MINUTES REGULAR MEETING Tuesday, September 9, 2008 1:30 P.M. City Hall, Room 400 1 Dr. Carlton B. Goodlett Place COMMISSIONERS The Honorable Ann Moller Caen, President The Honorable F. X. Crowley Vice President The Honorable Francesca Vietor

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. Administration of the Oath of Office to the new Commissioners

Deputy Clerk of the Board of Supervisor Madeleine Licavoli administered the oath of Office concurrently to all three Commissioners:

The Honorable Ann Moller Caen
The Honorable F.X. Crowley
The Honorable Francesca Vietor

Commissioner Caen as senior Commissioner assumed the Chair and called the meeting to order.

2. Call to Order: 1:36 P.M.

3. Roll Call – Caen - Crowley - Vietor (present)

4. Discussion and possible action on a Motion to suspend Rule #6 of the Rules of Order of the San Francisco Public Utilities Commission to allow for the election of officers at a duly noticed meeting other than the first regular meeting after the 15th day of January, and, subject to the approval of that Motion, discussion and possible action on the election of the President and Vice President of the Commission. (Ambrose)

Public comment: There was no public comment.

Moved by Commissioner Vietor, seconded by Commissioner Crowley, to suspend the Rules and move to an immediate election of officers; passed 3-0 AYE (Caen, Crowley and Vietor) unanimously.

Moved by Commissioner Vietor, seconded by Commissioner Crowley nominated Commissioner Caen to serve as President and Commissioner Crowley as Vice President; 3-0 AYE (Caen, Crowley Vietor) unanimously.

Public comment: There was no public comment.

5. Discussion of and possible action to revise the Commission’s Rules of Order amending Rule #6 concerning the election of officers to change the date set for the annual election of officers from the first regular meeting after the 15th day of January, to the first regular meeting after the 1st day of August to reflect the change in appointment date and terms in office of the San Francisco Public Utilities Commissioners in conformity with those established by Proposition E (June 2008).

The Commission Secretary noted that the proposed change in the Rules of Order was calendared at this meeting in order to meet the requirement that revisions to the Rules of Order be noticed 10 days prior to adoption and clarified that the date for the election of officers should be set following the 1st day of August rather that the 15th of August each year in order to conform to the requirements of Proposition E (June 2008).

Moved by Vice President Crowley, seconded by Commissioner Vietor to adopt the revision to the proposed change in Rule 6 of the Commission’s Rules of Order and continue the item for adoption at the next regular meeting of the Commission; 3-0 AYE (Caen, Crowley Vietor) unanimously.

Public comment: There was no public comment.

6. Minutes of the July 22, 2008, Regular Meeting

The Commission Secretary Michael Housh reported that as there were only two Commissioners currently serving who had participated in the regular July 22, 2008, meeting and as action to adopt the Minutes required approval by three Commissioners who had been present, it would not be possible to approve the minutes of the last meeting of the SFPUC Commission as it had been constituted since adoption of the 1932 City Charter prior to the August 1, 2008, restructuring mandated by adoption of Proposition E (June 2008).  Mr. Housh reported he would accept corrections or clarifications offered by Commissioners and then post the July 22, 2008, Minutes with an explanatory notice.

7. Public Comments

Members of the public may address the Commission on matters that are within the Commission’s jurisdiction and are not on today’s agenda.

There was no public comment.

8. Communications

9. Other Commission Business

President Caen requested that General Manager Ed Harrington request staff to prepare a report to the Commission concerning the issues related to water storage capacity given ongoing concerns with the impact of climate change, anticipated increases early runoff, and the need to capture and retain as much rainfall as possible to meet anticipated system needs given the long-term likelihood of continued dry conditions.

10. Report of the General Manager

a) Commendation for Greasecycle Program – Wastewater Enterprise (WWE)

General Manager Ed Harrington introduced Bruce Wolfe, Executive Officer of the Bay Area Regional Water Board. Mr. Wolfe then formally presented the Dr. Teng-Chung Wu P2 Award certificate to the San Francisco Public Utilities Commission WWE Source Control Division Biofuel Program (SFGreasecycle) for their Greasecycle Program to Assistant General Manager of Wastewater Tommy Moala.

Mr. Moala then thanked and recognized Acting Division Manager WWE, Collection Systems Division Lewis Harrison and Biofuel Coordinator Karri Ving for their dedication, skill, and hard work which had done much to make this program a success.  Mr. Wolfe observed that the Dr. Teng-Chung Wu P2 Award was established by the Regional Water Quality Control Board (Water Board) to promote excellence in Wastewater Pollution Prevention programs.  He further commented that this award recognizes significant action taken that causes a net reduction in the use or generation of a hazardous substance or pollutant discharged into water.  Mr. Wolfe noted the SFPUC WWE Source Control Division Biofuel Program (SFGreasecycle) was selected based on: • Leadership and Innovation • Commitment• Measurable Results• Benefit to Environment, Community, or Workers.

Mr. Moala reported that since November of last year, the program has hand collected over 100,000 gallons of used cooking oil from 500 restaurants, hotels, high schools, hospitals, churches, ships and household kitchens. Mr. Moala reported this program has a direct impact on protecting our sewers as well as leading San Francisco toward energy self-sufficiency.

b) Mayor’s Executive Order on Energy Efficiency Update

Mr. Harrington introduced Assistant General Manager of Power Barbara Hale for an update concerning the staff efforts to support the Mayor’s March 2008 Energy Conservation Executive Directive calling for an overall 5% goal to reduce energy use by City Departments.  Ms. Hale reported on the Municipal Energy Efficiency Program and presented an update on the use of $1.86 million allocated for SFPUC energy conservation activities in the FY 08-09 Budget to carry forward energy conservation program audits and discussed in detail implementation of various energy conservation projects in several General Fund Departments.

Ms. Hale also highlighted the efforts to promote installation of renewable energy facilities on city buildings such as police and fire stations, libraries, and Recreation and Park Department buildings to promote providing an increased share of city government energy needs from renewable resources.  In response to questions from Commissioner Vietor about City Departments being permitted to redirect budget savings generated by their embracing energy conservation, Ms. Hale noted a promise by Mayor Newsom to consider ways these savings could be shared and applied to other Departmental needs.  Ms. Hale next highlighted on a suite of supportive services that SFPUC staff were providing to the General Fund Departments to identify accurately how much energy they were using, where they were using it, and how to take quick action to reduce their energy use.

Responding to another question by Commissioner Vietor, Ms. Hale reported that as a result of the Commission’s early leadership in directing SFPUC staff to move quickly internally to implement energy savings measures the SFPUC was well ahead in making its operations more energy efficient.  Additionally, Ms. Hale then outlined a safe disposal/recycling program already in place to provide proper disposal of the mercury filled newer types of energy efficient lamps.  In answer to a question by Vice President Crowley, Ms. Hale confirmed that city traffic signals had all been retrofitted to higher energy conservation models and that there were pilot programs being evaluated in the Civic Center and the Sunset to gain better understanding of the potential benefits of using efficient LED street lighting to reduce the city’s energy use.

d) Water Conservation Public Service Announcement

Assistant General Manager of External Affairs Laura Spanjian reported on the ongoing second year activities of Communications very successful “Water Saving Hero’s” public awareness and education campaign that has resulted in a 13% decrease in water use system wide.  Ms. Spanjian noted that this achievement earned a $1 million grant to fully fund the second year of the water conservation program allowing it to operate for two years for the cost of one to the SFPUC.  Ms. Spanjian then presented three Public Services Announcements (PSAs) currently being shown on cable channels as an additional media element in this year’s water conservation “Water Saving Heroes” Program as funded by the grant from the State Department of Water Resources. The Commissioners lauded the humorous and educational presentations and commended staff for their excellent work.

c) 525 Golden Gate Avenue Report

Mr. Harrington continued this report to a future meeting.

CONSENT CALENDAR

11. The San Francisco Public Utilities Commission hereby ratifies the determinations made by the General Manager on the following action items during the period between August 1, and September 9, 2008 when there was no quorum of the Commission in office and assigns to each the resolution number indicated:

Public Comment: There was no public comment.

Moved by Vice President Crowley, seconded by Commissioner Vietor, to ratify items from the August 12 and August 26 meeting listed under the Consent Calendar; passed (3-0 Caen, Crowley and Vietor) unanimously.

Resolution No. 08-0143:
Accept work performed for Wastewater Enterprise, Repair and Replacement (R&R) Program-funded Contract No. CW-378; Water Pollution Control Division Elevator Repair and Maintenance, by Thyssenkrupp Elevator Corporation, for a total contract amount of $264,518.31, and authorize final payment, in the amount of $43,321.21, to the contractor.

Resolution No. 08-0144:
Approve Modification No. 6 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 duration by 42 calendar days non-compensable time extension for a total contract duration of 746 consecutive calendar days.

Resolution No. 08-0145:
Approve Modification No. 1 to Water Enterprise Water System Improvement Program-funded Contract No. WD-2476 East-West Transmission Main, with Ranger Pipelines Incorporated, increasing the contract by $2,097,255 for a total contract amount of $22,026,603.

Resolution No. 08-0146:
Approve Modification No. 1 to Water Enterprise Water System Improvement Program-funded Contract No. WD-2500 Palo Alto Pump Station Upgrade, with JMB Construction Inc., increasing the contract by $0, for an original total contract amount of $3,671,000, and with a time extension of 52 calendar days for a total contract duration of 442 days.

Resolution No. 08-0147:
Approve Amendment No. 2 to Water Enterprise (SFPUC 08-105 as amended) Water System Improvement Program-funded Agreement No. CS-741, Program Environmental Impact Report, with ESA+Orion Joint Venture to conduct additional technical services required to complete the environmental review process, and authorize the General Manager of the San Francisco Public Utilities Commission to execute this amendment increasing the agreement by $1,300,000, for a total agreement amount of $7,390,000, and with a time extension of 212 consecutive calendar days, for a total agreement duration of 1949 consecutive calendar days.

Resolution No. 08-0148:
Approve Amendment No. 1 to Water Enterprise Water System Improvement Program-funded Agreement No. CS-820, Engineering Services, New Irvington Tunnel, with URS Corporation to provide additional final design and construction contract documents; and authorize the General Manager of the San Francisco Public Utilities Commission to execute this amendment increasing the agreement by $1,403,000, for a total agreement amount of $9,998,561 to complete Design Phase services.  After completion of Design Phase services, staff will make a request for a future amendment to Agreement, CS-820, Engineering Services for New Irvington Tunnel, with URS Corporation to secure design engineering assistance during the Bid and Award Phase and for Construction Phase support services.

Resolution No. 08-0149:
Action related to the selection of Cornell University; award Agreement No. CS-933, Large Scale Testing of Fault Rupture Effects, to provide specialized engineering and laboratory testing services; and authorize the General Manager of the San Francisco Public Utilities Commission to negotiate and execute a professional services agreement with Cornell University, Office of Sponsored Programs for an amount not to exceed $370,000, with a duration of eleven months.

Resolution No. 08-0150:
Approve settlement with State Farm Insurance Company as subrogee for Albert SooHoo, City Attorney File No. 08-W0016-4, Filed December 19, 2007.

Resolution No. 08:0151:
Approve settlement with Laurence Tam/Gregory J. Bulliung, Esq., City Attorney File No. 08-00191, Filed July 24, 2007.

Resolution No. 08:0152:
Approve the plans and specifications and award Enterprise-funded Contract No. HH-932 Job Order Contract, General Engineering (A-license), Hetch Hetchy, in the amount of $3,000,000, to the lowest, qualified, responsible and responsive bidder, Yerba Buena Engineering and Construction.

Resolution No. 08-0153:
Accept work performed for Water Enterprise, Water Main Replace/Retrofit Program-funded Contract No. WD-2395, 8-Inch, and 24-inch Ductile Iron Main Installation in Valencia St., by Shaw Pipeline, approve Modification No. 5 (final) decreasing the contract amount by $182,777.52 for a total contract amount of $3,537,772.17 and with 56 calendar days time extension for a total contract duration of 600 consecutive calendar days and authorize final payment, in the amount of $341,226.83, to the Contractor.

Resolution No. 08-0154:
Accept work performed for Water Enterprise, Water Main Replace/Retrofit Program-funded Contract No. WD-2453, 8-Inch Ductile Iron Main Installation in Washington St., Clay St., and Pacific Ave. by J. Flores Construction, approve Modification No. 3 (final) decreasing the contract amount by $190,530.89 for a total contract amount of $1,349,141.52 and authorize final payment, in the amount of $96,557.36, to the Contractor.

Resolution No. 08-0155:
Ratify the Declaration of Emergency made by the General Manager of the San Francisco Public Utilities Commission, dated July 11, 2008 and approved by the President of the Commission.  Contract WW-484E Emergency Ratification Repair of 36" Force Main on Embarcadero.  The contract work consists of repairing the North Point Force Main on the Embarcadero at Jackson Street.

Resolution No. 08-0156:
Authorize the General Manager of the San Francisco Public Utilities Commission to request permission from the Board of Supervisors to accept and expend grant funds totaling $185,000 from the California State Coastal Commission (SCC); and to execute all required agreements.

Resolution No. 08-0157:
Authorize the General Manager of the San Francisco Public Utilities Commission to execute Amendment No. 1 to the Memorandum of Understanding (MOU) between the SFPUC and Bay Area Clean Water Agencies (BACWA) for participation in a Bay Area Regional Water Conservation Campaign funded by a grant from the Department of Water Resources, and further authorize the General Manager to provide up to $250,000 of funding to the Campaign which will be reimbursed by BACWA once grant funds are received; and provide up to $300,000 for media buys in the SFPUC service area.

Resolution No. 08-0158:
Authorize the execution of the First Amendment to the Memorandum of Understanding by and between the San Francisco Public Utilities Commission (SFPUC) and the North San Mateo County Sanitation District (NSMCSD), a subsidiary of the City of Daly City (Daly City) for the Harding Park Recycled Water Project (Project).  The scope of the MOU includes the provision of planning and engineering design services up to the construction phase of the Project, including the completion of environmental review pursuant to the California Environmental Quality Act (CEQA).  This amendment is requested to expand the scope of environmental analysis from a Mitigated Negative Declaration (MND) to an Environmental Impact Report (EIR), meet environmental requirements for geotechnical field investigations, and to incorporate SFPUC design standards into Project planning.  Additional funds in an amount not to exceed $168,674 are requested for this amendment.  The requested funding would be through the Water System Improvement Program (WSIP).

Resolution No. 08-0159:
Authorize the execution of the Third Amendment to the Second Memorandum of Understanding by and between the San Francisco Public Utilities Commission and North Coast County Water District to provide the SFPUC’s share of the cost to produce the Title 22 Engineering Report for the Pacifica Recycled Water Project.  Funding for this amendment is in an amount not to exceed $54,600, subject to City Attorney approval as to the form of the agreement.  Funds for the action are available under Water Supply Master Plan, Index Code 505021.

Resolution No. 08-0160:
Accept work performed by Mountain Cascade, Inc. for Wastewater Enterprise 5-Year CIP-funded Contract No. WW-405, Mission Street and Mount Vernon Sewer System Improvement, approve Modification No. 1, increasing the contract by $265,000.00, and approve Modification No. 2 (Final), decreasing the contract by $1,252,192.20, for a total contract amount of $8,447,317.40, and a total contract duration of 326 consecutive calendar days; and authorize final payment, in the amount of $464,952.21, to the contractor.

11a. 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.

President Caen requested that Item 11a. c) be separated from the Consent Calendar and acted on separately.

Moved by Commissioner Vietor, seconded by Vice President Crowley, to adopt items 11a-f except item c listed under the Consent Calendar; passed 3-0 AYE (Caen, Crowley and Vietor) unanimously.

a) Resolution No. 08-0161:
Approve the plans and specifications and award Power Enterprise Sustainable Energy Account-funded Contract No. HH-933, “SFPUC Efficient Lighting for 18 Port of SF Facilities”, in the amount of $661,959.02, to the lowest, qualified, responsible and responsive bidder, Flouresco Lighting-Sign Maintenance Corporation.

b) Resolution No. 08-0162:
Approve the plans and specifications and award CUW 260 Water Main Replacement/Retrofit Program-funded Contract No. WD 2567 8-Inch & 12-Inch Ductile Iron Main Installation in Coso Ave., Prospect, Stoneman, Manchester, Folsom, Ripley and Holladay Avenue in the amount of $1,333,000 to the lowest, qualified, responsible and responsive bidder, M Squared Construction.

c) Resolution No. 08-0166:
Reject all bids for Enterprise-funded Contract No. WD-2586 Job Order Contract, General Engineering (A-License), San Francisco/ Peninsula/East Bay to Hetch Hetchy, and authorize the General Manager of the San Francisco Public Utilities Commission to re-advertise the contract as Contract No. WD-2586R Job Order Contract, General Engineering (A-License), San Francisco/ Peninsula/East Bay to Hetch Hetchy; to receive and evaluate bids for said contract; and to return to the Commission with a recommendation for award.

d) Resolution No. 08-0163:
Approve the plans and specifications and award Enterprise-funded Contract No. WD-2587 Award Job Order Contract, General Construction (B-license), San Francisco/Peninsula/East Bay to Hetch Hetchy, in the amount of $3,000,000, to the lowest, qualified, responsible and responsive bidder, Southwest Construction & Property Management.

e) Resolution No. 08-0164:
Approve Amendment No. 1 to Wastewater Enterprise Master Plan-funded Agreement No. CS-787, Sewer System Master Plan (SSMP) Public Participation Services, with CirclePoint to provide support for the public participation/outreach program for the SSMP, and authorize the General Manager of the San Francisco Public Utilities Commission to execute this amendment with no increase in contract amount and with a time extension of 17 months, for a total agreement duration of 53 months.

f) Resolution No. 08-0165:
Approve Amendment No. 1 to Hetch Hetchy Water & Power Operating Budget for Repair and Replacement-funded Agreement No. CS-802.B, Environmental Analyses - Moccasin Penstocks Renovation, with Tetra Tech, Inc. extending its duration from August 8, 2008 to August 8, 2010, and authorize the General Manager of the San Francisco Public Utilities Commission to execute this amendment extending the agreement duration with a time extension of 730 consecutive calendar days, for total agreement duration of 1461 consecutive calendar days.

Next taking up Item 11a. c) President Caen asked why the bids had been rejected.  In response Assistant General Manager for Infrastructure Harlan Kelly reported that when the bids were received staff noted that these bids were a measurable degree higher than was usual or anticipated.  Following a survey of those responding to this bid proposal it was determined by staff that modification of several elements of the bid package could address issues that had resulted in the higher than usual bid amounts.  Therefore staff proposed to reject these high bids and go out to bid with a modified package.  In response to a question by Vice President Crowley, Mr. Kelly affirmed it was staff’s expectation that this modified bid proposal addressed all of the identified issues and the new bids would come in at a more typical cost.

Public Comment: There was no public comment.

Moved by Commissioner Vietor, seconded by Vice President Crowley, to adopt the following resolution; passed 3-0 AYE (Caen, Crowley and Vietor) unanimously.

REAL PROPERTY TRANSACTIONS

12. Discussion and possible action related to authorizing the General Manager of the San Francisco Public Utilities Commission to request the Director of Property to prepare and submit legislation to the Board of Supervisors to accommodate the sale of three (3) Utility Easements to Top Vision Development LLC, within Lot 240, Lot 237 and Lot 238 (later merged into Lot 418) in San Francisco County Assessor Block 4991, located on the intersection of Crescent Way and Executive Park Boulevard, San Francisco, CA.

Moved by Commissioner Vietor, seconded by Vice President Crowley, to adopt the following resolution; passed 3-0 AYE (Caen, Crowley and Vietor) unanimously. RESOLUTION NO. 08-0167

13. Discussion and possible action related to authorizing the General Manager of the San Francisco Public Utilities Commission to request the Director of Property to prepare and submit legislation to the Board of Supervisors to accommodate the direct purchase of 5.61 acres of land, also known as a portion of Tuolumne County Assessor Parcel 066-670-06, located on Priest Coulterville Road, Moccasin, CA, for $70,000 from Mark A. Salazar and Julie A. Salazar, Husband and Wife, as Community Property with Right of Survivorship. SFPUC Property Manager Gary Dowd noted that this was another opportune reasonably priced property acquisition to enable greater protection of our watershed. RESOLUTION NO. 08-0168

Moved by Vice President Commissioner Vietor, seconded by Commissioner Crowley, to adopt the following resolution; passed 3-0 AYE (Caen, Crowley and Vietor) unanimously.

CONSTRUCTION CONTRACTS

14. Discussion of and possible action to approve the plans and specifications and award multi-funded Contract No. WD-2543 North University Mound System Upgrade, Water Main Installation, Sewer Replacement and Pavement Renovation, in the amount of $13,529,370, to the lowest, qualified, responsible and responsive bidder, Shaw Pipeline Inc. RESOLUTION NO. 08-0169 Moved by Commissioner Vietor, seconded by Commissioner Crowley, to adopt the following resolution; passed 3-0 AYE (Caen, Crowley, and Vietor) unanimously.

CLOSED SESSION

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

No public comment was offered on any closed session item.

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

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

The Public Utilities Commission went into Closed Session at 2:32 P.M.

Present: President Ann Moller Caen, Vice President FX Crowley, Commissioner Francesca Vietor, General Manager Ed Harrington, Deputy City Attorney Noreen Ambrose, Assistant General Manager for Water Michael Carlin, Water Enterprise Special Projects Manager Sharyn Saslafsky, Deputy City Attorney Joanne Hoeper, and Commission Secretary Michael Housh.

17. 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.

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

Existing Litigation:
a) United States of America v. City and County of San Francisco, U.S. District Court, Eastern District of California, Case No. 2:05 CV 01693 DFL GGH, Filed August 22, 2005. (Ammons)

b) United States of America v. City and County of San Francisco, U.S. District Court, Northern District of California, Case No. I:07-cv-01300-LJO/DLB Filed September 6, 2007. (Lipton)

19. 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. 08-0147:
Greg Angilly, LLC & State Farm Insurance Company v. City & County of San Francisco - City Attorney File No. 08-02811, Filed April 8, 2008

Following Closed Session, the Commission reconvened in Open Session at 2:56 P.M.

20. Announcement following Closed Session.

Following Closed Session, President Caen announced that there was no action taken or Items 17, and 18 and Item 19 was settled during Closed Session.

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

Moved by Vice President Crowley, seconded by Commissioner Vietor, not to disclose the discussions during Closed Session; passed AYE 3-0 (Caen, Crowley and Vietor) unanimously.

22. Adjournment

There being no further business the meeting adjourned at 2:58 P.M.

Michael Housh
Secretary