Public Utilities Revenue Bond Oversight Committee
Contracting Working Group

MINUTES
 SPECIAL MEETING

Tuesday, August 15, 2006
 2:00 p.m. – 4:00 p.m.
1155 Market Street (between 7 & 8th Streets) 4th Floor
San Francisco, CA  94103

1. Call To Order and Roll Call

   Chair Aimee Brown called the meeting to order at 2:05 p.m. and roll call was taken. Present were Aimee Brown, Brian Browne and Patrick Sweetland. 

2. Discussion and Possible Action to Approve Minutes of the March 22, 2006 and April 18, 2006 Meetings. 

   Action on the minutes of the March 22, 2006 meeting was continued.  Mr. Sweetland moved to approve the minutes of the April 18, 2006 meeting and Ms. Brown seconded the motion.  Mr. Sweetland and Ms. Brown voted in favor of the motion and Mr. Browne abstained. 

3. Discussion and Possible Action About Financial Consultant Contract Alternatives.  

   In order to fulfill RBOC’s ongoing responsibility to review expenditures of revenue bond proceeds, it was generally agreed that RBOC could rely on Mr. Kuo’s report as a benchmark for future audits commissioned by the RBOC. While not precluding other future contracting options, it was also agreed that RBOC would use the services of the Controller’s City Services Division for the next audit. 

   The working group decided that they would recommend to the RBOC that the scope of the next audit focus on two areas. 

   First, the RBOC will select certain representative projects, other than the “Big Four”, which are in various stages (design, planning, construction) and in various geographic locations and ask the consultant to perform a similar analysis to each project as Mr. Kuo did for the Big Four in his report. These tasks are:

   i. Reconcile the initial project budget and the CIP adopted by the PUC in May 2002 and amended in August 2003. Reconcile the current (November 2005) project budget and the current WSIP
   
   ii. Obtain an explanation of the changes from the initial project budget to the current project budget.
    
   iii. Obtain reconciliation from PUC staff of the project budget and actual expenditures from the PUC’s program controls system (P3e) system to the FAMIS system. Review the reconciliation for appropriateness. Identify and provide explanations of significant reconciling items and/or where figures do not reconcile
   
   iv. Reconcile the CIP appropriations and transactions in the FAMIS system.
   
   v. Vouch a sample of expenditures to invoices
    
   vi. Verify that no expenses paid for with Proposition A funds were incurred prior to November 2002.
    
   vii. Identify any discrepancies noted in analyses detailed above and provide explanations.
   

   In addition, the consultant will be asked to examine how the projects contribute to the level of service goals established by the Commission; how the components of the total project cost were developed, in particular the contingency component; and the process for moving contingencies among projects and whether this has been done for the selected projects

   Second, the consultant will be asked to report on the decision-making process for moving projects out of the WSIP to R&R and identifying those projects that have been moved.  In addition, the consultant will be asked to examine the financial implications of moving projects out of WSIP to R&R.

   Mr. Browne urged the working group to consider commissioning an audit to confirm that the WSIP can be accomplished on the published schedule.  It was agreed that Mr. Browne would prepare a summary scope of services to describe what he had in mind.  It was also agreed that such an audit should be deferred to a future date.

   Ms. Brown asked for public comment.  Mr. Kalman expressed concern that the SFPUC doesn’t have an independent technical engineering consultant.

4. General Public Comment.

   Ms. Brown invited general public comment.  Mr. Kalman said he felt that the Kuo report was good and he commended the work of the RBOC and SFPUC Financial Services.

5. Adjournment

   Ms. Brown adjourned the meeting at 3:45 pm.