Public Utilities Revenue Bond Oversight Committee

MINUTES

Monday, June 12, 2006
9:30 a.m. – 11:30 a.m.
1155 Market Street (between 7 & 8th Streets) 4th Floor
San Francisco, CA  94103

1. Call To Order and Roll Call
   Chair Lisbet Sunshine called the meeting to order and roll call was taken.  RBOC members present were Lisbet Sunshine, Brian Browne, Severin Campbell, David Sutter and Patrick Sweetland.  Aimee Brown was absent.

2. Public Comment – Members of the public may address the RBOC on matters that are within the RBOC’s jurisdiction and are not on today’s agenda. 
   There was no public comment.

3. Report from the Chair 
   Chair Sunshine stated that she was proactively trying to help the Controller identify an appropriate appointee to RBOC, and hoped to have a new member by the August meeting.  She said that Severin Campbell suggested that Mike Bankhart who is with the California Park Trust might be interested in serving on RBOC.  Ms. Sunshine said she would pursue this lead and thanked Ms. Campbell for the suggestion.
   
   Chair Sunshine also reported that she, Aimee Brown and Bob Kuo met with General Manager Susan Leal, Tony Irons and Laura Spanjian on June 2, 2006 to brief them on the preliminary findings of the audit and to discuss how to communicate the report to interested stakeholders. Ms. Sunshine said that she felt SFPUC’s senior management appreciated RBOC’s work and feel strongly that the audit function of the committee was critical to maintaining a sense of confidence that the enormous WSIP was moving forward properly.  It was suggested that Mr. Irons provide regular briefings to RBOC to further the committee members ongoing understanding of the WSIP’s progress.  

4. Discussion and possible action concerning presentation by Bob Kuo and Larry Doyle regarding their final report entitled “Review of Water System Improvement Program Expenditures under PUC’s Commercial Paper Program”.  This item was continued from the May 1, 2006 meeting.
   
   Bob Kuo provided an overview of the report and findings. The first key finding is that the PUC has used commercial paper proceeds appropriately and it was an appropriate and cost effective tool. Another key finding was that the WSIP accounting in FAMIS and the Primavera system looked good so far and reconcile to each other. A third finding was that the quarterly reports, while generally good, could be improved and Mr. Kuo included specific suggestions in his report. Mr. Kuo suggested that the committee would want to periodically track the overhead rate and the costs of other departments that are charged to WSIP projects. Mr. Kuo also suggested that the committee be briefed on Program Development’s Change Control Procedures, which is to be released by the end of June.
   
   Ms. Sunshine asked for questions.  Mr. Sutter said he felt there was insufficient specifics and detail contained in the comparison of the scope and schedule changes for the four largest projects from May 2002 to November 2005.  Mr. Kuo said he relied on documents provided to him and that his report reflected the information available to him.  Mr. Sutter insisted that Mr. Kuo should seek further information on this topic and include it in the final report.  Ms. Sunshine expressed an interest in responding to Mr. Sutter’s request for more information, but was also concerned about the timing of the request given the upcoming expiration of Mr. Kuo’s contract.  Mr. Kuo suggested that the contract could be amended to reflect this additional work, or this could be flagged as another item to follow in the future.  Brian Browne suggested that, given the potential complexities of the additional information request, that the committee approve the report as is, and take up Mr. Sutter’s concerns with the Contracting Subcommittee.  Mr. Sutter added that he was concerned about services of other City departments and how they are being charged to WSIP/Prop A funds.  Mr. Kuo pointed out that one of his recommendations was for RBOC to review this issue on an ongoing basis.
   
   Ms. Sunshine invited public comment.  Mr. Kalman expressed frustration at trying to reconcile various reports. 
   The members discussed adopting Mr. Kuo’s report subject to incorporating Mr. Sutter’s additional request.  After some discussion, Patrick Sweetland made a motion to amend Mr. Kuo’s contract to include an additional 8 hours of work and schedule a special meeting in July to finally adopt the report.  This motion was passed unanimously.

5. Discussion and possible action about alternatives for contracting with a financial consultant to audit the PUC’s revenue bond and related expenditures upon expiration of existing contract on June 30, 2006 with Bob Kuo and Larry Doyle.  This item was continued from the May 1, 2006 meeting.
   
   Ms. Sunshine indicated that Ms. Brown, as chair of the Contracting Subcommittee, wanted to lead this discussion and therefore recommended that it be continued. Ms. Sunshine invited public comment on Item 5, and there was none. 

6. Discussion and possible action regarding RBOC information request policies and instituting a standing agenda item for consideration of questions and requests for information by RBOC members.  This item was continued from the May 1, 2006 meeting.
   
   Ms. Sunshine suggested continuing this item until Ms. Brown could participate and members could have the information request policy in front of them.  She invited public comment and there was none.

7. Discussion and possible action regarding proposed agenda(s) for next meeting(s)
   
   Mr. Sweetland suggested that the July meeting be limited to only Mr. Kuo’s report.
   
   Mr. Sutter suggested that the August meeting include a presentation by the Infrastructure Group relating to project staffing and the difficulty of getting contractors to bid on smaller projects.  He indicated a preference for written reports in advance.  Ms. Sunshine agreed that Mr. Irons could address this as well as provide an update on the Quarterly Reports.
   
   Ms. Campbell suggested that an agenda item be included to discuss the Change Control protocol and a general update on the Budget Analyst audit recommendations.
   
   Ms. Sunshine suggested that a future topic include a project manager’s (for one of the large projects) discussion of how a project budget is built.  Ms. Sunshine also requested a report from the Wastewater Subcommittee.  Ms. Sunshine invited public comment on this item.  There was none. 
   
   Ms. Sunshine referred to Item 2. and invited public comment.  Mr. Kalman again expressed his frustration at trying to reconcile various reports. 

8. Adjournment.