MINUTES REGULAR MEETING Tuesday, March 11, 2008 1:30 P.M. City Hall, Room 400 1 Dr. Carlton B. Goodlett Place COMMISSIONERS The Honorable Ann Moller Caen President The Honorable E. Dennis Normandy Vice President The Honorable Richard Sklar The Honorable David Hochschild The Honorable F. X. Crowley

DEPARTMENTS AND ENTERPRISES Water Enterprise Wastewater Enterprise Power Enterprise Infrastructure Business Services External Affairs Gavin Newsom MAYOR   Susan Leal GENERAL MANAGER Michael Housh SECRETARY

ORDER OF BUSINESS:

1. Call to Order: 1:40 P.M.

2. Roll Call: Present – President Ann Moller Caen, Commissioner Richard Sklar, Commissioner David Hochschild, and Commissioner F.X. Crowley

Excused: Vice President E. Dennis Normandy

3. Approval of Minutes

Moved by Commissioner Sklar, seconded by Commissioner Hochschild, to adopt the Minutes of the February 13, 2008, Special Meeting and February 20, 2008, Special Meeting; passed (4-0 Caen, Sklar, Hochschild, and Crowley) unanimously.

4. Public Comments

There was no public comment.

5. Communications

There was no discussion.

6. Other Commission Business

Commissioner Sklar requested an opportunity to follow up on discussions concerning four issues raised during the budget meetings. Commissioner Sklar began by asking what steps could be undertaken right away to address the continuing odor problems experienced by the neighbors of the Southeast Treatment Plant since its construction 30 years ago.

Commissioner Sklar outlined four specific actions that Acting Assistant General Manager of Wastewater Tommy Moala had informed him that staff could undertake to address this problem. 1) action was underway to seal the place where put the waste solids cake is transferred into trucks, 2) a $6.3 million contract to upgrade the water channels leading to the clarifiers was in process and 3) carbon filtering of the air above the Clarifiers could be installed. Commissioner Sklar then reported that former Assistant General Manager Don Birrer had suggested that it might be possible to tent the digesters themselves, which are going to take several years to replace, and seal off the major source of odor leakage. Commissioner Sklar noted Mr. Moala had agreed this might work and that Acting Assistant General Manager for Wastewater Tommy Moala confirmed that he could bring back a budget and schedule at the April 22nd meeting for this tenting proposal to the Commission to see how quickly this might be accomplished. Next, Commissioner Sklar turned to the critical inspection cleaning and repair of the existing 1000 mike network of wastewater lines and asked what it would take to meet our permit requirements and to report back to the commission what funding was needed by April 22nd.

Finally, Commissioner Sklar recalled that the Commission had directed that the monthly $97,000, received from the Transbay Cable be allocated for energy conservation programs in the Southeastern neighborhoods. Commissioner Sklar noted that the Board of Supervisors had other plans for this money, but observed that it was the Commission’s responsibility to allocate and if the Supervisors wished to change this during their budget deliberations so be it. Acting General Manager Tony Irons outlined the details of exactly how the Transbay Cable revenues were received and noted that this might be addressed over this year and next year’s budget. Mr. Irons noted that these funds were reserved in a bucket for the Commission to expend as it wished. In response to a question by President Caen, Mr. Irons reported the revenues were in the listed reserve bucket as directed. Commissioner Sklar noted that these particular funds as incoming revenues did not require placement in the bucket unlike the line items for the Newark to San Francisco Transmission Line study and providing power to the new Transbay Terminal Project. Assistant General Manager of Finance Scott MacDonald noted that these two expenditure line items were reserved in bucket #1 for the Commission’s later direction for use. Commissioner Sklar emphasized that he wanted the Transbay Cable revenues be reported next year as an available revenue item in the Budget submitted to the Controller and Mayor to be allocated by the Commission for energy conservation activities with private sector support in the Southeastern neighborhoods as the Commission had promised.

President Caen formally requested that Commissioner Sklar’s two items be calendared for further discussion and possible action the April 22nd regular meeting.

Commissioner Hochschild requested that an in-depth discussion of aggressive steps that might be undertaken to encourage greater water conservation. In particular, Commissioner Hochschild called attention to outdated water conservation language in the requirement for upgrades when properties change hands in San Francisco, which the Commissioner reported occurs roughly every seven years.

Commissioner Hochschild asked that Assistant General Manager of water Michael Carlin and Deputy City Attorney Noreen Ambrose work together to draft updated language to make current the water conservation requirements and to, in particular include an enforcement mechanism, as he had been reliably informed by that even the existing inadequate requirements were often being ignored. Commissioner Hochschild then asked if staff could look at how much energy might be saved by more aggressive water conservation that would in turn reduce energy needed to move the water around. Mr. Irons agreed that this was an intriguing idea and noted that staff was in addition very interested in developing means to recapture the energy currently being used to pump water into reservoirs and harness the energy released water when it was pumped out again.

In response to a query by Commissioner Hochschild, Mr. Irons noted that a study of the use of micro turbines was being examined. In response to a comment by Commissioner Sklar, Mr. Irons noted our system’s widespread use of pressure release valves that would potentially allow pressure levels to be maintained with the use of the micro turbines.

In response to a question posed by President Caen concerning conflicting press reports as to the presence of contaminants in water across the country, Mr. Carlin clarified that there was an incorrect report of pharmaceutical contaminants being in our water due to laboratory contamination. Mr. Carlin noted that the PUC’s aggressive and early efforts to continually research, test, and monitor water quality insured that the integrity of our water was protected. Commissioner Sklar observed that the correct report was that due to its geography and staff’s excellent watershed management our water was indeed the most pristine and contamination free in the nation. Commissioner Sklar proposed that our water be compared to bottled water, a test the PUC was sure to win. In response to a question about the degree of testing by President Caen, Mr. Carlin noted that we test to parts per quadrillion and that the tests that were reported could identify some naturally occurring compounds.

President Caen asked that the Commission Secretary confer with Commissioner Sklar regarding his travel plans, so that if needed upcoming regular meeting times might be adjusted over the next few months.

Report of the General Manager

7c) Solar Energy Incentive Payment Program

Assistant General Manager Barbara Hale reported on the Solar Incentive Program that given the lack of progress with this Program the Board of Supervisors staff proposed to move forward on a pilot basis as planned with an incentive program for business and residences using $3 million in available Mayor Energy Conservation Fund (MECA) funds. The plan was, beginning March 24th, applicants would provide a copy of their reservation dated after December 11, 2007, California Solar Initiative Rebate, a notice from PG&E accepting their system onto their grid, a liability contract needed by the City, and a federal W-9 tax form. This would reduce the typical $20, 000, cost of these systems down to a more affordable cost of $11,000 to $13,000.

In response to a question by Commissioner Sklar as to why the Board was not moving forward, Ms. Hale noted that the item had passed first reading then referred back to committee with concerns expressed at a lack of any means testing for participants. Ms. Hale noted that there was great interest in the solar installer and local residents and businesses in moving forward on this. Ms. Hale reported that Mayors Newsom had indicated that he might place this issue on the Ballot in November.

In response to a follow up question by Commissioner Sklar, Ms Hale indicated that the Commission had the authority to go forward and that payments would be made only after systems were up and running. In answers to a question by Commissioner Sklar concerning the loan program, Ms Hale reported that this was still being studied and that there were concerns with reallocation of enacted seismic bond mnnies for this program. In response to a request for clarification regarding the taxability of our program, Ms. Hale reported that they would be taxable and that was why the federal W-9 forms were being required.

Commissioner Hochschild then asked if efforts for outreach dovetailed with efforts to promote water conservation could be focused on the 11 supervisorial districts for a month long in-depth focus to engage residents and businesses in each district. Commissioner Hochschild noted that the pioneering effort in this regard in Sacramento seemed to indicate that this kind of localized approach was effective. Communications Director Tony Winnicker applauded this idea and said staff would be happy to work with the Commissioner to pull together such an outreach effort.

Commissioner Hochschild explained that there had been three attempts, under the leadership of Speaker Nancy Pelosi, in the Congress, to extend and ideally expand the federal solar tax credit and expressed hope that it will pass this year in some form. Commissioner Hochschild also suggested that should the size of the solar tax credit be increased that our incentive payment should be proportionately reduced to allow for greater participation within the funding available.

Commissioner Crowley asked about how many San Franciscans had inquired about participation in our pilot program. Ms. Hale noted that there was a good deal of interest and installers had reported a great deal of excitement when the program was announced and approved. Commissioner Hochschild noted that since 2000 there were roughly 20 solar installations the numbers of solar installations have steadily increased to more than 750 today and perhaps we should develop a temperature chart model to track solar progress toward the City’s stated goal of 10,000 solar installations.

7d) Earth Hour

Ms. Hale reported on the “Earth Hour” an international effort beginning in Sydney, Australia and moving around the globe to call attention to addressing climate change and the need for energy conservation to be observed on Saturday, March 29th from 8 to 9PM. Ms. Hale reported San Francisco was the official “Earth Hour” Pacific Coast Time Zone City and that this public education and outreach effort is led by Mayor Newsom, and supported by a number of City Departments. Ms Hale outlined plans for this special focused project included extensive education and outreach effort including dimming the lights at City Hall and public buildings, but not public safety lighting, encouraging residents to reduce their lighting use, and a large scale distribution of energy efficient light bulbs by the PUC and PG&E, to promote sustainable energy conservation a result from this worldwide effort. Mr. Irons then updated the Commissioners on plans to provide energy efficient bulbs for use in the Mayor’s offices in City Hall.

7a) Water System Improvement Program/Capital Program/ Wastewater Master Plan (Irons/Labonte)

WSIP Director Julie Labonte informed the Commission that the requested Risk Mitigation Action Plan consisting of 70 identified measures with identified sub action items was being published very soon with reports on this measure included in future quarterly reports. Next, Ms. Labonte announced that the AB 1823 Report would be delivered to the California Seismic Safety Commission and California Department of Public health by the end of the month. Finally, Ms. Labonte reported that from now forward the Quarterly Report will include a new level of detail of information in a more user friendly format. Ms. Labonte reported 11 projects were under construction and that several new contracts are pending including a Request for Proposals (RFP) for a design build contract for the Tesla Treatment Facility, followed by major contracts for the Crystal Springs Bypass Tunnel and the Alameda Siphon Number Four.

Responding to a question related to the estimation of the inflation rates impact on the program, Ms. Labonte reported the good news that in the early small projects costs were coming in under the engineer estimates and that as two very large projects go forward this summer and two even bigger projects at the end of the year the Bay Division Pipeline and the Calaveras Tunnel Project, a very clear picture of what the reality of inflation on project costs would be clear. In response to a follow question by Commission Sklar concerning the impact of Project Environmental Impact Review (PEIR) delays on “critical path” of projects, Ms. Labonte discussed two critical projects that potentially could be impacted by delays in the environmental review process, the Bay Division Pipeline No. 5 and the Calaveras Tunnel Project. Ms. Labonte reported as of this point everything was on schedule.

Mr. Irons noted that the critical lynchpin issue of water supply and related questions concerning diversions from the Tuolumne River that would have to be addressed carefully and seriously as this process went through the Planning Commission and came before the Commission for its review and approval.

7b) Recycled Water Program

Assistant General Manager of Water Michael Carlin presented a detailed update on a wide array planned and active projects underway in the PUC’s Recycled Water Programs. Mr. Carlin outlined the details of the Pacifica Project, the Harding Park Project, and what was identified as Westside Basin projects located within San Francisco. Mr. Carlin noted that recycled water can become an unlimited water resource and that the staff’s planning focused on consideration of all options which also included ground water and desalinization with a pilot program underway in the Delta with regional partners.

Mr. Carlin then explained in detail each of the ongoing projects related irrigation uses for tertiary treated recycled water were partnered projects such as Sharp Park Golf Course in Pacifica, and at the Harding Park Golf Course in partnership with Daly City. Mr. Carlin called attention to the potential for use of available recycled water from the joint Daly City Plant in the already existing dual irrigation system, and in the San Francisco for development of a recycled water facility from the available site in the Westgate Berm at the Oceanside Plant with a clear well reservoir for uses at the Zoo and for use of recycled water and groundwater with the creation of new 1,000,000,000 gallon storage reservoir adjoining an existing Recreation and Park facility for customers in Golden Gate Park and perhaps underground in Lincoln Park. Mr. Carlin noted that these systems were totally separate from the regular water distribution and that the final alignments for these new lines were still under development. Mr. Carlin noted that now was the time to present these plans to the community to begin a serious in-depth dialogue, provide clear answers to any public concerns with use of treated recycled water, and know realistically what was possible before bringing a fully vetted and if necessary modified plan to the Commission to have the project in place by 2013.

Commissioner Hochschild applauded the vision underlying these plans and asked if there was financial saving possible through expanded use of recycled water. Mr. Carlin responded that given its higher development costs that would be difficult to say but that it would expand our available supply of potable water for sale. In response to a follow-up question concerning possible use of recycled water by the Fire Department given that the Fire Department is looking to expand and upgrade its high pressure emergency response water system. Mr. Irons reported that there was a potential use for groundwater Civic Center public building were currently pumping into the sewer system to be instead recycled for use in their purple pipe system.

8. Bay Area Water Supply & Conservation Agency (BAWSCA) General Manager’s Report.

General Manager of BAWSCA Arthur Jensen welcomed Commissioner Crowley. He expressed regret that he had to miss the budget meeting but reported that he had submitted comments on the WSIP in writing and hoped they had been helpful. President Caen responded that she found the BAWSCA comments very useful.

CONSENT CALENDAR

9. All matters listed hereunder constitute a Consent Calendar, are considered to be routine by the San Francisco Public Utilities Commission, and will be acted upon by a single vote of the Commission. There will be no separate discussion of these items unless a member of the Commission or the public so requests, in which event the matter will be removed from the Consent Calendar and considered as a separate item.

Moved by Commissioner Sklar, seconded by Commissioner Crowley, to adopt items (a-b) listed under the Consent Calendar; passed (4-0 Caen, Sklar, Hochschild, and Crowley) unanimously.

a) Resolution No. 08-0032:

Accept work performed for Water Enterprise Revenue Program–funded Contract WD-2491, Ingoing Road Overlay Phase II, by NTK Construction Inc., approve Modification No. 1 (Final), decreasing the contract by $174,946.14 for a total contract amount of $746,620.56 for a total contract duration of 72 consecutive calendar days; and authorize final payment, in the amount of $74,662.06, to the contractor.

b) Resolution No. 08-0033:

Approve the plans and specifications and award Wastewater Enterprise, Repair and Replacement (R&R) Program-funded Contract No. WW 421, Euclid, Pacific and 36th Avenues Sewer Replacement, in the amount of $898,060, to the lowest, qualified, responsible and responsive bidder, Harty Pipelines.

REGULAR BUSINESS

10. Discussion and possible action to adopt a resolution banning San Francisco Public Utilities Commission purchase of Incandescent Light Bulbs except when authorized by waiver.

Moved by Commissioner Sklar, seconded by Commissioner Crowley, to adopt the following resolution as amended; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Commissioner Hochschild stated that it was of critical importance that the PUC undertake an aggressive effort to limit as much as was reasonably feasible any future uses of incandescent light bulbs would not be permitted in PUC facilities and that was why he had authored this very strong and clear policy statement that he hoped his colleagues would enact. Commissioner Sklar, joined by President Caen, commended this idea as a practical step forward and recommended that we enlist our colleagues in the Department of the Environment to encourage other city departments to do so as well. At the suggestion of Mr. Irons, Commissioner Sklar proposed an amendment adding a further resolved clause to this resolution calling on other City Departments to also undertake a similar effort to eliminate incandescent bulbs to conserve energy.

This amendment was moved by Commissioner Sklar, seconded by Commissioner Crowley passed (4-0 Caen, Sklar, Hochschild, and Crowley) unanimously.

11. Discussion and possible action related to approving adjustments to the boundaries of the City of Hayward's Ultimate Water Service Area) pursuant to section 7.04(b) of the 1984 Master Water Sales Agreement.

Moved by Commissioner Sklar, seconded by Commissioner Hochschild, adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No. 08-0035:

Approve adjustments to the boundaries of the City of Hayward's Ultimate Water Service Area (UWSA) pursuant to section 7.04(b) of the 1984 Master Water Sales Agreement (Master Contract) between the SFPUC and its wholesale customers.

REAL PROPERTY TRANSACTIONS

12. Discussion and possible action related to authorizing the General Manager to execute a lease with LAEC Management.

Deputy City Attorney Noreen Ambrose called attention to the need for a minor revision in the text of the resolution to clarify its intent.

Moved by Commissioner Sklar, seconded by Commissioner Hochschild, to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No. 08-0036:

Authorizing the General Manager of Public Utilities to execute on behalf of the City and County of San Francisco a lease with LAEC Management, LLC (LAEC), to use approximately 11,369.16 square feet or .261 acre of the right of way, adjacent to 4470 El Camino Real, Los Altos, CA for access, parking and landscaping purposes.

13. Discussion and possible action related to authorizing the General Manager to request the Director of Property to prepare and submit legislation to the Board of Supervisors to accommodate the direct purchase of 39.63 acres of land.

In response to a question by Commissioner Hochschild, Real Estate Director Gary Dowd confirmed that this property was intended for watershed protection, and was included in a list of properties that the Commission had identified for future acquisition

Moved by Commissioner Hochschild, seconded by Commissioner Sklar, to adopt to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No. 08-0037:

Authorizing the General Manager of the San Francisco Public Utilities Commission (SFPUC) to request the Director of Property to prepare and submit legislation to the Board of Supervisors to accommodate the direct purchase of 39.63 acres of land, also known as a portion of Tuolumne County Assessor Parcel 066-670-01, located on Priest Coulterville Road, Moccasin, CA, from Mr. Martin M. Sanchez.

CONSTRUCTION CONTRACTS

Award

14. Discussion and possible action related to approving Contract No. HH-930 Job Order Contract, General Engineering Services (A-License), San Francisco/East Bay/Peninsula.

Assistant General Manager for Infrastructure Harlan Kelly explained that this was but the latest in as series of “as needed “ contracts that were proving to be very useful in keeping the flow of project moving forward. In response to a question by President Caen, Mr. Kelly and Commissioner Sklar explained the report of estimated future costs indicated that should it be necessary the contract could be extended to address additional work needed. In response to a question by Commissioner Crowley related to the Project Labor Agreement, Mr. Kelly noted that agreement applied to project over $5 million and that this one was less than that.

Moved by Commissioner Sklar, seconded by Commissioner Crowley, to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No. 08-0038:

Approve the plans and specifications and award Enterprise-funded Contract No. HH-930, Job Order Contract, General Engineering Services (A-License), San Francisco/East Bay/Peninsula, in the amount of $3 million and with a duration of two years, to the lowest, qualified, responsible and responsive bidder, Power Engineering Contractors, Inc.

Amend

15. Discussion and possible action related to approving the option to modify Contract No. WD-2533 General Construction Services, San Francisco/Peninsula.

In response to a question by Commissioner Sklar, Mr. Kelly this was a continuation of a previous “job order contract and that the work was being performed to expectations.

Moved by Commissioner Sklar, seconded by Commissioner Hochschild to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No. 08-0039:

Approve the option to modify a Job Order Contract up to one hundred-fifty percent of the original contract amount and extend contract to three years as allowed in Chapter 6 of the Administrative Code, and modify Contract No. WD-2533, (Job Order Contract) General Construction Services, San Francisco/Peninsula, in the amount of $1.5 million for a total contract amount of $4.5 million and extend one year for a total duration of three years, to Yerba Buena Engineering.

PROFESSIONAL SERVICE CONTRACTS

Amend

16. Discussion and possible action to adopt a Resolution approving Amendment No. 1 to Agreement No. CS-765, San Francisco Water System Improvement Program – Program/Project/Pre-Construction Management Services, with Parsons Water and Infrastructure, Inc. to continue to provide program, project and pre-construction management services and authorize the General Manager of the San Francisco Public Utilities Commission to execute this amendment increasing the Agreement by $7,000,000, for a total Agreement amount of $45,000,000, with no time extension, subject to Board of Supervisors approval pursuant to Charter Section 9.118.

Commissioner Sklar recounted the tangled processes that had brought the PUC to this unhappy point on this contract. Mr. Kelly passed out the November 13th Commission Agenda presentation on this contract that was approved by the Commissioners at their special meeting at the Southeast Community Center. Mr. Kelly then reported on the lengthy process that finally brought this matter to the Board’s February 20th Finance Committee. Board of Supervisors President Aaron Peskin, a committee member, felt that given the $19 million value of this contract that it should go out for competitive process again by sending out a Request for Information (RFI). When PUC staff explained to the Board Committee that there were only two months of funding left to continue this essential work, the Board’s Budget and Finance Committee agreed to authorize the $19 million to allow the work to continue pending Commission action to amend this amount to $7 million and initiate a competitive process again.

President Caen expressed dismay that given the expenditure of $36 million of the total $38 million available so far, why staff had waited until the very nearly end of the available funds was pressing before bring this back to the Commissioners for action and additionally why this situation had not been addressed when staff became aware of the true situation. Mr. Kelly replied that since the original contract was made in 2004 a great many very significant changes and worthwhile expansion in the scope of work had been necessary as the programs went forward thus expending the funding at a more rapid rate than had been anticipated. Unfortunately Mr. Kelly continued by the time staff arrived at the final figure of $19 million to finish the job, the funds were approaching exhaustion.

Mr. Irons noted that the Commissioners had expressed a good deal of well merited discomfort with the expenditure of such a great deal of money and with the way this situation had been allowed to develop at that point when the contract was brought to them for approval previously. As a corrective against repetition of this kind of problem, Mr. Irons proposed that the Contracts Department maintain regular reports that carefully tracked in regular reports to the Commission the rate of expenditures of these kinds of professional services contracts against their available funds.

Commissioner Sklar noted that he had originally thought that the amount proposed for creation of the central nervous system of our most critical project had been too low. In addition, the Board’s delay in taking this matter up did not help. Further, Commissioner Sklar noted that our Program Manager had been tasked with a great many unanticipated assignments at significant additional cost and the work was necessary and had been well done. Commissioner Sklar pointed out that the preferred situation was to keep effective program managers throughout the life of a project. Commissioner Sklar noted that by participating, our preferred firm could put itself at a disadvantage, secondly they could they be debarred from participating in further work by having a perceived advantage. Next, Commissioner Sklar asked would this valued firm history of excellent performance on this job deter competition given their outstanding performance and extensive involvement. Commissioner Sklar noted that it was very unlikely that Mr. Irons could negotiate such an advantageous deal with Parson’s this time around and that the Commission had to approve the proposed action or risk stopping progress.

Mr. Irons pointed out that the Commission could approve this action but send a clear message to the Board that the original $19 million was correct. Commissioner Sklar also expressed discomfort that PUC staff had been forced by circumstance into a role of negotiating terms of a contract with the Supervisors. Mr. Iron noted that it had been unfortunately necessary and confirmed that the original Request for Proposals (RFP) for this project specifically addressed the question of exclusions from future work. Commissioner Sklar acknowledged that this was a necessary band aid but that he wanted to see in place an effective mechanism to address this issue.

In response to a question by President Caen, Mr. Irons stated that any new RFP must come before the Commission for its review and approval. Commissioner Sklar’s only substantive critique of this situation was that staff did not bring it to the Commission as soon as they became aware of the problems. Commissioner Hochschild asked how well Parson’s had been working and Mr. Kelly responded that they were evaluated as excellent. Commissioner Sklar asked if Mr. Irons, Ms. Labonte, and Mr. Kelly would confirm that Parsons was doing an excellent job. However, Mr. Irons noted that there were other firms that could also do a good job and that this decision was a policy matter for the Commission to determine.

Public Comment:

Mr. Art Jensen applauded the seriousness of the discussion of this situation and expressed dismay that anything could threaten the continuity of the program and observed that lost time would be lost money in this critical multi-billion dollar program.

Moved by Commissioner Sklar, seconded by Commissioner Hochschild to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No. 08-0040:

Approve Amendment No. 1 to Agreement No. CS-765, San Francisco Water System Improvement Program – Program/Project/Pre-Construction Management Services, with Parsons Water and Infrastructure, Inc. to continue to provide program, project and pre-construction management services and authorize the General Manager of the San Francisco Public Utilities Commission to execute this amendment increasing the Agreement by $7,000,000, for a total Agreement amount of $45,000,000, with no time extension, subject to Board of Supervisors approval pursuant to Charter Section 9.118.

17. Discussion and possible action related to authorizing the General Manager to approve Amendment No. 2 No. CS-716, Engineering Services, Calaveras Dam Replacement Project, with URS Corporation to provide additional final design, environmental and permitting support services. (Labonte)

Ms. Labonte noted that from the beginning it was intended that this matter be brought back for the Commission as the design work continues and that as this contract was over $10 million it would have to go before the Board of Supervisors. In response to a question by President Caen as to what was “naturally occurring asbestos,” it was explained by Mr. Irons and Commissioner Sklar that this was a naturally occurring component of serpentine rock that was commonly found throughout this region and on this site. Ms. Labonte proposed to develop a model that would trigger a report to the Commission when costs escalate in design phases so that the Commission could understand how project managers proposed to complete the project within budget and discussed how this might be accomplished with the Commissioners.

Moved by Commissioner Hochschild, seconded by Commissioner Crowley to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No. 08-0041:

Approve Amendment No. 2 to Water Enterprise Water System Improvement Program-funded Agreement No. CS-716, Engineering Services, Calaveras Dam Replacement Project, with URS Corporation to provide additional final design, environmental and permitting support services; and authorize the General Manager of the San Francisco Public Utilities Commission to execute this amendment increasing the agreement by $1,900,000, for a total agreement amount of $13,900,000.

CLOSED SESSION

18. Public comments on matters to be discussed in Closed Session.

There was no public comment.

19. Motion on whether to assert the attorney-client privilege regarding the matters listed below as Conference with Legal Counsel.

Present were President Caen, Commissioners Sklar, Hochschild, Crowley, SFPUC City Attorney Noreen Ambrose and Commission Secretary Michael Housh.

Moved by Commissioner Sklar, seconded by Commissioner Crowley to assert the attorney-client privilege regarding the matters listed below as Conference with Legal Counsel and go into a closed session.

The Public Utilities Commission met in Closed Session at 3:35 P.M.

20. Threat to Public Services or Facilities – Pursuant to California Government Code Section 54957 and San Francisco Administrative Code Section 67.10(a). (Ambrose)

Consultation with: Agency Chief of Security concerning security of SFPUC Water and Power Systems.

21. Pursuant to Government Code Section 54957 and San Francisco Administrative Code section 67.10(b): Public Employee, Position of San Francisco Public Utilities Commission, General Manager Consideration and possible action on terms of employment, as authorized pursuant to San Francisco Charter Section 8B 126(a). (Ambrose)

22. Conference with Legal Counsel - Pursuant to California Government Code Section 54956.9(a) and San Francisco Administrative Code Section 67.10(d). (Haase)

Moved by Commissioner Sklar, seconded by Commissioner Crowley to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No. 08-0042:

Settlement for Richie Wong, Claim Number 08-01648 (09-W0025-1) Filed January 4, 2008.

23. Conference with Legal Counsel - Pursuant to California Government Code Section 54956.9(a) and San Francisco Administrative Code Section 67.10(d). (Anderson)

Moved by Commissioner Sklar, seconded by Commissioner Crowley to adopt to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No.08-0043:

Settlement for Karyln Lotney, Claim Number 07-00378 (06-W0086-24), Filed August 15, 2006.

24. Conference with Legal Counsel - Pursuant to California Government Code Section 54956.9(a) and San Francisco Administrative Code Section 67.10(d). (Anderson)

Moved by Commissioner Sklar, seconded by Commissioner Crowley to adopt the following resolution; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

Resolution No.08-0044:

Settlement for Lydia Sebastian, Claim No. 08-01842 (08-W00273-3) Filed January 23, 2008.

Following the Closed Session, the Commission reconvened in Open Session at 3:56 P.M.

25. Announcement following Closed Session.

President Caen announced that there was no action on Item 20, on Item 21 terms of agreement were approved that the City Attorney was directed to complete, and Items 22, 23, and 24 were settled.

26. Motion regarding whether to disclose the discussions during Closed Session.

Moved by Commissioner Sklar, seconded by Commissioner Crowley, not to disclose the discussions during Closed Session; passed (4-0 Caen, Sklar, Hochschild and Crowley) unanimously.

There being no further business to discuss, the meeting was adjourned at 3:58 P.M.

Michael Housh
Secretary