioned. and to update revenues based on latest volume projections and rates.

secondly, capitol, where we have been doing a lot more work over the last year. as nancy ham went over the last year's commission meeting, last year's had 9.9 billion dollars and total sources of 8.6 billion dollars, leading to a 13% inbal. instead of balancing the plan, by assuming long term increases, we took the decision to move forward with a 10-year plan and impose for fiscal year 2023 as we continued to refine our capitol plan over the course of the last year. our commitment to the commission, was to revisit the fiscal year 2023, 2024 capitol budget and then you're capitol plan during the course of the last year. so here we are today to present a balances plan that meets our

needs informed by affordability and rate pair affordability. so with that, i'll hand the mic over to thans' hamm and her team to present more details on the budget. thank you. >> thank you, dennis. god morning, president, vice president and commissioners. my name i'm nancy hamm cfo and agent of services. thank you for your time this morning. how do you use the clicker here? i appreciate, thank you. the first slide provides a overview of 23-24 operating budget totaling 1.8 billion

dollars. our operated bijt has increased 26% or 363 million dollars. the pie chart to the right represents the same budget by major costs categories. as you note the last cost driver is for capitol users represented here in blue. we use these funds to pay for debt service which is comprised of interest and principle repayments and for revenue funded capital each current year. the second cost driver is for the purpose of power, highlighted in orange for power. they account for nearly 06% and almost all of the budget growth. we will continue to do so in the near future. this is another view of the operating budget but by enterprise. on the right, is the 1.8 billion dollars again.

the largest share is for the water enterprise representing 38% or 671 million dollars. they are followed by waste water at 24%, hejit water and clean power at 21%. in the last column part, 274ftes for staff and also broken out by enterprise. the number is closer to 2300 each year. provide each to the enterprises. they include business services, external affairs, infrastructure, human resources and the office of the general manager. bureau costs are allocated to the bureau causes via education models.

this next slide proposed ten-year capitol plan which is 8.3 billion dollars over ten years. as shown, front load withed over 70% in the spending plan in the first five years and this is largely driven by waste water program. the reason the capital plan is highlighted is through the payment of debt proceeds, approximately 75% in a year and then cash funded another 25%. later in the presentation, we'll talk about the 10-year capital plan. for now, we'll continue on with the budget mid-cycle changes. as dennis mentioned earlier, we're in the middle of 2-budget. these changes add up to be a big figure at 84 million. the incremental changes are

those made to the original fiscal 20 23*-24 budget that this commission approved a year ago. these are not to be confuse withed year to year changes. we're looking back one year when we proposed year two of the operating budget. the overall increase on the sources side is 84 million dollars and primary driven by an 89 million dollars in the sale of electricity, in the clean power enterprise to offset higher power purchase cost. other increases include an 8 million dollars increase in sales, water sales, due to a projected 5% rate increases and then a 5 million dollars in the use of fund balance for hetch. to reflect an update from the power rates that was completed last year. but was not input in time for the original budget when it was adopted. on the uses side, the power

purchases represent the most significant increase as mentioned earlier by dennis, 118 million dollars increase driven by increased purchase costs in the current volatile market. they include clean power asset and represent an 86% increase in their power budget as compared to prior year. death service has decaesd due a saving of 20 million. majority is from debt service from 10.7 million saved by not issuing new debt for the bio solids and project. instead we drew upon, low interest loans, there is another 8.9 million dollars in saving related to a refunded transaction from 2022 and due revised schedules, meaning we didn't have to start repaying those debt issuance in the current time.

capital funded revenues decreased and operating costs were increased by 1.7 million dollars related to the recycled water plan which is scheduled to come online later this year. this project was transferred as operational asset and requires funding in the current year for on going operating costs. and lastly, inter developmental work orders increase by 1.5 million dollars. this is inclusive of correcting a department of work order that was mistakenly as a one-time cost instead of annual cost. and increasing city attorney work order cost for the additional support for the acquisition project. lastly there was an increase in waste water to balance source sxz uses in those enterprises. so once all of these mid-cycle changes have been incorporated,

we see here again the same 23-24 operating budget. we emphasize again, capital is the most important cost driving and will continue to grow significantly. on the left side of the cost, capitol cost have accounted for 30 to 40% of the budget in the past five years. this means that 30% of every dollar we collect, goes to capital. this is expected to rise by 50%. this is due to our debt on water and sewer improvement program and any new debt that will be issued for our capitol plan. specifically, the sewer system improvement and large projects, are driving large increases in debt issuances and this drive-in crease s operating

costs. the blue table shows what goes paying capital and hut will grow. by the end of the 10 years, two-thirds will be paying for pastor on going capital projects. lastly, returning back to the chart not the left. it also highlights the power purchase, the second cost driving and especially this past fiscal year. these increase costs again, play significant pressure on powers budget which has been taken into consideration as part of our planning. so now we reviewed the operating mid-cycle changes and demonstrated. we're going to continue with our capital plan. sol what is the ten-year capital plan. longing range of forecast that we make and we update annually as we cart by our charter.

it's comprised of high level projects informed by individual data sheep with scope, scheduling and costs. these last two are also included in your information packets if you would like to refer to them. we represent a two-year capitol budget but as this year, it's a one-year budget. this will plan will also be accompanied by a written report this year. this year, staff has worked diligently to mitigate increasing cost in the capital plan and very important to our financial picture. we focus on making sure that we make these needed assessment. so why have we done this? number 1, we want to keep utility affordable for our customers. water and waste water rates have increased by both 75%. upcoming financial plans project annual increases of

over 9% and increased combined water and waste water utility bill increasing to over 90% over the next ten years. we have shown that capital cost are growing cost and put pressure on rates. in addition, there is a uncertainly of obligation operational demands which impact rate. and second accountser we want to put a plan in place that is deliverable in a time frame that we plan for. there has been a miss alignment between our budget and actual spending that has lead to unpaid balances carried over each year. we want to issue, debt just in time, when we need it, not addressing this miss alignment, does create multiple financial risk for our agency. this year, staff worked together to balance and develop

an affordable and deliver 10-year plan this. table highlights the changes in last year's proposal. we're proposele 8.8, this is a lower from last year's 9. billion dollars and represents choice that's we made as a agency to manage company tal spending. including, careful construction and adjusting for realistic tlifr ability, reducing cost in the out years to offset near increases and performing prioritization including of consideration and unforeseen costs reding to regulatory risk. we're proud of our work that we have done to right size this capital plan and we feel it representing the right balance between needs and affordability and deliver ability.

our enterprise will provide more details about the project that they included in the capital plans. while we have made great strides, we know there is more work to do. we're now in a multi year project to improve our capital planning with multiple work streams that will focus on planning, budgeting, management contracting and resources and other aspects which affect our planning and deliverability. this slide, this next slide here, details the ten-year plan again. showing all 10 years by enterprise. again, this is the 8.8 billion dollars of which 75% is sort from debt proceeds and 25 from annual revenues. this aligns with our commission capital finance policy to fund a nim of 15% from current revenues. waste water, has the largest

share at 4.9 billion dollars in this 10-year plan representing overall, representing half of the overall plan, even after they reduced their plan by 1.2 billion dollars from their proposal last year. as previous mentioned, over 70% of the spending is in the first five years that the plan largely due to the investments in the early years of the plan primarily for the bye product facility. this includes other projects for water, such as 2000 marin facility and millbrid yards. this is also because of the efforts that we have made to control costs, you see these reductions largely in the later years. okay, so we've just completed the overview of the proposed mid-year operating changes for next fiscal year and then that

of the 10-year capital plan. this slide is focused on proposed capital budget for next year, 23-24, that is the 23irs year of 10-year capital plan and subject to four supplementals one for each enterprise that will be adopted by the mayor by july. the biggest here again is waste water, representing 71% of the budget. this is driven by the bio solids which is currently in the construction phase. the construction for year 1, for power and hetchy.

the slide details a longer timeline that reps our long future. our 13 billion dollars. the gray area representing the money that we approached via the budget but not yet spent. this is unspent amount of the 1.7 billion dollars that we referenced before and highlighted throughout today. the orange area is representative of the 10-year capitol plan that is proposed before you for adoption. the smaller outline box, represents the first year, the next year of the fiscal year that will be appropriated in total, that is the 8.8 capital plan. the green portion is the 10-year plan capital need for completion of current project.

this is about 2.5 billion dollars, and does not include any new project outside of the 10-year plan. so you can see that our 10-year plan is a snatch shot plan. this is a lot of funding that we plan to spend in the future and that we're asking and seeking your approval for. again, please note that 75% of our capital plan is debt funded and we issue debt as needed which is right before we want to spend it or need to spend it. so all of this, entails a new significant amount that we need to issue. which i will highlight in the next slide. so as noted earlier, all of this commits pc to a large debt. our current debt out stand ising approximately 7.4 billion dollars in bonds, notes and

commercial paper. and in addition 2 billion in executed federal and state low interest loans for a total of nearly 10 billion dollars. funds 6.3 of new debt issuance by the end of 2033. again, capital represents the largest portion of our capital costs and affects rate. over the 10 years, it will increase twice as past. --fast. you can see this where it's represented in orange. you can see in the san francisco capital planning committee, they noted they had a 3.5 cap as a percentage of revenues. as comparison, our agency has projected 24.5. so this is a good note for our agency how we can more affectively plan against our

issuance of debt. the question is, how much debt is too much? again, by fiscal year 2033, at the end of 10 years, nearly half of the operating budget will cover the costs and na will be 2 thirds for waste water. i object creasing interest rates also drive up our borrowing costs. and the 30-year debt term means that impact pairs decades into the future. so we must consider our decision seriously. with that, we'll finish next with a brief overview of the 10-year financial plan. and explain how this ties to the financial sustainability and rate projections. the 10-year financial plan is required by our charter on an annual basis, it's where all of our forecast expenses rates and revenue flow together. we will return to this commission on february 14th to

present more on a 10-year outlook. today we will focus on how the budget feeds into the financial plan. it's not just input ing figures into the capital plan. we do incorporate adjustment to see capture how and when expenses happen. first operating expenses are based on a fiscal year 23-24 budget combined with an execution factor. that is a factor that assumes how much will be spent. inflation is then factored in. for revenue capital projects, cash is required and not forced from the capital plan. for debt funded capital projects, the capital finance team projects when funds are needed and develops a capital financing schedule to optimize debt issuance. this means, that expenditure are not expected until several

years after they have been appropriated. costs are spread out over many years. projecting selfle volume. the majority of the volume is from-- we forecast recover to prepandemic levelser by the end of next fiscal year, and will level out at a new normal by the end of 25-26, includes water usage prepandemic. en like the other enterprises, hetchy power, not just uses

from customers but projects new growth in customers as well. however as we don't want to rely solely on growth, it maintains on when new projects will come online. we plan a worse case scenario, we lever those to main ain lower rate increases in the future. as queen power sf has ma insured, they only assume minimum growth on their plan. the next slides will show the historic for water and hetchy power. this graph here shows whole water sales in dark blue and retail sales in light blue. the shaded areas represents sensitiveities factored in our financial models. you can see the financial growth as well as the recovery to the new normal and 225-26.

a note that we wanted make, retail sales were 52 million gallons per day and lowest in our records going back to 1992. after recovering from resent abnormal trends, volume are impacted by trends, population growth and price elasticity. for hetchy power, you can see the same recovery from the pandemic's impact though it's followed from new customers and infill sites as these come online. for many years, hetchy power usage as been municipal. this plan growth in retail is a big shift for their enterprise and as mentioned earlier, we do take a conservative approach when balancing our plans around

growth by assuming and lesser growth in the customer base. similar to the capital plan, there are cost drivers for the financial plan. for expenditure, the largest focus is in two areas. the first, the capital plan itself. as it is significant and annual funded and debt service on issued bonds are major cost drivers. we've already reviewed the increase sxz how they will affect our future debt service. in addition, interest rates are higher, meaning that the cost of borrowing money will increase than these add up. second, for the operating side, many expenditure area do experience basic inflation. however the exception are power purchases for hetchy. and we did share those earlier as well. the power markets had

inexperienced increases in supply costs and these have been discussed earlier today. we spent a lot of time modeling to refine our forecast and budget for 23-24 incorporates these increases to power supply budgets along with budget contingencies to cover potential fluctuations beyond what we're forecasting. so how do these changes affect our forecasted rates? the table shows here, shows a net rate impact for next fiscal year and average rate over the 10-year period. we will provide more details at the february 14, commission meetings. for water, wholesale water are set by contract mythology, they will inexperience an increase due to the way that their contract works. waste water increases are

significantly higher due to current project and sources of improvement programs specifically the first five years. we expect 8 to 10 increase for the immediate near term. hetchy power and clean power sf have short-term increases to address upcoming supply costs but will decrease in the later years of the plan. to note that hetchy power, for next year's rates have not been adopt asked we'll be back in april and may for approval of these rates and then lastly, this final slide details the impact of rate increase that's we just discussed in the water and waste water for the average single family household. we can see how the current monthly bill of 138 will grow to $224 by the end of 10 years,

it's a 90% increase. while we only adopt the plan for 10 years, we make sure that we cap actual the impact. and please motel, that there is there is a delay. project in the later year, don't start their rate impact until after the 10 years that you see here. the outer years of the plan, include cost for going on capital repair. they're projected to grow, culminating. the red dash line represents the affordability which says the bill must be under 2.5 percent of the median household income this. plan does not meet the target. however we're in the process of reviewing affordability metrics

as it will be difficult to say that a bill of $100 is truly affordable. we'll be back with more information that will look at the impact of the bills and customers who face a disproportionate burden w.that this concludes my presentation. thank you. >> thank you, ms. holmes, that was great. thank you, any comments? >> this is a quick reminder, you talked about how this plan is has all projects in place, are being budgeted. is there anything and maybe this is a question to dennis, just to remind me. are there any other projects that we have not accounted for that could change, you know,

you know, the modeling that you're doing for the 10-year plan and the report you have? is there anything that we're missing? i mean, that's kind of a big and little question all at the same time. >> the plan represents what we know today, there are always things that could change. >> right, is there a big thing. >> commissioner, just one thing, the 10-year plan is a snap shot in time, so we're constantly looking at that to adjust priorities in the event that there is something that to your point that would sort of alter things. but this representing as we speak today, our and what you will review today, our priorities and that's what we've been going over the course of last year, what are the priorities that we see now? but it's not like we stop and it's totally static. >> thanks for reminding me of

that. i just wanted to ask ahead of time are we missing anything, thank you. >> thank you, commissioner. >> yes, thank you for your presentation. looking at the 8.8 billion this we have now and reduced from 9.9 billion and you said carefully one reason is because we're carefully reviewing adjustments and tlifr abilities what were we doing before? we were not doing this prior to the when we came wup a 9.9 billion? what was our modeling? why are we? it seems like we're doing it now but we were not doing before? >> i would not specifically say that staff were not doing this before. i think there has been a renewed focus on how, you know, we can do capital plan anding deliver ability. and that focus is looking at the process internally and how

we derived this information, the staffing, the resources, you know, methodology. and so, staff our strategic improvement and change bureau have began a capitol planning and deliver ability program that will look at how we deliver our projects. this has begun a couple of months ago and so far but this small but mighty team has gathered over 30 staff to look at various areas. these include staffing, contracting procurement. so some of this it's a three-phase project, the first two is to look at methodology, it was just in time for our capitol plan development that we're presenting here today. and some of those, some of those things have--go ahead. >> do you think if we had done

this before, that maybe we would not be in this position? i mean, you know, i just, when you say things like diligently project, it means like maybe it was not as diligent before. that's a concern i have going forward, is maybe our project management was not what it could have been and our finance and our budget management was not what it could have been? so you know, i'm just concerned that it seems like maybe we were not doing this before. >> before i hand it over to robinson here, i do want to clarify that is not my innocent of what i said. i have to emphasize the importance of due diligence and that does not mean that staff previously, or previous groups had not done that. when you look at process improvement, it's something that improves overtime. there may be new methods, now

way, how we do our financial models, i'll turn the rest over to steve in a moment. but you know, business process improvement is not an on going thing, it's a psych sxl process. as you bring more methodology, you look and that's what you call by due diligence. >> fwaod morning, steve, assistant manager for infrastructure. in addition, i think it will be helpful to kind of mention two things. one that, the work we need to do is growing, we have three enterprises, each individual unique needs. starting the way, i've been a more family with, has a history of assets that need to be invested in. so the understanding is working with all three enterprises, the programs themselves are growing coming from where we started

with 20 plus years ago. secondly, i would add that the market conditions and the world around us has changed in the last few years. when we presented the unbalanced budget a year ago, it was a realization to shine a light that that we have more needs than we have sources. so again, last year to pause and to go into greater debt on how we need to look at the things and where we need to go from there. our needs are going, and the affordability has changed. so i think all the words are extra due diligence and extra care to go now providing a more unified approach as we look at it as an agency. >> any additional comments? >> yes, commissioner, president. >> go ahead, commissioner rivera. >> yes, i have one question for nancy please and it's regarding our rate care forecasting.

does our 10-year rate pair forecasting include the california aggressive housing plan increases for the bay area? >> erin franks, acting director of financial planning. >> hi, yes, so we do use the urban water management plan that forecast the need for water supply growth over the next 40 years. however, we're starting from the current sales involves which that plan starts from a larger sales volume so. since growth is down due to covid and drought, we're using the deadline but not the starting point. >> so erin, are you saying that we're not taking into consideration the state's aggressive housing development plan that they're implementing in the bay area?

is that correct? >> we are and that we're assuming that population growth is on the trend line that the city is planning for. however, right now, we have had a lot of population decline, i'm sure you've seen the news about how san francisco has lost residents so we're starting from a lower level than the most resent population forecast which have us before covid. >> thank you. >> go ahead, please. >> thank you, again. when you said that we are reducing, we are it says planning for use of unspent appropriations before requesting new funds. why weren't we doing that in the past? if i'm getting my kitchen refinanced, you know and i'm not going to go and get more money before i'm finished?

why were we doing that before? i mean, you say that, planning for use of unspent appropriation? >> so we request new funds for new projects that do come online so. when a project is approved and the finance has been put into place, the funds are dedicated for that project. so the question is, when will the project start on time? and if it does, that's great and if it doesn't, it will start at a later date. those funds would not be reallocated for another year. every year we come for money for new projects. and that is the budget that was appropriated for previous capital plan. >> hi i'm laura bush i'm the budget director, as nancy said,

we do request new appropriation every year. we needed a one-year appropriation last year. we're trying to get this unspent balance a little untd control. the capital plan has increased a lot, over the last decade which has lead to these unspent balances growing and growing. and we have a project scheduled in place, but things get delayed for unforeseen reasons, many factors. we don't spend the rate that we plan to that through this process we're trying to get a handle on by looking at the deliver ability and the true actual money that we can get out the door before we request any funds. so that's why especially in

hetchy power, it's lower than you might expect looking at the other years, that's because we have looked really hard and worked hard before we asked for more funds. >> excellent. now i have a series of questions. really appreciate going through the presentation, i think couple of things that comes to mind--first of all, i want to highlight a few things. one is, rj robin mentioned this year, we have benefited from the investment that was made in our water, waste water and energy systems many years ago and many of those coming to the end of their lifetime and we need to replace them. now what keeps me up at night,

are we investing in the right things? and you have heard me saying this over and over. sxl --and are we really thinking about in the next 20 or 30 years what our infrastructure going to look like? and is our money going to those needs? couple of facts that you mentioned, which is quite important, the uncertainly with regulatory process. and that is driven because we have more knowledge on how to operate our systems and they are much more stringent regulations to take place because we have to take care of our environment since it's instrumental to our survival. and also, because of impacts of climate change and the way things are changing. there needs to be a different approach to how we manage our waste water and how much water

we take out of the environment. and also the stressors that which we didn't anticipate. last 20 years, we have been more in drought years than wet years. in 2017, we had 2010 and then we had this year, which we are crossing our fingers that it's going to last. so and then we had covid, who would have thought covid would happen and there is no guarantee that another shock will come to our system couple of years from now. the reason i look at this list, i look at the proportion of our debt service and operating costs and it worries me that if the blue bar is now going to change, let me see, which figure that is, make sure that we're talking about the same,

slide 17 which the source is covering our cost is certainly. if we don't know the next covid how the next shock or stressor in our system is going to impact our revenue from people using less water, people moving out of the bay area. whatever that could be. then, that does not mean that we have to not spend enough money on our made operation and maintenance because we have to pay a debt. that 30% of 50% that we talked about right now, it's super important because we want to make sure that we have enough money for the next 100 years. so that's one thing that worries me very much.

that change in proportion and going from 30 percent to 50 percent that was mentioned. the second thing is, i also want to acknowledge i really appreciate how staff works hard to access the bipartisan money, law money and also the inflation reflection act money that, was really smart because that impacted the amount of money that we had to pay, that's great. i acknowledge that, but going back to shock and other very great example is what we're experience withing power this year. almost, you know, 4 fold increase in our power cost, who would have thought? all of those things, all of those unanticipating stuff are happening. i would like to say, we need to run more scenarios than we're doing.

commissioner paulson mentioned this too, not the scenario piece but what should be anticipating. what are the things that may happen but not anticipating. what are the things we're not anticipating. this may be the 5th thing, with waste water, for example, that's another thing that is keeping me up at night. as people use less water both in retail and wholesale markets, the waste is going to decrease. but our storm water amounts that you have to process, the amount that you have to release, has to increase. there is no doubt that you are going to experience more extreme precipitation that we have to manage. so trying to anticipate those changes is very important and waste water, this is not just us, every base water across the

country is looking back at how are they setting the rates and collecting money, what is the future of rate water? how that is changing the full to impact from different extremes of your experiencing. so i think all of these comments i made, is to say that i would like us to be a little more due diligence than we're doing short-term and long term budgeting. wife conversation wz the finance team. i would like for us when you're looking at rates, water and rate power, we have to figure out how to get off the metric rate and figure out how to recover the cost of service

that is much more sustainable in the long run. and the last thing i would say is, and you mentioned something else. and manage and entire team. we bring in more ideas and more people to track what is going on out there and how we can take advantage of that. all of you have your day jobs that are quite over alarming by themselves. you cannot do it all, making sure that we have positions that their job is to focus, what is new innovations pipeline, what do we anticipate, what is coming next. that kind of prediction is what

we need to have next. we need to make sure that we're on top of this and not end up in a situation unexpected things that would cost us a lot of money to change paths and promise, this is the last thing, which is as you're looking at the capital budget, as we're looking at the next ten years, 20 years, next year, i really really want for all of us to think are we investing in the right things? because, remember every dollar we spend today is a dollar that we don't have next year but we might be spending it in a wrong thing and 30 years from now, we may say, what were we thinking? we're trying to renew our infrastructure that is aging, and we're trying to maintain in the best of shape, but please please please, make sure that

we're as we're going through this journey together, we're investing in the future nl the past. that is something that again, you have heard me saying this and i want to continue pressing on it. i would appreciate if you come back and say, we looked at this, this solution may not work if we 5 storms coming within one month and give all of our precipitation within a month that we were suppose to get in 6 months. this is not going offer it. or we had this conversation with algobloom and the fact that we're going to have a nitrate. i want to you tell us what to do rather than continuing on a safe path of reinvesting on the same thing over and over and expecting a different outcome. i really want to leave you with that. i'm not sure if any of those

have answers that you want to give. these are the things as i was going through this list was popping at me and i want to make sure i bring it up. >> if i might, commissioner thank you for your comments. and i want to say t goes to, i know that both you and commissioner maxwell asked some questions and had a comment. and also to commissioner paulson's comment or question, i think that everybody recognizes that there is unpredictable future. and the whole reason for this exercise over the course of the last year, was to do exactly what it is that you're talking about. and to commissioner maxwell's point. when i came in, i wanted to make sure that we were doing as thoughtful and creative and responsible as we possible can. so that has been what this

whole exercise has been about is to prioritize as you're talking about. but that is not something that ends today. it's constantly thinking and constantly strategize anding looking for new ways to do things, whether it's new priority like maxwell has mentioned about. and that's why this is not, this is not the 10-year plan is not static. and it requires that we do everything that you're talking and that we do change perhaps in terms of our approach from what we did before and that's what we're trying to focus on. and you have my commitment that we're going to continue going forward. so i appreciate every all three of your questions and comments. getting one side different sides, and it's something that we all recognize that we have to, that we have to think

strategically of how it is that we balance those things, about affordability and unpredictability so that we're nimble. >> and on the affordability side, i know it's 75% looks like a big number. but the question is from where? 75% of a dollar or a 100 dollars? so being able to understand how, we have gone a long time benefiting from what we have had. and you know, we need to invest. we need to be thoughtful about what we're investing in. but i really appreciate the focus on affordability because we don't want to leave people behind. that's another piece that is important. i think you want to say something, so i want to give you a chance. >> i had my hand up too. >> real quickly, i want today say that we do have guiding

financial policies at the sfp and they include the rate insurance policy and debt policies. we reviewed these yearly and i believe we will before you later this spring to review those with you and provide any updates. >> i appreciate that, thank you. go ahead. >> great, so thank you for the presentation and i really think it was, you know, it's thorough and diligent as i expected it to be. i really do appreciate. and i do have a question that is you know, and frankly, i was waiting with bated breath to where your question was because the wheel barrel of issues that you talked about were very thorough to say the least. i have a specific question if you can elaborate a little bit more on the regulatory demands that may be coming up, the

certainty about that. if you can do a quick collaboration of what that may be. >> okay. >> you put that as an uncertainty and i want today hone down on that a little bit, please. >> good afternoon, deputy manager, ron. the upcoming regulatory items is something that you've discussed today there is a lot of new things coming up in the world, algae blum, storms and all kinds of things. so we anticipate and plan for those. there are also matters which are in currently in litigation, which we're not at liberty to discuss in open format. but it is our way of letting

you know that we're looking at the things and we anticipate having to come to you to discuss them and we're anxious to do so as soon as we can. >> it was more of a place saver than a built. i--bullet point, i get it. thank you. >> commissioner stacy, are you trying to make a comment? your name did not come up. go ahead. >> thank you, i really appreciate the information and all the questions. i just want to confirm a couple of my understanding based on some of the questions that president ajami asked. when on slide 17, when we see capital proportion going up as compared to the operating budget, i think i heard mr. robinson say that a lot of that

will be attributable to repair and replacement and making sure that we're maintaining the system, and will will show up in the capital project? >> yes. >> okay, good. these may be more specific questions for the water and waste water but on slide 14, i see that the amounts of the amount of money in the capital plan go down a few years maybe 5 or 6 years old and in fiscal year 32 and 33 both water and waste water go up quite a bit. i'm assuming that the agms will talk about that a little bit. but i was thinking that that may be part of what comes up in the future, whether it's a change in the requirement for waste water or a change in the

puc think we need to do for waste water for the environment. and boska asked a similar question and that may be recycling and that will be interested to hear from the water and waste water agms about that long term. i think president ajami has asked are we looking in the future? can we anticipate what is often, we're not able to anticipate. how can we be nimble and proactive in responding and truing to anticipate it and i appreciate that and i

appreciate this very thorough look and all the information on the capital plans. i'll be interested to hear about that sort of 10-year outlook. so thank you. >> with that, i'm assuming this will come up during the water? yes, okay. perfect. can we, thank you so much. can we have public comment please. >> members of the public who wish to make two minutes of remote public comment on staff and overview of the project priorities. please press star-3 to request to speak. do we have any members of the public? >> speaker: good afternoon, nicole, first time pleased to

be here to participate in this workshop. we did send a letter, i'm not going to reiterate it, i appreciate the commissioners looking at it, it included ten questions and i'm looking forward to the answers of your staff. there were a couple of things, i do want to call out, there was a reference to strategy implementation and change work group. i was pleased to hear that that was being put forward. we were concerned that the capital plan did not have sufficient robustness and that work group was the supposed answer. we met with him on july 19th and never heard again. so my concern and partially what your struggle is no update on what happened and what i can see it's hard to discern the

meat of what that group did. i'm not questioning that they did anything and that is my struggle. the other, additional comment that i will add, commissioner rivera asked about projections for purchases. i will point you to figure 20 in the presentation and page 20 and we also commented on this. those wholesale water purchase projections in no way reflect the required land use plans and housing plans that alle state, all areas jurisdictions are required to adopt by today, i believe it is. and send to the state of california or they will be fined and all sorts of things whatever that is. they have nothing to do with that. i get concerned that and concerned about that response, thank you very much.

>> thank you. >> thank you, any other callers in the queue? >> madam secretary, we do two callers with their hands raised. first caller, i've unmuted your line. you have two minutes. >> speaker: i'm francisco necosta. this presentation does disservice to the taxpayer. it has no vision and what i see is none of you can make a needs assessment. i attended a conference on saturday from 9:00 a clock to 5:00 o'clock. some of you should have been at the conference. does not do a need assessment on the contractors.

they have no clue on the construction. we need an audit on those instructions, that goal, they are making money, the machine is making money and you're trying to protect something ten years from now. the management mandates 8 2000 homes. how do you figure that into this equation? who is in broad daylight over the taxpayer? i can go on and on and on, but

you give us a maesly two minutes. i'm going to address this in my blog. you all need to be sued. and you need to be sued in a billions in the billions, i tell you. you stole the land. >> thank you caller, your time is expired. next caller, i have unmuted your line, you have two minutes. >> speaker: this is director of river draft. the long term includes some very important information. for example, the full 8.5 year design drought at 240mgd demand which is 20% greater than the

2022 demand would require 1.039 acres storage. as you know, total storage is 1.471 million acres feet and if we assume that is dead storage that brings useable storage to 1.375 acre fee. this starts with full storage, million acres minus 3.0, for the drought at 240 million per day, results in 66,000 acres feet left in storage. now ltva did not model the plan, despite the fact that we requested that numerous plans. they plan flows are equivalent to 15% increase in demand. this suggests that at 209mgd demand which is higher than the

10-year financial plan and 15% less than the 240 model, we can assume the same outcome as i said with the plan in place. and that's for the 8.5 year design drought. this is an opportunity to void unnecessary expensive projects in the future. but you need to address the length of the design drought soon in order to make wise investments. thank you. >> thank you for your comments. madam secretary, another caller has joined the queue. next caller, you have two minutes. >> speaker: can you hear me now? >> yes, loud and clear. >> speaker: great, david, sorry, i missed the last few meetings and i was delayed due to the board of supervisors

meeting earlier, sorry i did not hear the presentation but i have reviewed the slide and i appreciate the staff work on this. i may have more comments on other items and comments that i can share with staff in the next few days. but i was generally pleased and although i was concerned last year with having an unfunded plan to address the plan issues including project delivery and capacity and various other things has been good. and well used. and i would note that this is probably my, you know, something like 30-50 budget on and off. i don't know if that gives me

some seniority but i'm familiar with the pc budget. thank you for listening and that's my public comment on this item, i appreciate it. >> thank you for your comments, there are no more on the queue. >> thank you for your comment. item number 3 is closed. >> colleagues if there are no more comments, if you can please read the next item. >> next item is item 4, capital plan. >> steve assistant manager for water. if i can have the slides please. i'm going to speak about the water plan and one thing to speak about it, two component

one is local plan for our retail customers. and then the regional plan. in affect, what i'm dealing with here is three capital plans, local and regional and hetchy water. just a little bit of background, as i like to present in the water system, again it's a very large and old water system in california. it's anchored by 8 reservoirs. we have about 1.8 customers outside of san francisco is and they're represented here in this diagram. san francisco is on it, as well, for the regional san

francisco is just another customer. so you have this large fish hook. this is the system's schematic that we often use. so it shows our major storage and treatment and transition facility throughout the system. what we're going to talk about in this part here about the water enterprise is to the left side of that on the hetchy side. we'll talk about the right side of this die dram. --diagram. but also on the fault lines we have to deal with. so a lot of our capital planning has to take into account those concerns. and lastly as far as background, where the level of service goals that were adopted.

and they were really a big push in the program and i think we're, representing a major mild stone trying to be clear. it's one thing to say we delivered water, what does that mean? in those level of service goals, we got into it. and not to beat a dead horse, that means delivery reliability and cost of supply and deliverness is all the things and serves as the basis in terms of how the capital plan are developed. these are the level of service that we're trying to achieve.

has has been talked about, we emphasized spending down balans how they come about, there is various factors there, the fact that they're there is something that we dealt with is how do we make sure, we dealt with a a little bit last year. last year's request was relatively small as well. so it's been a priority the last two years and trying to make sure that we get that more under control. and this year, we did work with infrastructure staff on deliver ability of coming through the projects several times to verify spending ability. some of that is in the enterprise and a lot of spending. that's when managers need to ask the hard question, this is a great plan but will we have a contracts and plans in place? and we need to ask those

continually. and we have prioritized by making various costs. there is no doubt about it, it was not the prior plan was, you know, full of fluff,. but the cuts were necessary, we're not going to be able to spend that money so we had to get to a right level. this is the focus version of the water enterprise, 24 to 33, 10-year capital improvement, shows regional and local, total water and this is what i have to think about regional and local, each one about the same size, they're about 1.1 billion dollars so that's the amount of spending that it takes in the san francisco system as well as

in the regional system for a total of 2.2 billion dollars. as we talked about there is a higher level of spending and that's because we have some very big project that i'll highlight. one of the project that you do when you have a cip, there are certain levels of spending that you can spread out overtime. we have significant proj thaekts have to scue our resources and pay, one of the challenge is how do we make that workout over a 10-year plan. but it's there, the expend tours are there and that is what the plan represents and how we think we should deal with that.

this is the teague plan, water supply and storage, water sheds and land management, communication and buildings and grounds and long term permit issues. those are the categories that show up in your plan and this part of the package, i presume my favorite document, the 11 by 14 spreadsheet that really layout this in great detail and that's what i go back to and see where we are. but in this shortened version, i would like to point out a few lines. first is a water treatment program, you see in two years. there is about, you know, 250 million dollars worth of spending those are in particular project that we'll bring up later as we get to the detail there. that's a big deal there. and in water transmission, year is 25 through 28, we have a

higher than normal spending plan, that is for some major transmission work that we have to do on the peninsula that is part of the program. the water supply and storage program, there is some damned projects there and alternative water supplies and i'll talk about the alternative water supplies later because we did make significant cuts in what was in the plan but what was in the plan, was more placement holders. as we did move over here, as, we have a plan due to the commission due july first. but how we should proceed with our alternative water supplies, and at that time you'll be looking at the commission to look at decisions about how we go forward with that program that may have budget implications next year where woel have to do prioritizing. that's a hint for everybody's

staff and commission included that, you know, each year you always have to deal with the issue, you cannot do it once and say, we have done the prioritization we're done. and then lastly the building lines, which is three up from the bottom. you sigh in 27 and 28, spending. now i'm going to turn to the two-year program. and that's where you see the 21-22 budget. the budget was less, it was 47 billion dollars but then you see it jumps up significantly in 23-24 to 180 million and that is driven by the water treatment program, that's where the big money is. those are projects at the old

treatment plan area that i'll talk about later on. that's where one of those large projects can scue what the budget looked like. so if you didn't have that project or assumed that it was smaller that bottom line number would be more in line with what the prior numbers were. looking at the local program, this is how the local program is broken up, it's a little different. system mon soger and control, local tank sxz res veer, ground water, recycled water, automated reading system and buildings and grounds improvements. and here, there are two things to point out. one is that second row the local water distribution system, that is the single biggest number here.

a lot is our water plain preplacement program, which constitutes, almost 70% of the local program is in our main replacement program. that's just, you know, a fact of life that we have to deal with. it's really on going program. that is never stop program into the future. but in fiscal 26, we have significant investments that will be going in project. that is another one of those very large projects that represents a challenge to fit into the program.

look at the 23-24 capital budget, 125 million. 22-23 drop down to 53 million and 23-24 it's bumped back to about 208 million. and you see in that in the 23-24 budget about 8 billion dollars is in the distribution system that is main replacement and lead service line replacement. those are very important project for us. again, that's that really squaouz the whole program right in that program area. the primary reductions were taken in two places in the water main replacement program. and regional water supply

programs. those are the two largest programs so they're represented, you know, significant areas where we can make some decisions and reduce those. on the local water main replacement, this is an going issue for us. we're in the process of revalueating what we determined in 2012. we're about to redo that so we have a better handle on that in the future. partly driven bit type of materials. we'll be revisiting that in the next couple of years, as a way to increase it or get along with investment. the second is on the water supplies, and as i mentioned we'll be presenting to the commission an alternative water supply plan.

this is a deliverable based on the resolution the commission adopted in 2017 calling for us to produce such a plan by july 1, 2023. and based on consideration of that plan, we'll make recommendations in next year's and following years budget processes. so it's, we maintained the fund thating we had proposed previously for the first three years but we caught it in the out years. and those were just placer numbers, they were not real, they were refined cost estimates. that's what we're going to do. and we need how that fits into the priorities going forward. we made other direction, other reductions spread through other program areas can they were really to keep anyone there from bearing too much of the burden. the two big ones were part of the water supplies. but i will submit that the

results is still a very rough program. i've had these conversations and people would say, you need to do this and do that and you need to do this and that. and i said if we do this and this and this, wouldn't that feel like good progress? and the answer is yes, i want to step back and say we may have produced things but the things that are going to get done are very important and includes a robust program. so now i'll get to some of the projects. this is ten-year cip funding which that is annual shot of it, the bottom of the treatment plan. the single biggest project is

addition of ozone treatment for dis ininfectant. and t*fs due to not having this treatment in place, and people, one of those things that people remember more than anything else, oh yeah, i remember when the water tasted really bad because i kept hearing that for years after. if people don't like the water, you have a bigger problem. relatively to other things, it's a very important one.

those collectively are in the next three years of the program. so that's a big investment that is a big part of our program on the regional side. on the regional side, we have various projects these were improvements looking to make both of those facilities but maybe even some stability issues. one of the things that i think we highlighted starting back in 2017 when they had the issue that caught a lot of attention there.

but there are older and there are things that need to be done. and there is a lost increased scrutiny on dam safety. these are the first of dam projects that we'll need to deal with down the road throughout the water system, just because that's they're old and they need attention and that's what we plan to give them. the cal vera looks like a teeny number and it is, but when we constructed the new replacement dam, we instructed it in a way that could be increased in size in the future. so that's a very large project down the road.

you'll see in the paragraph, an aerial shot, i think it was tim that took that photo. an operation which we didn't expect to be operating that soon but we did and it worked. we may be increasing in the future, we don't know and i think that's one of the water fly projects we need to talk about. figure project is the photo millbrey yard which is to the left of that. and on the right of that, is the outdoor supply and hardware formerly orchard supply and hardware which is on our property and we have a lease coming up for expiration very soon and we're looking at a

project that would have us taking over that area as well for part of our operation because we have new office and water quality lab here and you know, lab techniques and lab equipment and just lab facilities are something that take investment on a shorter time frame than other things because of the changes and technology. we're also adding, replacing some old shop facilities and consolidating our staff and we're looking to sell that property as part of this overall program. because we work better this way. the whole point is to show that they occur throughout the water system.

not just a project based on one particular place. emphasizing the large size of our system is an important thing to deal with. on the local front, we have three components that we're dealing with there. we have 420 million dollars over the ten years. we were trying to get to a mild replacement per year definitely. this represents half of that but it's something that we're going to keep after. lead component services is a big deal for us. you just approved at the last commission a contract that is going to help us move forward

on that. we removed all the lead from our system but there are some lingering place that's we have to deal with it as well. and our automated meter projects, we had the automated meter program that really went gang busters starting in 2012 but already ten years old. and again, we need to be revisiting that and replacing components. and the new cd city distribution headquarters. the upper left is a diagram of what the layout is there. the lower left largely parking so we'll be able to turn that into useable space. and to the right is headquarters which is very old facility.

we could not work on large vehicles because it was too small so we needed to have new shops for there and many other things. that's a big deal investment but i think that is fwg to be well worth for our folks there. so in conclusion, like i said i think the 10-year program is robust. while moving forward on significant projects. and i'll be happy to answer any questions. >> commissioner paulson, thank you. >> just a few questions, i should have interpreted you, on slide 34, in the year 26-27 under buildings and grounds, is that the marin?

would you say? >> 24 numbering does not work for me. >> according to us. >> what is title of the slide? >> slide 8. >> yeah, this is the regional program. this is the funding for the improvements. on the local side, which is a come of slides later, which is 146, that is 2000 investments. >> thank you.

>> can you give me an example of other reductions spread through different program areas? can you give me an example of three of those reductions that were made. >> sure. yeah, and i think they're all detailed in the budget property that is coming to you. but, one example is land acquisition funding which we have for our water sheds. sometimes we just accumulate money because, i mean, acquisition opportunities come across when you least expect them. so we cover a lot of that funding and say if it comes up, we'll deal with that in due time. as oppose today building up a fund. that is one example.

there is a treatment program that we're looking to look extremely low levels that show up so we want to get to zero. we may revisit that. >> that's one more. that's two. >> yeah. >> we're proposing to construct we're going to get that next year. but we also had another trail

connector as part of that and as a part of the water shed. and i suggest that we differ that because we'll be adding to the trail program in a big way. and we can afford to differ that a little bit while people take advantage of the new facilities. >> good. and so will not get done in the main replacement? we get phone alerts. >> we'll be reducing the number of miles as you see regularly. we do contracts for you know, sections in different parts of the city. we will still be maintaining the system but we'll be doing it through that route than replacement route. we also have part of that as

reserved funding for specific projects that are linked up with maoun' in terms of better market street is one of those. another is where we're going to be, the projects are going to be done because of the timeliness of getting this done is there. it's not that we'll continue to do projects, it's not like we're going to say, we're going to do this neighborhood and this neighborhood, we'll still have a generalization which we have which is looking at the projects most in need of attending earlier coupled with our on processes of what we'll do sooner. we'll be cutting back by about 50 replacement the amount of replacement that we'll do, at least the funding for, the

amount of mileage. even the 12 miles per year, we were not able to get to. this is i think, this is a big question for the commission overall which is how do we do the best kind of replacement program that we can. which i'm suggesting once we do the analysis that we did in 2012, we're replacing things. we know the really old ones that we have to replacement. we're projecting need to go replace some others that we need to replace. i guess my concern is that this is what people see and feel so we're cutting how we serve the people. and that concerns me, if we're raising rates and we're talking

about water and the main's break, that people feel that. that's very concerning, we're cutting it by 50%. i'm wondering if we thought as creatively, as we should, how we're looking at prioritizing and if there is anything that we can send out in your failer? about your main and what you're doing and letting people we're looking at it and thinking about it just to give some items of what is going on. >> and that's what we want to do is look at that how we can prioritize better and recognize those. we have about 260 miles in san francisco. it's not something that that will be more or less in your neighborhood but that we may reduce overall.

we want to revisit and we're going to restore into that in a larger way. >> i hope so, for me, it's a lot of water being wasted and people see it and people feel it and we're raising rates. and it does not seem like, an efficient utility, does it this way. it seems like we really need to revisit and think, especially things that affect people. it affects everybody, it's important to rethink all of that. >> understood. >> thank you.

>> ones the construction is included, what will be the disposition of current ccd head quarter facility? or are we going to sell it, tear it down repurpose it? >> that's a good question. we're not going to sell it, that's for sure. that property is too value for infrastructure point of view. we're looking at a couple of things currently, leading one to my mind is in the future, we'll be looking at large water recycling facility and where we put that in san francisco is a big question. so the old ccd yard is a leading candidate on where we would do that. that is something that we'll be talking about as part of the water supply plan moving forward, is where we fit that project in.

and the constraints that we have to deal with. and those are very real in san francisco. there is not a sizable parcels that you need for that kind of facility, just hanging around that out there. having that one that we have in our hand already is a very attractive option. >> thank you. >> excellent, i have a few questions for you. do you have a question, is this system having problems? i'm not showing up, i'll raise my hand. >> i'll pay attention. >> i'll go ahead. >> please. >> this may show up in your hetchy enterprise presentation, but i'm wondering if you can comment on back in ms. home's rentation slide 14 shows almost

a doubling in the capital budget in year 10. >> there is, you know, we can dig into that detail and get back to you. >> thank you. >> thank you, now i'll ask my question. i know we're identifying red zones, i'm hoping that's what we're doing. i'm would be i'm wondering if we're using these analytical tools to see if we can identify

leaks in different parts of the system. like all of this conversation about robots that goes into the pipeline and identifies different issues in the system. any investment that can help us faster identify place that's need to be replaces. i do appreciate coordinating to make sure that we're taking advantage of the road that is open. i'm also trying to see if we're using any of these new technology to help us. >> yes we are. i just saw a draft was being created for that. that is where we address any of those--we're looking at

different technologies to better predict. >> perfect. >> so we're not letting us reduce, we're trying to be smarter in the way we're spending the money. i think that's the goal here. >> right. >> the next thing i want to ask you, you mentioned on ami program, and since we start today install since 2012, right. the park meters just to not use abbreviation. you know, you and i have had this conversation but i want today ask again. do we have, i talked to a few people around the city and people, maybe they don't have a smart meter but they don't interact with that information to track how much water they're using or doing, i'm wondering if we're looking into building some analytical tools that can

help us to communicate with our customers a little more actively on, you know, your water use went up, went down, your potentially had a leak, things that can help them be more engaged with us. and to your point, the only remember us when the taste goes wrong or when the water is not running. for them to remember us every day, that we're working for them, we are working on issues related to their, you know, system reliability and access. so just, you know, a long winded question to ask are we looking into something. >> we've that's progressed overtime, can we do more. we're constantly looking at way that's we can communicate with our customers.

>> okay, i just want to make sure that we do make enough investments on those unhung heroes of data analytics and technological pieces that are not ribbon cutting style of investment, they're, they're so important in many ways. i appreciate that. one of the things that we have a long list of supplies. is one thing that is not actively accounted in there, and correct me if i'm wrong, we don't do demand management on the alternative water supply for regional programs, because if we go and say, we'll work with different communities that we have contracts with, and try to, improve their efficiency in their system, or you know, promote unsized system or

anything, that does not change the way we're obligated towards that community, is that correct? >> that's correct. >> so i'm wondering, if there is a way to have this conversation a little bit more actively to see how we can actually add that as part of our partnership with laska and wholesale water agencies that we're working. partly because it's the best invetment that we can make. we want to make sure that there is certainly in how much water and the management is a big part of that. so this whole needs is hinged on where the demand is going and part of that is investment and demand management. it's a important for long term

strategy on what we're investing in. how much we're investing in and if there is a way to invest in those solutions as part of our collective water supply investment. ultimate decision rest in their hands. >> right, but if there is a possibility that may be something that we consider as part of our alternative that will help us as a region to become more reliable. >> if we're interested but they're the one that are in charge. >> we have to figure out how to work with those agencies. one last question, you mentioned if we move all of this staff to the millgray location, we may sell the land that--did i miss?

>> in burlingham. >> and later you mentioned we could keep the assets because they're valuable. is it that land is not valuable. >> it's very valuable for development, for us it's--we're looking to take back the retail in our property that makes more sense for us to use. >> and we know that there is interest in buying the land. >> sure. >> i know that area is quite popular, just want to make sure, you know. i want to make sure that we have lined up buyers. that's it for me. you have another question, go ahead. >> thank you, you mentioned making cuts that were very

painful in this but necessary. what are some of the long term effects of those cuts. how will the environment or community be affected? , there are a few places you can look for that without having some consequences, that's why we want to make sure that is clear that there are consequences to those in the future.

set the by the state, and ms. ankula expressed some concern that our assumption did not reflect the state goals. but as i recall, we're seeing a lot more recycling and reuse onsite, is that why these sales volume assumptions may not be as high? >> that's a small contribution to it. the reality is, the planning projections are very very aggressive, very ambitious, and so that's when we talk about the urban water management plan, we have to plan for that whole umbrella but when in the future will that occur?

and i think what they look like is the hard reality of where the economy is at right now and where it's likely to be. somewhere in the future, those things will converge because i don't see us doing that housing, it's just a matter of when. >> when, thank you. >> any other comments? if not, thank you mr. richie, can we have public comment, please. >> members of the public who wish to make two minutes of remote public comment on item number 4, the water enterprise budget and capital plan, please press star-3 to speak. do we have any members of the public present to provide any comment? ms. ankula. >> speaker: good morning, nicole again. couple of things, first, you'll

see that there are no comments, we'll be sending comments with specific questions. but the project and the plan, we absolutely support them. and repair, we need to maintain those. and don't assume that those are

not occurring in the local area. clearly there is a lot going on including large of amount of recycled water beyond what you you planned plan within the city as well. i can have that conversation but it's going to be a careful one. and then back to the demand projects, i think for discussion purposes, it's important to clarify retail versus wholesale, they're very different. when i think, the city of san francisco projects what is going to happen in the city, they may take a different approach in the agencies. our information is we go back and look 20 years in the past, population projections, they're spot on throughout the region. demands are different because things happen that we cannot anticipate like economic down turns, pandemics and things like that. >> thank you.

>> madam secretary, we have two callers on the queue. >> speaker: thank you, bureau is in a tough position because they work for unreasonable positions. the problem is still working from the mind set from the early 19 90s, following the 6-year drought of record. a lot has changed, the demand is much much lower, it was 293 going into the drought, but it's been less than 200 mgd for the past ten years. and then affective, they bring water supply over hydro power generation. on july 13, 2021, mr. richie

showed slides and reduced demand. the perception for the 76-77 drought was very similar to that of the 2021 drought, it was 39.14 inches in 76-77. but on june 10th, 1977, 3000 acre feet on june 10, 2021, we saved 274 acre feet. none of this was reflected in the water supply agreement in 2008, that assumed an 8.5. so these ultra conservative policies cost money. i have some examples but i think i'm about to run out of time. i just want to say the water

supply alternative is reimportant. you are looking at demands, that's 105,000 acre feet, assume 35,000 per acre feet. and i'm talking about millions a year. >> thank you, caller your time has expired. another caller has joined the queue. you have two minutes. >> speaker: dave from ri alto, i just want to say thank you for the education session here. i learned a ton. just one minor comment, ms. kula, represents us, so if there is an exception that she can have more than two minutes

in these discussions, that would be great. i don't know if you can do that. thank you for the excellent preparation and budget meeting, thanks. >> thank you for your comments. madam secretary and commissioners, there are no other callers on the queue wishing to be recognized. >> thank you, public comment and item number 4 is closed. one last comment before we move on, the more we invest in solution that's may not have customers at the end of it, the higher the rate is going to go. it's very important for us to be very strategic to make sure that we don't have a lot of infrastructure that may not have, you know, customer at the end of it and leave a lot of people behind with costs to recover. so just want to leave us with that.

and madam secretary, can you please read the next item. >> item 5, the hetchy enterprise budget and capital plan. >> again, steve richie assistant for water. slide please. it will go quickly because it's very repetitious, one of the three capital plans that we have to deal with. the same system schematic. and the water enterprise level of service goals apply to the system as well as the water locally and regionally. oops, wrong direction. again, capital plan on the hetchy side, very similar. one of the things here though is over the last several years, hetchy has been working on a mythology emphasizing likelihood of any given asset.

this is been a project under way like 6 years. and this year was ready for use, making the prioration process a lot more straightforward. so in the program, just at the top, there is some text that is something that always we need to remember, that all of our assets and projects and the hetchy system, classified as water, 100% funded and water funded and joint which is 45% power funded. so instead of the categories that we saw, the categories that we always see for hetch hetchy is water power and joint.

this one is a little bit more level than the others are. in terms of the 23-24 capital budget, again water infrastructure is looking at 49 million, powered infrastructure, there is no request there, 0. and the joint infrastructure on the water side is 16.7 million and 24 million on the power side. so that we have a decrease in the request from the hetchy side of the system at this time to move forward. and the prioritization results, they were taken in a manner that prioritized water delivery to the bay area and facilities that support the delivery of water consistent for the water first policy of the commission. does not mean that we don't

invest in power or joint. leaving what i still consider a robust of about 977 million. again the project here on moccison. we already invested through the last couple of years in the moccasin powerhouse. and kirkland another 38 million. investment in our powerhouses is good for our water supply because that's where the water flows through the facility but also good in terms of power

reliability. on the water transition front, life extension and entry project. this is a project that represents kind of that smart investment that you were talking about we're investing on how we can extend the life of the pipelines with various approaches we have in terms of technology there. we're focusing on where we can make fixes as oppose today wholesale pipeline replacement which would be much more replacement. and then the mountain tunnel improvement project which we're working on right now, that's gotten a fair amount of funding prior to this. but that funding will continue as we finish the project in the lower picture, coming off the foothill tunnel but in the right, new added which is a tunnel to get into the tunnel and actually very, interestingly in the last couple of days, we broke

through to the mountain tunnel which is shut down currently which we're happy about that. moccasin and spill way, we had the march 2019, river event that showed us the weaknesses we had there. and the photo below refers to what i river to chocolate milk, which still looks like chocolate milk to me which stretched the facility. so we completed short-term but we have a long term improvement ahead of us for compliance with dsot regulations. and then, oshanasi dam, this was in 2018 which was a great year for water, i put in there that kind of looks like this year. it was raised in 38 our outlet,

project is well under way but needs some additional funding but the outlet phase work two is valve replacement. many of the valves that were r in oshanisy why built into the dam in 2003. --19 03, they need replacement and we cannot just rip them out. it's going to be interesting to put new valves in there. and we can get into the details another time but it's a very timely project. and here, again on the right hand side, this is where the blue dots show up. it's nothing just in one place but we have to invest in all the different parts. so similar to water, we think

this is a pretty robust program, the things that we're going to try to accomplish are going to be important things for us to accomplish. means to spending down balances while moving forward. and i'm happy to answer any questions. >> thank you, excellent. commissioner maxwell. >> thank you, i think i'm a geek about in stuff, i really love hearing about the valve. so i want to know what we're going to do with the ones that were built in and what we're going to do with that. can you give me a list, maybe, thank you. could you give me a list of 5 projects that will not be done totaling the 377 million dollars. what will not be done and how will it affect community and environment? >> well, one that i can bring to off the top of my head is the cherry dam spill way. that is spill way needs work.

we're going to, you know, start the initial work for partial replacement for that spill way. but not entire length, it was a spill way that was intended to be concrete and they didn't pour the concrete. so we're looking at a way to at least pave the first part so we can keep water from potentially eroding the dam until that is one project in there. early in take dam, is something that it's a very small dam in the system, a diversion dam. that is, you know, that's particular, unique problem with that dam that we have to address. but again, it's not big enough in the system to make that much of a difference. >> what's the unique system. >> what is the problem. >> there is a reaction occurring in the aggregate that

in the concrete that causes it to expand and break and affects the ability. it's a big dam and used for specific diversions which we don't need on a routine basis. we will deal with that but it's not higher priority. >> that's two. >> yes, and kirkwood powerhouse rehabilitation. there is additional work that we would like to do but we don't think that represents a big risk to the system as the powerhouse work and the other projects that we've talked about. and then there is a switch out,

and move it out there. we have some control facilities that we need to upgrade there. we've actually done some upgrades to that yard but we're going to differ the final upgrades to make it as reliable as we would like it. but we think that we can live with the reliability that we have right now for several years. the moccasin improvements, the yard we talked about the facilities projects here. moccasin is no different. we're going to be redoing some building as part of the program. we did a major improvement back on 2017 in the yard for some of the facilities. we're just differing the rest of the yard improvement down the road. that's something that we've been working on for a while and i would like to continue to pay attention to. we have limited resources.

we got the worse of it, taken care of. >> that's five. >> that's okay. >> there will be a report coming to you, as part of the packaging materials for their regular meeting where the budget will be adopted that will list each of these projects in details so you can read about what was prioritized and the consequences. >> i really really appreciate and i appreciate hearing why. it's so important, because so often, you hear 377 million dollars, you think oh my god, the environment and people. i hope we get this information sooner than we got this packet, because if you're telling us we're going to be looking at things and making decisions, we have the meeting. we have to look at that packet as well. this was very difficult. so i hope we get it sooner rather than later. thank you. thank you, mr. richie. much appreciated.

>> any other comments? thank you, mr. richie. very similar to commissioner maxwell i'm always concerned, are we leaving anything behind? or is this something that we can pickup later? because also the cost of building things and doing things. >> always goes up. >> always goes up, so that's always a question, to see, what are we leaving behind? or is it strategic to leave it behind. thank you for your presentation. can we have public comment, please. >> members of the public, who wish to make two minutes remote comment on the hetch hetchy water and budget plan, please raise your hand to speak. do we have any.

ms. sancula, bosk, ceo. i support the hetch hetchy project. my next question, and i'm not sure, i don't know it fits in the capital plan but maybe something can be addressed later. i've been giving thought of involuntary tee agreements. and there is not just the water cost but also a qunl cost to it for your share of improvement, i'm not sure where that fits in but i wanted to make that question, that is something that boska strongly supports. thank you very much. >> thank you. any callers? >> madam secretary, we have one person on the queue with their

hand raised. caller, go ahead, you have two minutes. >> speaker: can you hear me now? >> loud and clear. >> speaker: great, dave, i tried to raise my hand on the last item but i guess, my hand had already been cleared, whatever, anyway my comments were about comment 4 and then i have a brief reference on item 5. on item 4, i was not clear about the future use of the nucam and road balance so i appreciate the question whether those properties are sold o or used for further purposes i assume and believe that the revenues from that would benefit the rate payers and everybody for the property. it, it would be helpful if all

of the charts had consistent project names, some vary so it's a little hard to follow. and the group on the water program and project title on the presentation slide. on local water main replacement, that was i think one of the very significant legacies of ed hearington was to increase the replacement program when he was general manager. i don't see mileage as being the important factor, i would use condition assessment and risk and not just based on age at the factor for that. on water conservation following the discussion several months ago, about the clean power resource, i would highlight the time shifting water use and i can comment on that another

time and item 5, i love slide 12 with dam on the fog, great photograph. thanks for listening. >> thank you for your comments. madam secretary, commissioners, there are no other callers with their hand raised. >> thank you, public. item 5 is closed. >> thank you, so just want to reiterate what ms. sancula said, we should think about how our future obligations are going to impact our capital plan, so i appreciate the comment. if there are no more comments, madam secretary, can you please read the next item. >> next item is item number 6, waste water and capital plan.

>> very good, can we have the slide please. norm, i'm the manager for the waste water enterprise. so the waste capital program as you already heard makes up a pretty sizable chunk of the capital program. so we are, working diligently to address the same imperative so you've been discussing here today. primarily those are the issues of deliver ability, customer report ability and the emerging changes to the regulatory environment. so what we're really hoping to leave here today as a minimum is that you understand, the why behind the different decision that's we have made that you'll see through this presentation. and the what and the how going forward. next slide please.

thank you, i'll get this separate here. how about that, we'll talk about about the capital planning process, which you'll find similar to what you heard the water enterprise. we'll talk about the finances and that next to the last bullet of the prioritization process and the trade offs, which i think you can see from the prior questions and comments, that's a big area where we're considering decision trade offs with our decision making. we're starting with what are the key drivers. operational reliability, just what it sounds like, do they do what they plan to do. good example is the head works project and r & r project.

seismic has been driving a big chunk of our resent spend anding also covers a fairly sizable chunk of our future spending as well. that's a big big part of our ssip and health and safety and security just what it sounds like and lastly storm water management. some of the earlier comments that have been made that you don't see, is explicit recognition of the quantitative climate change so for the moment, sort of think storm water management as a proxy for those types of drivers on the capital program. okay, we really like to emphasize this slide, because they think, first of all, responsive to what we heard from the commission so the far

left side of that, this is basically a cycle, it's a presented here as a linear process but it's a continual cycle. we spent most of our time here on budgeting on that first, that first area. what are we going to invest the money? and we spent a little bit of time in project delivery in terms of contracts and so forth. but then the last two areas, start up in commissioning and the lifecycle and maintenance is where we're really trying to incorporate this in our decision making about the capital program. so getting this process right is what ensures that the investments we're making give the rate pair the maximum lifecycle. so a lot of what is on that right hand side that is sometimes off the radar is what helps drive the value over 20 or 30 years of that investment.

and if you're looking for levers that we control as an agency, you would be hard to press to find high value return because of those things that it helps support. so you've seen this many many times. to one that increases our steady state investment. and left sides merges our capital program into a single more unified program versus how it's been structured in the past. and we're very much in the middle of this transition over the last several years. so our planning horizon, same as the others, this should start to look pretty familiar. we have a two-year commission.

we have a rolling 10-year capital plan. and then we trief to be looking towards that 10-year horizon. it's where we're saying how much it costs and what needs to be done. and the areas to the far right, of course are the challenging ones. they're on the horizon, coming our way and when and how fast they're going to hit is uncertain. so how issues move from the far right to the middle area is something that we're really addressing right now because i think one of the best examples is the climate change impacts. they've seem a long way away when horizon is here in many different impacts that we're seeing. so this is a real challenge for us. so for waste water, on the

deliver ability front, we've been huge proponents on this. actually before this formal process started. you heard all this before in past presentations, we were struggling to observe the pace. how well were the facility getting landed and how well were we staffing them, et cetera. it has not been about the money for a long time but the deliver ability in that sense.

so this is the 10-year

appropriations pattern. and the big take away is here, are you know, closed to i think 60% of or so of spending in the first several years. and that has worked out under way. so it's really committed to, it's a hard thing for to us change that direction. so most of that is the biosolids projects and/or the other projects that are in construction right now. and then the blew that you see is somewhat non negotiating that is associated with the pipeline projects that we're doing with the state. so it's not much about the left hand side. >> sir. >> please, go ahead. >> there is a request that you explain what is bdfp. >> sorry, i avoid acronyms, the biosolids project. thank you.

two things are notable when you get to the right, you realize the swings in the pace of the program. and secondly, the vas majority of the money that we're spending in the out years is for the gravity sewer assets. that's not a bad thing, it's just what it is. that is what we call our large and small diameter assets. you can look and say are the reductions good or bad? they're really neither. the challenges that we see here is the fluctuating pace that we talked about before. and the fact that we're probably leaving some on the table we're dipping down below our capacity. it is a forecast, it will change like every forecast. >> quick, ask again, can you go back cao, can you?

>> the clean up and abatement order, that's the 2021, we signed with the state that commits us to the three flood resiliency projects. okay, let's see. this is details of what you just saw on the prior one for the first year, shows you where the money is going. collection system just what it sounds like. most of that, 43 million is for the early stages of the full 17 projects that is starting to move towards implementation and then it gets smaller from there. the one thing i'll point out is the large on power, is the

treasure island, recovery facility, it's now being delivered through a design built contract. so the point is the price certainly which has been a variable in the past, is locked in because the contract has been issued. so there is not a lot of volume tiblt with those figures any longer. this is an attempt to give you the big picture of all the appropriation that's we either already have, that are affiliated with the 10-year program or that we can anticipate with the project that we already have but they may be programmed beyond the 10-year horizon. again, by any measure it's still a substantial capital project program. we're starting out with a, 800,

just under a billion dollars of existing appropriations, adding just under 7 billion through the 10 years. and then the 4.9 pardon me, i miss spoke, the 4.9 is what is appropriated in the next 10 years. and small portion falls outside of the 4 years. but there are projects that we have identified. that gives you a bigger picture on that. how did we make the decisions that brought us down from the 5.9 to 4.9 billion dollars 10-year appropriations picture? that's what we want to talk about that next. this graph shows you where the changes occured. and similar, if you look at the left-hand side, you don't see much change. that's the biosolids, it's the pipeline for the clean up and abatement so you don't see much change.

if you look to the right, you'll see a big area of change, one is green which is new projects and one is the reddish grass hat which r & r which is small and large diameter program. so the changes to the new projects, primarily done through essentially reprogramming, meaning we've moved them out of the current 10-year horizon. the need has not gone away but we have decided on a prioritization basis, those can wait. some example seismic but we have made a decision to move them out. and then on the prafity, this is a bit of a, i don't know want to call t the appearance and the change is bigger than

the practicality? >> what line? >> the fwrafity sewer, r & r. that has changed but keep in mind, what we did two years ago, was we brought in that program into r & r, we brought the large diameter, wok under what we now call r & r. so when we were in front of you, that number had taken a big jump. what happened now, through this, this iteration has we have reduced the targets for that program and also made substantial changes to the small diameter in terms of how it's going to be delivered. so, i'll touch on this in just a moment when you look at some of the factors behind the decisions. but this gives you the big picture of what changed. this is one most focused on the risk and trade offs.

if you start off with treatment plans, the really biggest number there that we moved have to do with some of the seismic stability project such as the ocean side treatment plan. single biggest driver there is we moved the what we call the channel force main, some of the anticipated reinvestment in that. again we moved it out. on gravity sewers, we talked about those. the changes there. now what we want to focus are these changes we want to make,

what can we do to mitigate for the risk? some don't have much risk. there may be an opportunity cost. but if we talk about moving out, the channel force main, that is a 1970s that moves the waste water in dry weather. there are things that we think that we can do and say, if we're going to put off the major reinvetment can we do things to be able to anticipate emergencies or make sure that it's being maintained in the best possible condition? those are the areas that we want to focus going forward, how do we mitigate any risk that comes from these decisions. big picture, one, is it is all things being equal, it's

pushing us back towards a peaks and values spending pattern, we're working to move to a smoother one but there is only so many we can do. regulatory alignment has been discussed. we know there are regulatory obligations including the reduction question, how do we observe the changes over the next decade is a question. and then safety and performance, always of paramount concern. we think that we can navigate that one by maintaining a robust of r & r investment and those have not taken a cut by the way. even if they're almost doubling over the next couple of years, they don't show up here. so we're not taking the ball off.

most are driven by things that are outside of that area. so real quick, all of these you should be familiar with from our periodic reports. the biosolids projects, the single biggest and the one that this is the project that is has really driven the resulting 10-year picture that we have in front of us right now. for good reason, when you take this together with head works, those two projects represent rebuilding 75% of the treatment plant. so you know, there is a reason the scale that there are. the r & r, the biggest chunk once we're past the current project. main thing that we want to share similar to what rithcie mentioned.

you heard the 15-mile project, almost for almost a decade. we have the assessment data to begin to assess whether or not that mileage needs to be maintained. partner with that, a shift, our goal is to move to approximately 75% trenchless construction. so, we anticipate some big offseting influences there, lower construction costs all things being equal. hopefully higher value to the project, we're making those decisions a little more smartly going forward. and then again two that you're familiar with, storm water improvement about 2 million dollars to bring it back to the current storm level of service.

it will be that work is obligated under the clean up and abatement order and has aggressive, it has a time line that we will strife to meet that requires delivery by 2028. and then the full, pardon, the lower project close to the same project about $300 million to bring that area up to the storm storm. and also obligated between the clean up and abatement order. and that is the end of my presentation, i'll be happy to answer any questions. >> thank you so much, commissioner maxwell. >> thank you. >> thank you for the presentation. so i guess my concern is when i look at storm water and flood and we just had an article in

the newspaper, i think it was january 25th about how great the bioswells did and especially the feature was john king. and the feature was none other than the southeast center. and certainly many other around the city about how great, how they worked. how other places were flooding but these worked the way they were suppose to. and other places, they were turning parking lot flooding. and these are people, so again my concern is when we look at our budget how affecting the environment and community and socially? this is a direct affect, you have young people that you're getting into looking at things differently. and it says parcel projects at lincoln high school, reservoir,

street escape project city wide, that's huge. differed flood resilience at ocean and western addiction, those are the people that are being affected and looking at things differently because we're looking at it differently and it works. and it works and it's a living thing. i'm concerned about that. and i look at things that we're to go and how it affects people, we're kind of, you know, putting that in the back burner with people directly, things that directly face people. so this is something that i'm really concerned about and i think we should reconsider. and then when i look at the, one of your slides, i all i can think about is i guess it's your appropriation capital plan, and how much of the yellow.

was that during the web corps? was any of that taken into consideration? all the issues that we had with web corps, millions and millions of dollars. is any of this, when you talk about deliver ability, are we looking at not only, how we project management? are we looking at all of those things, what are we going to do differently? what have we learned? >> i'll take the first question and i may ask for help on the second one. your points about the benefits and the value of green infrastructure is well taken and we're all in agreement. our agency has stepped up and made those investments and continue to go. those are hard choice.

so i don't think there is any disagreement about that. your points also commissioner about the, the public, the larger public value that can come from thoughtfully thought green infrastructure and we're in agreement and recognize that. we are doing a of things right. that is really important to keep in mind. the s m.o., to use the acronym. that was strategic harness the project building for almost a decade now and that will continue to do so. i will say this, on the partnered capital projects, we are getting better. so you're, i want to give you some examples. the numbers were too small to focus on. street mall is on there for example.

beau canesty small is going to go through some changes. when we saw the opportunity to partner with rec and park, we jumped on it and shifted our priorities so we can take care of both the, combined sewer underground asset in the area and work with rec and park to invest for that whole corridor. so, the partnerships is where it's at as we talked about. and we're not giving up on those. when we talk about the school projects that we're showing no specific funding available, we're not going to give up on those. meaning we'll continue to look to look for funding sources whether that's federal or state. we know that partnering is key. and this is something, the leadership, it's been a fair amount of time talking about more and more recently, which is how we get better at that,

both the planning of the facilities and the money, right. and that's not easy, it a big change for us. as an organization. but i just want to make sure that we're not walking away from any of that if we can find other way to see fund and resource those projects. >> let me say, i don't think you are. we were lead ner all of this. and but i think, i feel responsibility when i see things that directly affect people to bring it up and mention it. but it's not saying anything else. and i still think that we need to find partnership and do this. but in no way am i saying that we are not, i would never say that anyway. we're i'm in the p pc, i think we are, we are number 1 and i want to stay there. and i want our people to feel as we raise our rates that we can see and point this things constantly. >> if i might, just to give you

some reassurance. >> i'm reassured. >> i'm going to give you an example just because we identified project. two things, that does not, look at what we are doing globally in the city, on green infrastructure, we are the leading agencies working with the our partners and we're going to continue being that. as an example, last week in the planning committee, i went myself and we talked with our partner agencies about, our agencies taking the lead and work withing others, to promote building improvement and work modeling what is being done only the sea level, the sea wall on the east side to model that on the west side and to really invest and for us to take the lead coordinate with others throughout the city to push green infrastructure. so i want to you rest assure

that this is not a dimunition at all and we'll continue to be the leader, capital committee? >> well then, can you do this for me and probably the rest of us. as you go forward, could you tell us what is going on? and we need a report, we can do something on green infrastructure. for me this high school is important because their grandparents and kind reburrrates. >> very good.

that's a significant project for us now and a good investment back in the area. i think down to the question, that we have learned the lessons of more projects, morality na tiff delivery work. i mentionds before, people process and tools, having the right people with the right

experience project manager team on the treasure island project which is really good. and we're putting procedures and tools that we use to manage and track change which gives us better foresight and allows us to adjust whatever we can. we've taken a deep dive and we continue to learn because the contractor changes and the team change. >> well i think, as far as the deliver ability, but oubt accountability to go with deliverability? i would like more accountability on what you're doing. those work together. something that is accountability, they deliver. >> noted.

>> commissioner paulson. >> i see more chess pieces moving up and down on the grid and thank you for that piece. before i get into what i think is a general comment, i'm going to pile on in particular to have an update on which departments you're talking to. after four years people were saying, what is the hell is going on down here. there was told, a group that got together, that said, let's sit down.

to say, we got some pretty big ideas. so having a report on community partners and in particular, talking about the green pieces that might be a part of that. i remember one time seeing, you know, a place where there were ten schools where, you know, there was a lot of money maybe 50,000 maybe 2000, and they were all on hold. and you look as a commissioner, why the heck is it on hold? getting stuff done, takes longer and what is going to be the perfect storm water, people scream way, that is not happening. that being said, my comment was going to be we're in a certain type of budgetary a nam omy, we

have found out that newsom has billions to share and people, i want it and they spend it anything on the table, there is 900 people that are looking for part of that pie. now we have layoffs and talking about budget cuts and what have you. i read in the paper like everybody else, that the mayor said, i want every department to cut xy and z. i guess my long winded comment is going to be that in in particular cycle, it's amazing, especially with people screaming that we're not getting this done, we're not getting this done, that there are budgeting things that have happened and that is usually when people scream and yell, they don't understand. the infrastructure bill that got passed in congress this year was nobody thought that was going to happen.

they thought political paralysis was going there be there. but all of this money got funded in a major way which included a lot of green programs. and the fact that there has been so much money budgeted, whether or not it's debt finance or bond measures. that is a good thing, we've got in many ways in the big perspective money that is sitting in some whole barrel somewhere that we know that we already harvested a lot of funding getting this stuff done is the tougher part. and that's to see the analysis on what is on hold and what isn't is a really good analysis. we should never forget and folks, you know, both, great people and smart people and people that just like to throw bombs, we have a lot of political work both nationally and state wide and locally to

make sure that the fpuc is as well funded as there is and this exercise in particular, and that's why i'm thanking you, showing where we still need to be diligent. and believe me, i can tell that all commissioners that are here are you know, maybe even we're proud to be here, we're still going to have a lot of questions. but this was a good answer to know that we're well positioned to do the things that many cities can only dream of or try to suppress. thank you for your presentation, this is very thoughtful and i know there will be more updates as we move into the year. thank you. >> thank you. i just had another question, that is on safety. it says trade off and budget change and we see safety and p.m.s and people in hard hats. increase safety and service dis corruptions. >> correct. >> so can you speak to that?

>> sure, i think the key point there is, when we think of safety instructions, it shows up in two ways in treatment plans or unreliable systems and to a lesser agree with the collection systems, i don't want to diminish that, but they're very different safety provials. we're talking about our vertical facilities. and it's just what it sounds like. if we know that if you decrease investment in those facilities, particularly in the rehab and replacement and rehabilitation, the r & r area those are the strayed offs you start to see. so we're just flagging it as just one thing that we're paying attention to. and we're not at all, let me

crystal clear, the number one thing that we make we're funding for sure is identified safety or performance issues with existing systems. and that's been a basic part of our decision making framework for a number of years. so we flag but the commission should know that we're not taking improvement off the table. so i want to be clear on that. >> and actually, on a positive note in a sense, that's not where the big money tends to be. so we know that we can, share with you the numbers in the future. we're on a path to add 50% for the rr and work, the

rehabilitation work. you home depoterly realize that they're on the slides, so we don't need to reduce there. and because of the deliverability consideration, wub take aways was just that. when you look at the critical area of need like ocean side and north point, we're not constraint about the budget but working to improve the deliverability to move those projects. so that part is not subject to budget reductions right now. >> thank you. >> excellent. >> do you have a comment? >> couple of questions, i think we i appreciate the comment on the green infrastructure that was on my list so i'm not going to go back but i want to make sure that i reiterate that that's an important that we

should not shy away from. you mentioned, city wide, that's a great opportunity but i appreciate the conversation of the partnerships and trying to do multi benefit projects as we can. after that, i think couple of questions i have for you going back to maybe this is for of a regulartory uncertainty and what will come down like the emerging concerns. how are we going to manage those? those are conferrings, we have no regulations but i would expect in the next ten years, sim tar to pfaf, it's a thing that we have to manage. i want you to give me an

opportunity to kind of, start thinking about those because they're coming we cannot avoid them and put some thinking as you're building new projects how will ha help. >> very good. >> and on top of that, i would add dry management from recycling. our flows are reducing a as people are using less water. but we're doing more recycling which means that we have to manage the f-1 which requires totally different kind of management. and again, another piece of this issue to think about. so, so those are the two things. i don't know if you want to answer those or you want to comment. >> quick comment, maybe one. on constituent on emerging concern, wes, we're following that really closely as you know. and the industry meaning, the waste water and utility

industry is really pushing the legislative path for more up stream responsibilities for the generators of those constituents. and we do have several staff that primarily through our biosolids program that's where we though up, is when your biosolids, product which in many ways, that's why you look at bans that we're working hard to avoid. point there, is we have people paying close attention to it and keeping an eye on it. particle, remind me the second. >> deploy management. >> thank you, that's right in front of us. we've had to work out those issues from permitting permitting already in terms of that line. i'll say that, for that

facility, we have that picture pretty clear. as you go beyond that facility to you know, other, other recycle water regeneration or water reuse, the question is one that we're going to keep on the table. >> fantastic. i think, you also mentioned about some of the different investments that you're talking about. especially, on we don't need to think about this slide but the slide that had two bars, for example, you are reevaluating new projects. i know you didn't mention that, i would like to sort of, challenge us to go back when we can to design table and rethink whether the design criteria that we're considering as we're dealing with a lot, you brought up first slide, impacts of climate change and all the regulations that are coming

down. base water is an interesting part of this, you're impacted from both sides. they're much much more environmental impacts and it's impacting what comes into your system. so it's very much many of it, obvious preference in the management. rethinking is important. so if we can i would like to take this opportunity to say, if you're spending a dollar, is that going to help us manage storm water better? do we need to kind of think about other kind of solutions that needs to be at the table to help us manage the system better? >> okay. >> and then i put down, that was the comment commissioner maxwell made. and on the slide 11 where you mentioned, maybe we have the

all the bars and you have all the projects. one thing that is important is one side at the capital cost, by 2027-28, the numbers come down.

>> the point to the responsibility and accountability to the big things that we have to get right. i'll just say we hear you loud and clear. and the impacts to the waste water enterprise financials, one big thing get it right, that's what is baked into the

10-year right now. it's a challenging set of constraints as you heard earlier, we have 9% rate increased which are taking us up there. you can see that in the capital project, we're going to a modest spending pace. and we're going to have to use each of these, cyclical planning conversations like we're having today to continue to fine tune what the end of the picture looks like. as noted earlier, we said this, there are things that we had to move off the tenure, it's a challenging set of dynamics. and it means that we make the best decisions to be clear on the priorities and rate benefits and what have you. but consistency is key.

and one thing last, commissioner, you mentioned the importance of storm water and management and rate. i think you're aware, we're coming back in the very near future with a new rates. but for waste water, the biggest change if it goes through, is not so much the percentage changes it's going to be the cost center reallocations that removing the cost to service calculations, more toward the storm water side. so the dynamic that you were referring to earlier, we were focused on those for a number of years and others. and that is, probably one of the single most important moves that we'll be able to make to address the issues that you're talking about. where you live not where it's easy to capture, so stay tuned on that one. >> i appreciate be that.

the only last comment, we need to move it from being this big massive streamliner ship that is very hard to move and become faster and more agile using the industry's buzz ward. just because that's what is required of us. and that's what is coming at us. i appreciate your comment of going back to the table and, you'll have a comment, go ahead please. >> i thank you. i really appreciate this presentation. i wanted to emphasize what commissioner maxwell and president ajami said, that the green infrastructure, the storm water collection seemed like really important projects and priorities for the puc. i also heard you mention that there are other funding sources and i think it's also really

important for us to think about what are some of the these funding sources. if a project is not uniquely attributable or benefit to rate payers but more justly shared on a broader social level. and i think about the importance of all the environmental work that we do, whether it's the river or the bay or within the city to really think about alternative sources. and i know you're already doing that and you're getting state and federal money, whether a general obligation bond may be appropriate for some of our bigger projects that benefit the city more generally or the public, the region more generally. i just, i don't want to lose

sight of some of those bigger projects but it's important to pay attention to the rate pair. i think what is reasonable to share on a broader basis and where that funding may come from for us. i appreciate that you're look at that already. >> we are, and i think we're seeing the same things, if you talked to our colleagues at mta or rec and park and other cities. what is really emerging is again, like we mentioned, the emphasize on finding way to deliver our projects that covers as many benefits as possible. and the flip side of that is to your point of outside federal funding or state funding, the better we are at the first, the better we'll be at the second. because most give priority these days to those approaches that have really demonstrated

collaboration and planning across the departments or public benefit areas. and then, some of your funding constraints also get relaxed a little bit. so for example, on the last infrastructure bill, well there is a lot of money for transportation. well this may be true, but if you're partnered that can bring money to the table and you're doing storm water management, for example, maybe it's not a bad thing that there is money in the transportation bucket. but if you've got that blinders on, you're not going to see that opportunity. i think it's going to take us a little bit of change and our thinking to get there. we're headed there. >> thank you, i appreciate that. >> and in your point, there was a segment that i talked about storm water management. okay, so couple of housekeeping items before we go to public

comment, if you don't mind. we are going to take public comment and i have asked if everybody will be stay a little longer. we'll take a quick break and come back to go to power presentation, if that's okay with everyone? okay. perfect, thank you. public comment please. >> members of the public who wish to make two minutes of remote public comment on item number 6, please press star-3 to raise your hand to speak. do we have any members to provide comment on item 6? do we have any moderaters. >> we do one caller with their hand raised. caller, go ahead. >> speaker: can you hear me now? >> yes, go ahead. >> speaker: dave, so on item 6. several comments on treasure island, i am not clear if all

rate pairs are paying for the treatment plant improvement and what not on treasure island or only the treasure island developer or current or future residents, will be nice to know that. on the slide 16, the things that were differed in and addressed to chop out a billion dollars, i think many of these investments will come out in the future and i hope that we're differing them and not abandoning them because frankly they all seem important on various degrees. on sewer and replacement, just as i said earlier about water. i would use continue assessment and risk and not just age as a basis for sewer rehab. similar to my comments about water and real, i'm unclear about the future about the southside of the southeast plant real estate once the new

digesters are in place. i think that's a big property, big discussion maybe that's the better site for what steve was talking about, that's about a bigger site than the new location. and i hope that we're working to get out of the day view plaza, at least it just kills me that we're continuing to base the plaza for offices. in general, and i'll just wrap this up on real estate, i asked many times for inter departmental review on on sector, east of 101 and caesar chavez including the nucoam and district and college district and post office, there is really a need about that. thanks for listening. >> thank you for your comment.

madam secretary, commissioner there are no other callers wishing to be recognized. >> thank you, public comment on item 6 is closed. >> excellent, so we'll take a quick break. we'll be back by 1:35. perfect. >> thank you.

>> and operating and capital needs, so you'll see two distinct capital plans in your packet that i'll be reviewing. the first power was adopted in 2020, so it's very new. and has been balanced. the history for the hetchy capital plan is decades longer and has been, more challenging to balance. so with that, let's bring this slide, there they are up. and let's move on. to hetchy first. so you see here, are 595.510-year capital plan that's transmission and distribution. you see, jump from the fiscal year 23-24 numbers there. it's a future years, that's because we concentrated on

spending down previously appropriate ated funds as has been discussed today. the next area you'll see here, is the clean power plan. 73 million over the ten years. there is a big bump in the outer years, that'ses because when we signed power purchase agreements that gets constructed at our request, those agreements include provisions for us to buy out the project and take over ownership and operation. that's where we have to do that with the budget that we signed up early in the program and here's the summary concentrated on the request. a mix of revenue revenue sxz restricted mix ref oohs. for hetchy, the funds are from things like our lease payment for the use of our streetlights by the en at the na system

folks. carbon reduction, that renew our efficiency program. on the clean power restricted use funds are from public works charges and collected by pgne but distributed by the state of california for our participation in the disadvantage communities solar programs and i'll talk about that a little bit later. and then customer revenues are what funds the balance of the program. and like, like greg and steve both mentioned, we've made tough choices but prudent choices to arrive at the two capital plans. we reevaluated plan focused on where unrestricted revenue are spent.

we made cuts, we retained funding for city priorities like public power expansion, decarbonization and housing. and you know, we will repeat this prioritization exercise again with the next budget cycle. that effort will be informed by some work under way today, our strategic distribution investment planning. and that is going to get president ajami, git the question are we spending on the right thing? that will inform next cycle and our hetchy expenditures is set by the customer for many of these projects. we're evaluating their pace and where we need to come in.

and then the revenue potential is what we consider. we up tated our existing request by asking ourselves a series of questions, you know, looking at the remaining budget from prior years, is it sufficient, understanding the phase are we at a point where the project priority can be reasonably evaluated. sometimes it's early enough where you can see, let's scale back. do we have the resources in place for the project, and staffing and contract requirement for successful project delivery and once the project is delivered are we prepared to assume the responsibilities? do we need to slow down the development? so the programs and funding levels that i'm sharing with you today are a result of that

exercise asking that question of ourselves. we had very little to adjust in making adjustments to the plan. the plan was balanced. adding new project, community green chair and disadvantage green chair of. these are projects, you know for us they were pretty easy to add because they were funded from outside sources. they assign with our affordability objective so they're good fit and we want to bring the benefits of good fits which is the san pebble project. to low income in san francisco disadvantaged communities. the project that you see here has been thrivinger power to the program since 2019.

on the hetchy side, it's more challenging. the approved capital plan was out of balance by 104.4 million dollars. cuts and resources were needed. we had to be strategic about our cuts. and as i mejsed, some funds that had restricted use, so reallocating or cutting those areas really does not help us. so we maintained funding for projects that are approved and prioritized in the hetchy power plants. projects like the transmission and distribution project that you see pictured here, which was just energized next week. and power crews are connecting the first customers today. that's the new ucsf garage and clinic in mission bay. so that was the process now for the results.

first up is our redevelopment program. we had no new funds, we'll continue on the projects. these are projects like hunters point redevelopment, pictured at the bottom there and that is connecting alice griffin housing. connecting treasurer boona island. projects account for much of the growth. financial, plan, the growth and we have. distribution prm where we're requesting 8.4 program. where they will improvement at our sites like san francisco

international airport sub station improvement that we're partner with the airport on. and other hetchy power retail connections. these costs are strongly influenced by the pg & e distribution. next up is our customer programs, we're not asking for any new funds. electric mobility, local renewables and building decarbonization. and these show example, heat pump water heaters and we do a water heater and the ev chargers that you see on the right are installed at the bristol new housing on treasure

island. under our ev charge sf program. and then next we have the public purpose programs. for these programs, we're asking 800,000. and what you see here on the left in the photo is our out reach materials, sf customers in our super green program and just staff and then on the right are staff meeting, with residents of affordable housing to sign up for the program, learn about bill savings and management. and the management is the public goods charge that i spoke about earlier. and you then come to our local renewable energy program, asking again 800,000. this is for the clean power sf capital plan and it will advance our efforts to buildup

solar like the one photographed here, at sunset. sunset reservoir. and this program is an important to our goal as part of the clean power vision. next up is distributed energy resources where we're asking 2 million. this will fund on going small renewables, energy efficiencies and building decarbonization for our hetch hetchy customers. like you see the solar installation. this is at marina school, it is one of 30 installations that we have installed over the years and it was just energized in january. this month, so more efforts along those lines and then our street lights, another important area is street and

pedestrian lighting. here we're requesting 2.3 million, towards repair and improvements. then we have our utility services, our power field crews were relocated from the rented from the port. the request for funds is to do some early planning and design work. so that we can get a new home for our utility field services crew. and final project is our power expansion effort. where we're asking for 7.6 million. you've seen reports but let me give a few highlights. we have our utilities commission where we're asking them to set a value on the assets.

we offer pg&e 2.3 they said the assets are not for sale and if they were, it would be too low value. we're also working with sf planning to complete the environmental impact analysis and compliance with the california environmental california quality act. and we're talking to the people about the project we've been working with the team to make sure that we know what it's up and to get their input on how they want us to proceed. thank you. >> thank you so much. commissioner maxwell. much for your presentation, you mentioned additional cuts, had

would you give me an example of what those cuts are. >> sure, we had the areas like redevelopment and grid connections that i talked about. we had some partial cuts in those areas. so for mission rock and hope sf, these are funded for the whole years of the program. but so much for the later phases, so cutting happened. and we'll be able to come back to say, okay, it's more mature, we know the timing and dollars. i would expect they come back into the plan for example. we also have cuts on things like, the idea to decarbonize, for the steam loop, they're fired by natural gas. that was a project that was identified in the action plan as right for decarbonization. that is something that we're

continue to go work for real estate services and looking at that option together with the owner of that facility. but not yet ready to put it in the plan. >> thank you, and you mentioned the roof top cellar, are you doing any storage? >> yes, battery storage and roof top solar. we don't have solar at sunset but we're looking at that for subsequent installations and college hill are the candidate roof. >> i noticed often, that treasure island is without power. >> yes. >> and one of the housing developments, i don't know whether it's one of probably, i don't know whether it's sunnydale or--it's sunnidale,

you talked about social justice or injustice. and here we are having these environmental issue having power with them. what are we doing about that? >> both, those systems that serve the electric infrastructure that serve those locations are not owned by us. so we have agreements where we serve like a contractor to them 'cause we have the skilled trades and the knowledge to perform the work. for the housing authority, you can think of it as a campus where they have a connection point to the pg&e graoud and anything from that housing authority property, those systems are owned by the housing authority. so actually, oops, if you put the slide back for me. what you see in this picture,

is a tree had fallen during the as an outage at the property. a tree had fallen with the road sign. we had distribution lines, we had to send out a crew when the power went out, i think this was at sunnidale. so we restored power, the power was taken out by the tree. typically, it's things like that before the housing authority. sometimes it's faulty equipment. i think there was a transformer outage. on treasure island, a little more complicated. there we have the old infrastructure that is managed by the development authority and we serve again like a contractor to them. they set the rates and everything for island services.

so, we bring to them proposed improvements. just like i'm standing before and talking about the capital improvement that we would suggest for the assets we own, we engage with the authority director and make recommendations for him and what he should include. so we don't have a direct role. >> is there a list of assets and/or management that we do? because i really never knew that, i thought, treasure island, but are there other contracts that we have? >> any housing authority. and so, those distributions systems are owned and maintain by pg&e.

because we all get the same alert. that means treasure island and ti and housing authority, and i thought it was alice griffith that went out. of that 100, i think it was 174

million over ten years of increase funds for development stuff. how is that? divide out? is that deeper in the book here? is the big hunk going to the giants development or housing authority? is there a break down? >> there is a break down in your book. alice, candlestick point, we're asking 23.4 million for that one. and then for the balance of the redevelopment projects, 141.6 million. that's the 10-year numbers. >> without getting deeper, this is tied into we get the alerts that the water went out at kitty cat and dog street, okay, delete. unless it's your kitty cat,

that being said when we see the treasure island and housing authority, frequently that connection does raise the flag and mention that previously. would i like to make sure that we are being diligent on our priorities to make sure under the communities are not being treated in my ways different than better funded private, pieces that we have to contract. i'm going to put that marker out. >> i appreciate that. as the housing authority properties are being redeveloped, they're getting fully new underground electric facilities, they're working with us, we will own the facility then, we'll no longer be in this odd contractor type of roll. we'll have, you will have more ability to oversee and enforce and hold us accountable for keeping the light on. >> and just, sometimes i'm

toasty on a holiday and doing quite well and all of a sudden, i get a click that treasure island went out again. that's not necessary laoet current development, that perspective, thank you. >> thank you. >> okay, so thank you so much. i have a question for you. maybe not on the same track but a little bit differently. i'm wondering, imagine all of this you know, we managed to convince pg&e to sell their assets to us. i'm just wondering, just think, you know, looking like whatever number of years, i'm being very positive, feeling good today. if you were to manage that, do we need to think about what needs to be done for us to have a well functioning system? i don't know if that's a

question that you can answer right now. but i'm just trying to plant a seed to say, it will be good for us to sit back and say, you know, if this happens, what does that exactly mean? and i know we don't have that the status of older assets and how, well they're functioning or not, or maybe we do, it will be good for us to anticipate what are the operation costs of something like that. if we end up being able to acquire, that's one thing. >> yes, and that work, some of that work has been done. and that work is being funded through the acquisition request. either we just did or about to go out with an rfp for additional support for those services to get it additional good utility practice advise on what to anticipate and how to

best organize ourselves internally at the puc not just in power but in the other bureaus as well. for example in it, all of that is part of the acquisition project that we're requesting funding for here and that work is under way. >> got it, that's good to know. i appreciate that. any other comments? go ahead, commissioner? >> i was looking at the trying to find the slide where you show the people, i think it was all of these people in yellow vest. >> if we can put the slides up. >> slide 17, utility field services. this one? >> yes, that one. >> that one, yes. >> what are we doing about the request you know, for the jobs and all of the things that we

were asking you all to do in regards to our contracts with our storage, other people that we're dealing with? we were asking about, actually san francisco values. >> in terms of recruitment? >> in terms of jobs and communities of color and how we're treating them and the jobs and all the other things that we wanted to put in contracts. >> oh put in the contracts. so we have, maybe are you better positioned for that one, steven? i can talk about what we're doing in the workforce. >> i'm talking about about the other agencies.

>> you're talking about, the--yes, you can have a seat, now i know what we're talking about. sorry, commissioners, i was not quite firing there. the community power, california community power jpa that we're working with. yes, i have made some modest behind the scenes progress in working with some of the members there to establish a workshop. so we're making some progress. i think the last time we talked about this topic, i identified that the jpa is going through a transition from part-time executive director to full-time executive. and once that full-time is in place, identified in the strategic planning conversation that this issue needs to be addressed.

this issue that we're contracting through them in a way that meets our objective and environmental justice. >> union folks. >> yes, yes. or project labor agreement. yes, so we're making a little bit of forward progress. >> as long as we're doing that. >> yes, it's on my list. >> follow-up on that cincinnati commissioner ajami had mentioned the work that is being done. what if the day comes that the grid is there to handle. and i know you've been doing a lot of work doing the what ifs. i have to make my marker down as commissioner maxwell mentioned in general, that is the folks maintaining and

dealing with that grid are well paid workers, working for currently pgne and if that changes, the relationship between the private developer and the city, that those workers are going to be able to you know, either continue to work on those jobs at minimum all the standards that they have, are not going to be diminished during any type of transition and that is something that is going to be very highly looked at when we come to that magic moment. i just want to put that marker down since it was brought up during this exercise. thank you. >> thank you. >> commissioner tracy. >> thank you, i just have a funding source question. the public purpose programs. i'm remember thating there was federal money and state money to help fund for some of the

customers who had a rearages during covid. do these programs have a federal or state funding as well? how do we pay for those? >> those are two separate pockets if you will. these charges appear in your restaurant utility electric bill. so in san francisco, for clean power sf customers, they pay a public goods charge on the bill. and it's separately delienated if you look at the small print. that creates a pile of dollars that is tracked by the california puc. and the california puc gives pg&e the authority to spend those dollars. in event, we applied to fund

our distributed, sorry our disadvantaged communities programs and they granted that request. >> but it's a charge that rate payers pay for? >> yes. and then the street light program. how is that funded? >> there is two funded sources. first is the revenue we received from the telecommunication carriers who lease the polls to attach antenna systems. you'll see these throughout the city, they're kind of rectangular. that's one source of revenue. once we exhaust those, then we spend tax payers dollars. so the funds are street light, maintenance system, it's one of our cost of doing business that is factored into the sets that

are set for hetch hetchy customers. >> thank you. >> so it's very unusual for a city to fund those street lights that way, some how that's how it was in san francisco. >> is that a good thing? >> well it's a general fund, it's typically general fund type of service. it's not typically considered a utility service. usually most cities fund it as a component of their public works program. it's in the public right away which street lights and pedestrian systems are in public right way with operated by the public works departments. >> and the reason i asked for those programs, i thought they may not be rate payer obligations. >> thank you. >> you're welcome. thank you for those answers, those were fantastic. one other thing i wanted to

mention is, you know, there is all of this investment coming down the pipelines through private investors who are very interested climate impacts and energy. so it's very difficult for us to take advantage of those. i think again anticipating what is coming down the poip line, it's good to think about what are the public partnerships that we can put in place that can help us to advance our climate strategy and energy strategy. that's one thing. >> thank you for that, i would say that's one of the things that we're discussing with the finance team. where do we put that in the priority of work that we need to do with them. we do, even though, i think the way you asked the question, you were characterizing it as something that may be in our future as we do the big

acquisition. but actually, individual investments that we've done like the contribution project would have been funded that way. the port wants a new sub station, you know, is that something that we should be looking at? a public partnership for that. they qualify, they likely would qualify as green bond projects and so they're attractive to third parties who are looking to invest in a responsible way. >> i have the green ones written, i want today make that comment later. i appreciate hearing that. one last thing i would say, is this power conversation that you and i had last week with you know, when you look at the iias, you know cost of power, we definitely, the east coast has been the most vulnerable when it comes to cost of

acquisition. and your point was, it's very much driven by national gas, the cost of natural gas which you know, absolutely on point and that is definitely a driver of that. so we did a lot of west coast invested on natural gas of veering off coal power plants. examine now we're in a situation which is very difficult. i'm thinking if there is a lesson there, is there a strategy that we have to put in place to make sure that we don't end up in this situation again? i know it's a long winded

question but it worries me when i look at the numbers. we don't know when that war is going to be over. i'm just trying to see what we can do to help us in the long run. >> just and to make sure, you're reflecting at the presentation that i made at the last commission meeting. where we talked about the prices that we're seeing and the wholesale electric market and how they're influenced by the natural gas market and the global events that we are facing. i think one of the main approaches is looking at investment in non gas fired resources. looking at investment in storage. looking at investment in firm renewables or new technologies, you know, folks are coming forward with some new technologies.

this all goes to the issue of diversification, making sure that we're not putting our eggs in one basket. so really, i think that's our perspective on it, that's our response to it. of course we're a teeny tiny actor in this. when you're participating in the state of california beinger that's really what the themes are. so we're not alone. and california will move with consistent with the direction from the state legislatures which are consistent with that. >> thank you so much. can we have public comment on this. >> members of the public who wish to make two minutes on item 6, the hetch hetchy power and clean power capital plan,

please press star-3 to raise your hand to speak. do we have any members of the public present to make comment on item 6. seeing none, mr. moderator do we have any callers. >> madam secretary, we do have two callers wishing to be recognized. caller 1, i have unmuted your mic. go ahead, you have two minutes. >> speaker: great, can you hear me okay? >> yes, thank you. >> speaker: great, dave last time today. so i hope that new electric vehicle charging stations keep up with demand, serve residents needs and cover their costs. i don't know if people have to pay to charge electric vehicles, it seems if not it seems to me that the public, as far as i know, didn't pay to construct gas stations and you can't go get free gas any where.

so it would seem odd that electric vehicle users can charge enough costs. i think that rates for power should cover all of the operating and capital costs whether that's municipal streetlights or clean power sf, perhaps we'll have more discussion with the next rate package. further on rates, i hope that all green tariff programs require time of use rates. in my view, we should have everybody on time of view pricing. i agree that utility field services needs a permanent house and warehouse base. and i'm thinking maybe long term, newcam is the one. i would use more hoteling in the building for staff who aren't always there and try to

get out of lease across the street at 544 golden gate. and those are my comments and i can follow-up with other questions i may have. thank you very much for listening. >> thank you, for your comments. next caller, i have unmuted your line, you have two minutes. >> speaker: can you hear me? >> yes, go ahead. >> speaker: i just had a first of all i want to say, i'm really interested in this project. i'm very interested in green energy can help these meetings. great project. very interested. i'm following up with the question as well as other questions. you mentioned one source of funding is going to be on here. my question is, is there details how much this would change the cost of what we pay for rates in regards to funding

these projects and my fault to that, you mentioned that these projects treasure island, and mission and hope. does this mean that those districts if they had to pay more to fund these projects, would it be limited to these region all others, under the hetch hetchy would everybody be responsible to paying? and that should be it for my questions. thank you for your time. >> thank you for your comments. madam secretary and commissioners, there are no other callers who wish to be recognized. >> thank you, public comment. item number 7 is closed. >> excellent, colleagues any last-minute comments? commissioner stacy, go ahead please. >> i just want to say thank you to the general manager and staff for this workshop today. it was incredibly useful for me.

the presentations and the materials have been really helpful. so thank you, it's really an impressive effort. >> thank you. >> thank you, i also want to say thank you, thank you for all of to you put this together. it's always so useful to have this conversation and go tlut numbers. i want to leave you with three things. one is, we're all facing so many different pressures in our system from impacts climate change to social issues we're dealing with and pandemic, you name it, everybody coming through our smoothly running system, i'm sure steve really agrees with that. it's definitely coming faster and with a bigger force. so it's impacting us in different ways. and i think with that, i want to make sure we're all

partnering together to help you move to the next phase of what sfp needs to look like. how does the utility needs to look like, how do we need to make sure that we can build something that can last long time and be sustainable and providing service that's are valuable to our public. that means engaging with our public in a active way, making sure that we have a rate setting process in place. making sure that we're investing in the right project, all of the above. and with that, i would just leave you with two things. when i joined the commission one of the things that i kept mentioning is, i would like for to us collaborate across enterprises a little bit more. we're, people constantly talk about water and base water and collaboration across the board and water and power. we see some of that prapg. for example in the hetch

hetchy, mr. ritchie was saying, showing how we invest and that's a great mod thael we already have. and i want to see if we can do more of that, not just for projects that are obvious but things that we need to think about how can we generate energy from our waste, how can we think about generating water from our waste water and how can we do all of these partnerships that we can do across the board. how the storm water become a water supply, i know that we're thinking about but don't necessarily think on a, on a case to case basis, we are actually creating these partnerships. we don't really have the right system in place to enable some of that. but creating that would be very valuable, we talked about

external partnership, mr. nolby mentioned that. focusing on that is very important. last thing, alling of these projects that we have in the books, we have to think about the long term value. how we can make sure that we're touching on the all sustainability goals to make sure that we can take advantage of the green bonds and all the other more innovative financing mechanism that's are out there. so, and again, taking advantage of some of the climate investment and all the money that is coming down to transition us to a new generation of everything. i want to make sure that we can take advantage. if that means that we have to think about our financing model, if we have to change certain things, we are here to help you. so help us, help you to make sure that we can all move together towards a different outcome and different future. so, with that, thank you. go ahead please.

>> i guess we're struggling now with deliberatedeliver--deliverabilit y and accountability. and the next emergency is around the corner. i appreciate all of your hard work. i think it would be good if we, look forward to having another discussion about an emergency and what we have in place. >> excellent. i think that would be good. so with that, this meeting is adjourned.

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