MINUTES REGULAR MEETING Tuesday, May 27, 2008 11:30 A.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   Ed Harrington GENERAL MANAGER Michael Housh SECRETARY

ORDER OF BUSINESS:

1. Call to Order: 11:40 A.M.

2. Roll Call: Present – President Ann Moller Caen, Vice President E. Dennis Normandy, Commissioner David Hochschild, Commissioner F.X. Crowley. Commissioner Sklar’s arrival was expected.

3. Approval of Minutes

Moved by Commissioner Crowley, seconded by Commissioner Hochschild, to adopt the Minutes of the May 13, 2008, Regular Meeting; passed (4-0 Caen, Normandy, Hochschild and Crowley) unanimously.

4. Public Comments

Ms. Aliza Wassermen, activist for Community Aggregation, urged that the City move forward with Community Choice Aggregation (CCA) by the end of this year decrying the long delay in moving this critical program forward.

5. Communications

Vice President Normandy suggested a business friendly response to a letter received from JNA Ventures, who seemed to have been caught up in a bureaucratic maze.

6. Commission Business

There was no discussion.

7. Report of the General Manager

a) FY 08-09 Budget Update

General Manager Ed Harrington recognized and applauded Assistant General Manager Scott MacDonald’s work as he would be leaving his position at the end of May. Mr. MacDonald then outlined briefly the changes made by the Mayor’s Budget Office to the FY 2008-09 Budget since the Commission approved it in February. Mr. MacDonald called attention to a $2 million Camp Mather project to renovate the leach field, a $450,000 increase for energy efficiencies HVAC Systems for two General Fund Departments, and a $2 million increase in contribution to Department of Public Works for a total contribution of $5 million for street sweeping, and an early contribution for Project Emerge to the Department of Human Resources to track positions as an advance payment. In response to a query from President Caen about the increase for street sweeping, Mr. MacDonald noted that this focused on clearing up after storms as a priority. Next turning to revenue decreases Mr. MacDonald noted that Mayor Newsom directed power costs rate reductions made for six General Fund Departments: the Office of the City Attorney, the Trial Courts, Juvenile Probation, Department of Human Resources, the Health Services System, and the Department of Emergency Management. Mr. MacDonald also noted the deferral of Mayor’s Energy Conservation Account (MECA) repayments by Convention Facilities of $4.6 million.

In response to Commissioners’ questions Mr. MacDonald reported that all Departments would pay at a rate of 3.75 cents per kilowatt hour. Mr. MacDonald then outlined the upcoming Board of Supervisors process noting that all questions raised by the Board’s Budget Analyst had been addressed and agreements achieved to reduce some unfilled positions. President Caen, on behalf of the entire Commission, thanked Mr. MacDonald for his years of service.

b) Water Supply Update

Assistant General Manager of Water Michael Carlin next presented an overview of the current water supply outlook during this dry year, reporting conditions as being very similar to the situation at this time last year, but noting we had experienced the driest March and April in history. Mr. Carlin then outlined the various entitlements allocated to the Districts and to the SFPUC. In response to questions by Commissioner Hochschild, Mr. Carlin explained what they were and how the levels of entitlements were determined. Mr. Carlin then outlined the situations at Lake Eleanor and Cherry Lake. Next Mr. Carlin reported on the current probability analysis suggesting a voluntary 10% reduction in use would be requested of system users again, similar to that requested last year.

c) Water Quality Protection Plan

Water Quality Bureau Manager Andrew DeGraca presented a summary of the proposed water protection plan developed by a distinguished national panel of experts convened in response to a World Water Day directive announced by Mayor Newsom at a Ferry Building ceremony. Mr. DeGraca reported that this plan was focused on protecting and maintaining water quality in the Public Utilities Commission’s great assets in our outstanding Hetch Hechy Water System following national press reports of contamination in water systems elsewhere and called attention to eleven recommendations regarding what to look out for and how to respond using the newest technologies.

Mr. DeGraca then outlined the major projects underway to optimize the SFPUC abilities to monitor and respond moving forward with this effort and noted that the Department of Public Health was actively engaged in supporting this work. Mr. DeGraca noted that our abilities to monitor had reached a very high level. Mr. DeGraca reported on expanded efforts to engage with customers and reach beyond metering and look to the newest scientific models for treatment. Mr. DeGraca then outlined the next steps and requested any Commission input into this process. Vice President Normandy applauded this outstanding effort but noted in caution that this project just continued the Public Utilities Commission’s existing very high standards of water quality protection.

Responding to President Caen’s inquiry as to why these questions were being raised, Mr. DeGraca pointed to press reports of pharmaceutical residues being reported in other water systems. Vice President Normandy noted that all of the public attention offered a golden opportunity to again emphasize the particularly outstanding quality of our water. Commissioner Crowley noted that these efforts were in accordance with the goals of the National Water Quality Council and thanked and commended staff for their hard work on this worthy project. Commissioner Hochschild noting that the bottled water industry capitalized on a public misimpression as to the quality of our tap water and asked if it would be possible to offer restaurants a discounted rate to encourage them to promote use of tap water instead of bottled water to their customers. Vice President Normandy applauded this as a golden opportunity to capitalize on the very high quality we have and undertake efforts to make it even better. Mr. Harrington noting the Commission’s sentiments proposed to forward this report to the Mayor.

Public Comment

Ms. Jennifer Clary, Citizen’s Advisory Committee, noted that $20 million was already dedicated to water quality protection improvements in the Water System Improvement Plan (WSIP) and urged that any additional WSIP revisions avoid resulting in any reductions in the needed redundancies. Ms. Clary further pointed out that the voters approval of California Proposition 218 would most likely not allow discounted water rates being offered to restaurants as was proposed.

d) Wastewater Master Plan

Assistant General Manager of Wastewater Tommy Moala brought the Commissioners up to date with developments toward adoption of a Wastewater Master Plan. Mr. Moala recounted the many presentations, community meetings, and discussions that led to bringing the proposed elements of a new master plan forward. Mr. Moala noted that the next steps were to bring forward the program environmental review, organize a neighborhood based task force to provide input as these projects go forward and to provide the Commission with additional information as staff moves forward toward bringing the entire system up to a state of good repair. In addition, Mr. Moala noted that because of our combined storm and waste water system, San Francisco had one of the best sewer systems in the country. Mr. Moala further noted that the Commission in the course of development of the new master plan would be asked to consider various options to bring the system to a state of good repair, anticipate increased demands, and plan to respond to more stringent regulations.

Mr. Jon Loiacono next presented a more detailed review of the system as it had developed since the approval of the federal Clean Water Act of 1961 and discussed ways to maximize the great benefits deriving from our existing joint storm water and wastewater system. Mr. Loiacono noted that our sewers were aging and that as time went forward more and more of the system each year would require repair or replacement. Mr. Loiacono next outlined actions taken since adoption of the previous master plan in the 1970’s beginning with a series of workshops in 2005 and then discussed each of the steps taken to address level of services described in 2006 recommendations for specific problems such as the Southeast Plant Digesters. Mr. Loiacono noted that conducting the overall environmental review part of this process was expected to take two years.

Mr. Loiacono next presented an overview of possible projects for the Commission to consider, noting that not all of these could or would be taken up right away but that developing this list served to focus attention on thinking about the priorities for what needed to be done. Mr. Loiacono began with a discussion of how best to provide for the seismic safety and structural soundness of our facilities noting that the current replacement cycle would require 180 years to complete and that this needed to be speeded up to more closely match the expected life expectancy of the sewer structures. Next, Mr. Loiacono discussed issues involved in providing a way to improve the redundancy of the force main that transmitted 60% of the materials sent from Northpoint to the Southeast Facility. Mr. Loiacono next discussed ways that staff routinely tested the system so to be sure that capacity was always available.

In response to questions by Commissioner Hochschild, Mr. Loiacono agreed that the term replacement cycle reflected that currently it would require 180 years to completely replace that entire system and explained that San Francisco’s sewers were made in many ways, from several still functioning 19th and early 20th century brick structures to the contemporary commonly used reinforced concrete pipes.

Mr. Loiacono next discussed plans to guarantee system operational reliability and flexibility so that the system could accommodate 80% of any given storm flow with a repeat of the flooding as had occurred around Cayuga Avenue area following a particularly severe storm system. Mr. Loiacono next discussed options to minimize neighborhood impacts such as fixing the digesters at the Southeast plan, solves any odor problems, and reduces risk of system overflows. Next, Mr. Loiacono discussed proposed plans to address flooding risk as well as redirect flow from the Southeast Plant to the west side through a Cayuga Diversion Project and then out through the Oceanside Facility into the ocean outflow. Next, steps to limit odors and replace the aging digesters at the Southeast Facility were discussed. Mr. Loiacono noted that an aspect of conserving natural resources, the methane gas generated by the digesters was collected and used to power the facility as well as reuse of all of our bio-solids, and expanded use of recycled water.

Next, Mr. Loiacono discussed plans to upgrade secondary treatment at the Southeast Plant, improve the clarifier, and undertake stronger odor control steps. In response to a question by Commissioner Hochschild, Mr. Loiacono described how the treatment process works, including how screened materials and sand were removed to protect equipment at the headworks. He noted that should the diversion project go forward there could be a significant treatment capacity increase as well as plans to upgrade the North Point Plant, increase the capacity of the Force Main located in the middle of the Embarcadero, as well as have ability to make repairs much less difficult.

Next turning to the collection system, Mr. Loiacono outlined the ongoing sewer repair and replacement activities beginning with a discussion of the complexities involved in repairing the brick sewers, and what was being done to extend their life and address damage in the transfer storage boxes primarily due to corrosives in the sewage. Various means to trap odors were then discussed. Mr. Loiacono next recapped ongoing Low Impact Development (LID) projects previously outlined in detail for the Commission by Rosie Jencks. Next, Mr. Loiacono discussed several options to harvest and recycle storm water at lower cost as well as providing a complementary resource for water. It was noted that the Oceanside Plant had the largest eco-roof in our system. Use of micro-filters and reverse osmosis to process water was then discussed.

Then Mr. Loiacono described the deterioration of the Southeast Facilities digesters and provided a brief overview of the options currently being reviewed to replace the digesters removing them further from homes, controlling odors, and increasing capacity to process bio-solids to meet the requests for more processed bio-solids by our customers. Mr. Loiacono then discussed the steps involved in recycling the bio-solids generated.

In reply to questions by Commissioner Hochschild, Mr. Loiacono discussed the various sites proposed for the new Southeast Facility, the bringing on board of design consultants to help prepare for the environmental reviews while working with neighborhood organizations, create a neighborhood advisory body to provide community input as plans were developed over the period up to when the digesters could be replaced. Mr. Loiacono then described the design of the proposed digesters.

Mr. Loiacono then discussed the details of repair and replacement activities focusing particularly on the benefits likely to be derived from the proposed 12 ft. Alemany Diversion Tunnel that would capture run-off from the former Cayuga Creek currently trapped by I-280 into a tunnel that would flow under the roadway and into a system that would also, in dry weather, divert about 10,000,000 gallons to outflow at Oceanside as well. General Manager Harrington noted that addressing the existing flood control issues as well as providing capacity to divert flow from the Southeast Facility to Oceanside was a more interesting concept that would add greater value to the project. Mr. Loiacono noted that this plan would be further developed and brought back to the Commission for its review.

Mr. Loiacono next discussed the building of a bayside recycled water plant, North Point Plant upgrades, creation of redundancy in the Channel Force Main, and various options to deal with storm flow and provide recycled water for use in the South of Market, Mission Bay, and later perhaps the Hunter’s Point Shipyard redevelopment area. Mr. Loiacono requested as a necessary first step that a digester consultant be hired to work with staff and the community to begin moving this process forward. Mr. Loiacono concluded noting that as each of these various plans were further developed and the environmental review went forward that the elements of a revised Wastewater Master Plan would be brought back to the Commission for input, review, and finally approval hopefully in 2012. The program costs were estimated over the fifteen year life of the series projects, beginning, perhaps with the digesters in 2010, was reported estimated to be $1.9 to $2.6 Billion depending on escalation resulting from how projects were scheduled. In response to a question by President Caen, Mr. Loiacono described the new digesters as of a conventional design rather than the oversized egg shaped types that would be in scale in the neighborhood as well as facilitate ease of cleaning; particularly the sand removal required every five years. Various other projects designed were briefly described.

Responding to this extensive presentation, Commissioner Hochschild then asked what our options were and what the risks of doing nothing were. Mr. Moala responded that doing nothing would mean crumbling sewers and failing digesters with increasing numbers of sinkholes from line collapse. Mr. Moala noted we have a good system but must now act to maintain it. Vice President Normandy asked what the Commission can do to get this essential renewal process underway, suggesting that the critical projects be fast tracked as well as speeding up the rate of annual repairs to set a framework for taking action. Mr. Harrington reported in response that the digesters project will go forward right away and that environmental impact analysis would go forward on an array of options in preparation of Commission review and action.

President Caen citing a lengthy series of previous environmental reviews and reports over a number of years on the system’s needs asked if any thing had been done to follow them up. Mr. Loiacono noted that every project has its required environmental review and that doing a programmatic review provided a wider view of the needs of the entire system. In response to a question from Vice President Normandy about using property adjacent to the Zoo as a revenue source to fund some of these projects by declaring it surplus, Mr. Harrington responded staff would look into it.

In response to a question by Commissioner Hochschild, Alex Lantsberg, Chair of the Citizens Advisory Committee (CAC), recalled the rationale advanced for employing the master plan model and noted that staff had been actively moving forward on a wide array of these issues. Mr. Lantsberg also observed however that it was critical to move the Master Plan forward. He noted on the digesters that the community and staff we untied in wanting to begin addressing the design and location programs; regarding Low Impact Development (LID), that hard performance goals should be established so that it becomes a fundamental proactive element in system wide projects; regarding the issues underlying the Alemany Diversion proposal, Mr. Lantsberg urged that environmental restoration of natural hydrology should be seen as a basic component of planning and steps should be taken to acquire key properties to promote restoration over time. Concluding, Mr. Lantsberg urged that the shift of materials from the Southeast to Oceanside not result in lower treatment levels and applauded the excellent outreach being done by SFPUC Communications staff.

Vice President Normandy asked if it were realistic that the digester project can go forward in 2008. General Manger Harrington agreed this was so. In response to a question by Commissioner Hochschild, Mr. Loiacono proposed to look into any requirement prior to environmental review as to specific materials to be used. Responding to a question by President Caen, Mr. Loiacono noted that the digester would go forward but that it would behoove us to at the same time upgrade sludge processing to a higher standard. President Caen then without objection recommended that the digester project replacement go forward without delay.

Public Comment:

Ms. Jennifer Clary, Clean Water Action, urged that low impact development be kept fully integrated into collection system development and noted that the decision concerning the Cayuga diversion would have a great impact on the overall cost estimated for this project.

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

BAWSCA Update

Mr. Art Jensen applauded the detailed presentation of the water status report and reported that BAWSCA was committed to move forward aggressively with conservation activities. Mr. Jensen noted that BAWSCA had been participating in the Water Quality Protection Plan and looked forward to reading the report.

Commissioner Sklar joined the meeting at 1:20P.M.

CONSENT CALENDAR

9. Moved by Commissioner Hochschild, seconded by Vice-President Normandy, to adopt items (a through c) listed under the Consent Calendar; passed (5-0 Caen, Normandy, Sklar, Hochschild, and Crowley) unanimously.

a) Resolution No. 08-0087: 
Approve the plans and specifications and award Contract No. WD-2569, City Distribution Division As-Needed 2008/2009 Annual Paving Contract No. 1, in the amount of $2,315,143 to the lowest, qualified, responsible and responsive bidder, A. Ruiz Construction.

b) Resolution No. 08-0088: 
Accept work performed for Wastewater Enterprise, Repair and Replacement (R&R) Program-funded Contract No. WW-368, Rhode Island /23rd /Utah /York/Texas Streets Sewer Replacement and Street Reconstruction, by J. Flores Construction, approve Modification No. 1 (Final) increasing the contract by $49,585.68, for a total contract amount of $1,355,714.68, and authorize final payment, in the amount of $196,776.03, to the contractor.

c) Resolution No. 08-0089: 
Approve Modification No. 5 to CUW260 – Water Enterprise Water Main Replacement/Retrofit Program-funded Contract No. WD-2436R, Bernal Heights Pipeline Installation and Powhattan Ave. Improvements, with NTK Construction Inc., increasing the contract by $10,000, for a total contract amount of $4,813,549 with 119 calendar days non-compensable time extension for a total contract duration of 704 consecutive calendar days.

REGULAR BUSINESS

10. Discussion and possible action related to approve the plans and specifications and award Enterprise-funded Contract No. HH-927, Job Order Contract, Lighting Efficiency and Upgrade Services for San Francisco/Peninsula Areas (C-10 License), in the amount of $1 million and with a duration of two years, to the lowest, qualified, responsible and responsive bidder, Fluoresco Lighting & Signs Maintenance Corp.  Resolution No. 08-0090

Moved by Commissioner Hochschild, seconded by Vice President Normandy, to adopt the following resolution; passed (5-0 Caen, Normandy, Sklar, Hochschild and Crowley) unanimously.

11. Discussion and possible action related to approve the plans and specifications and award Enterprise-funded Contract No. HH-928, Job Order Contract, Lighting Efficiency and Upgrade Services for San Francisco/Peninsula Areas (C-10 License), in the amount of $1 million and with a duration of two years, to the lowest, qualified, responsible and responsive bidder, Torres Construction Corp.

Items #10 and #11 were taken up together.

Moved by Commissioner Hochschild, seconded by Vice President Normandy, to adopt the following resolution; passed (5-0 Caen, Normandy, Sklar, Hochschild and Crowley) unanimously.  Resolution No. 08-0091

12. Discussion and possible action related to approve a Master Equipment Lease/Purchase Agreement (“Agreement”) with Bank of America Leasing & Capital, LLC (“Bank of America”) in order to finance the issuance of $6,325,000 in Clean Renewable Energy Bonds (“CREBs”) for the installation of renewable energy equipment and authorize the General Manager of the San Francisco Public Utilities Commission (“SFPUC”) to execute and deliver the Agreement and other documents necessary to execute the Agreement

Finance Director Joseph Yew described this as a funding model authorized by law but infrequently used and explained the various small renewable energy projects that would be funded using the CREBS financing. Responding to a question by Commissioner Sklar as to why we wanted to use this model instead of the more flexible Power Purchase Agreement (PPA) model, Mr. Yew explained that this proposal had taken a good deal of time to put this financing together, identifying an investor, and arranging the financing. The General Manager noted that much of these funds were to reimburse funds already expended prior to the availability of the PPA and as the smaller projects were difficult to bundle in a PPA this kind of financing could be useful. Commissioner Sklar suggested he had no problem using this DC-3 model of financing if it worked but that all future projects would be better done if agglomerated together in a PPA, given its greater advantage. Commissioner Hochschild noted that the Power Purchase Agreement were the standard approach being most widely used.

Moved by Vice President Normandy, seconded by Commissioner Crowley to adopt the following resolution; passed (5-0) unanimously.  Resolution No. 08-0092

13. Discussion and possible action related to approve Water System Improvement Program (WSIP)-funded Project No. CUW36501, Cross Connection Controls Project; and adopt the Final Mitigated Negative Declaration (MND), the required California Environmental Quality Act (CEQA) Findings, and the Mitigation Monitoring and Reporting Program (MMRP) for the project.

Ms. Irina Torrey, Bureau of Environmental Management, noted that this was the first Water System Improvement Program that was not under a categorical exemption and that from now forward there would be a large number of these reports to review and approve.

Ms. Torrey noted that there should be an addition to the language in the final resolved clause to clarify that the Supervisors were the body that actually took the final action to approve. Deputy City Attorney Noreen Ambrose proposed amending the final resolved clause of the resolution by adding the phrase on Page 3 “following final action by the Board of Supervisors.”

Moved as amended by Commissioner Sklar, seconded by Commissioner Crowley, to adopt the following resolution; passed (5-0) unanimously.  Resolution No. 08-0093

CONSTRUCTION CONTRACTS

Close

14. Discussion and possible action related to accept work performed by Ranger Pipelines Inc. for Water Enterprise, Water System Improvement Program-funded Contract No. WD-2495, Fulton at 6th Avenue, 30-inch Water Main Replacement, approve Modification No. 5 (Final), increasing the contract by $91,316.61 for a total contract amount of $2,993,356.74, and a total contract duration of 365 consecutive calendar days; and authorize final payment, in the amount of $236,418.62, to the contractor.  Resolution No. 08-0094

15. Discussion and possible action related to accept work performed by Cal State Constructors, Incorporated for Water Enterprise Water System Improvement Program-funded Contract No. WD-2496 McLaren Park Steel Tanks Seismic Upgrade, for a total contract amount of $6,618,532.18, and with a total contract duration of 500 consecutive calendar days; and authorize final payment, in the amount of $40,753.52, to the contractor.

Items #14 and #15 were taken up together at Commissioner Sklar’s suggestion.

Moved by Commissioner Crowley, seconded by Commissioner Hochschild, to adopt the following resolution; passed (5-0) unanimously.  Resolution No. 08-0095

Award

16. Discussion and possible action related to approve the plans and specifications and award Water Enterprise Water System Improvement Program-funded Contract No. WD-2564, Harry Tracy Water Treatment Plant – Short Term Improvements Phases 2 and 3, in the amount of $13,824,000, to the lowest, qualified, responsible and responsive bidder, NTK Construction, Inc.

Commissioner Sklar noted that this was a big contract and in response Assistant General Manager of Infrastructure Harlan Kelly agreed that staff were pleased with the performance of this contractor.

Moved by Commissioner Sklar, seconded by Commissioner Hochschild, to adopt the following resolution; passed (5-0) unanimously.  Resolution No. 08-0096

PROFESSIONAL SERVICE CONTRACTS

Award

17. Discussion and possible action related to approve Amendment No. #2, to Water Enterprise, Water System Improvement Program Agreement No. CS-804, Engineering Services for the Alameda Siphon No. 4, with Black and Veatch/AGS Inc., A Joint Venture Company to perform additional engineering services, and authorize the General Manager of the San Francisco Public Utilities Commission to execute this amendment increasing the agreement by $2,400,000, for a total agreement amount of $5,230,607 and with a time extension of 365 consecutive calendar days, for a total agreement duration of 56 months. An additional amendment will be needed prior to the construction phase to request funding for the consultant to provide design engineering services during construction.

Commissioner Sklar noted that this item called attention to issues of bifurcated design management and noted that it would be preferred to take action of correct designs first in concept, then on paper, then when in progress and lastly when you have to tear out. Commissioner Sklar urged systemic use of a matrix model of design management with a single manager overseeing the project manager and other managers to be sure that errors are identified and corrected as early in a process as possible.

Moved by Commissioner Sklar, seconded by Commissioner Hochschild, to adopt the following resolution; passed (5-0) unanimously.  Resolution No. 08-0097

CLOSED SESSION

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

No comment was offered on the closed session items.

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

Moved by Vice President Normandy, seconded by Commissioner Hochschild, to assert the attorney-client privilege; passed (5-0) unanimously.

President Caen called a brief recess at 1:57P.M. prior to going into the Closed Session.

The Commission went into Closed Session at 2:10 P.M.

Present in the Closed Session were President Caen, Vice President Normandy, Commissioners Sklar, Hochschild, and Crowley as well as Deputy City Attorney Noreen Ambrose, Katherine Lewie, Danny Cheiu, General Manager Ed Harrington, Assistant General Manager Michael Carlin, Irina Torrey of the SFPUC Bureau of Environmental Management, and Commission Secretary Michael Housh.

20. Threat to Public Services or Facilities (Ambrose) Consultation with: Agency Chief of Security concerning security of SFPUC Water and Power Systems.

21. Conference with Legal Counsel – Pursuant to California Government Code Section 54956.9 (b) and (c) and San Francisco Administrative Code Section 67.10 (d) (2) (Ambrose)

Anticipated Litigation: As Defendant. Two Cases

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

Resolution No. 08-0098:
Melba Smith, City Attorney File No. 08-01305
Filed November 29, 2007.

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

Resolution No. 08-0099:
Transdyn/Cresci v. City and County of San Francisco, Alameda County Superior Court #JCCP004364, originally filed JMB Construction v. Transdyn/Cresci Joint Venture et al. in San Francisco Superior Court May 29, 2003.

Following Closed Session, the Commission reconvened in Open Session at 2:59 P.M.

24. Announcement following Closed Session.

Following Closed Session, President Caen announced the actions taken during Closed Session as no action on Item 21, that Item 22 was discussed, and items 23, and 24 were settled.

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

Moved by Commissioner Hochschild, seconded by Vice President Normandy, not to disclose the discussions during Closed Session; passed (5-0) unanimously.

26. Discussion and possible action related to approve the selection of Jacobs Associates; award Water Enterprise Water System Improvement Program-funded Agreement No. CS-912, New Crystal Springs Bypass Tunnel Construction Management Services, to provide construction management services; and authorize the General Manager of the San Francisco Public Utilities Commission to negotiate and execute a professional services agreement with Jacobs Associates for an amount not to exceed $9,000,000, and with a duration of up to 42 months, or, in the event negotiations are not successful or City requirements are not satisfied, to negotiate and execute a professional services agreement with the next highest ranked proposer.

In response to questions by President Caen and Commissioner Sklar, Mr. Kelly outlined the how this construction management contract had been awarded and how it was expected to function. Vice President Normandy, seconded by Commissioner Sklar proposed amending this item to read in the final resolved clause following the words “up to forty-two months” to read, “ provided that that expenditures be limited to pre-construction activities until such time as the Commission reviews and considers the final EIR and determines or not to go forward with this project.”

In response to further questions by President Caen and Commissioner Sklar, Mr. Kelly explained how use of a multiplier provided a mechanism to help insure that the SFPUC got the very highest quality work performed for the most reasonable price not just the cheapest bidder. Contracts Manager Ivy Fine proposed to provide the Commissioners with the specific multiplier that was used in this case resulting in this selection. Commissioner Sklar noted that In future it would be useful to have this information available. General Manager Harrington also noted that the term overhead rate was frequently also used to describe this figure.

As amended moved by Commissioner Sklar. seconded by Vice President Normandy to adopt the following resolution; passed (5-0) unanimously.  Resolution No. 08-0099

There being no further business to discuss, the meeting was adjourned at 3:07 P.M.

Michael Housh
Secretary