Public Utilities Revenue Bond Oversight Committee

MINUTES

Monday, October 2, 2006
9:30 a.m. – 11:30 a.m.
1155 Market Street (between 7 & 8th Streets) 4th Floor
San Francisco, CA  94103

Committee Members

Lisbet Sunshine, Chair
Aimee Brown, Vice-Chair
Brian Browne
Severin Campbell
David Sutter
Patrick Sweetland

1. Call to Order and Roll Call. Chair Lisbet Sunshine called the meeting to order and took roll call at 9:35 am.  All members were present and there was a quorum.

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 were no comments from the public.

3. Discussion and possible action concerning presentation on project controls by Kathy How, Program Control and Support Bureau Manager.

Ms. How distributed printouts on how P3E is used as a planning tool (attached hereto).  Change Control Procedures had been distributed earlier.  She explained that change control procedures exist for all project changes. She further clarified change order thresholds that trigger Commission approval, as follows. Time: If the dates of a phase change (ie., re-baseline) then Commission approval is required; if deadlines within a phase change then only senior management approval is required.  There are four phases in a project: planning, environmental, design, and construction. Changes in phase dates require Commission approval; activities within a phase can change without Commission approval.  Budget: An increase of >10% or to move money from one project to another it requires Commission approval, otherwise senior management approval is required for allocated or appropriated funds moved from one phase to another.   Monthly review meetings are held with project and bureau managers using CPM (critical path) tools.  Julie Labonte signs off on all budget and time changes.

Note: Brian Browne left at 9:55 am.

Mr. Sutter asked Ms. How some specific questions about the project control procedures. 

There were no comments from the public.

6. Discussion and possible action regarding (a) approval of Request for Proposals (RFP) to hire an auditor/financial consultant to review selected revenue bond disbursements, (b) authorizing the Controller’s office to issue such RFP to firms in the City Services Auditor Consulting Services pool, and (c) authorizing the Controller’s office to administer the selection process. (This item was taken out of order to accommodate Esther Reyes of the Controller’s office schedule.)

Ms. Reyes suggested RBOC consider a Request for Qualifications (RFQ) approach to engaging consulting services, wherein the RBOC could pre-qualify firms and select those with particular expertise to perform specific tasks in the future.  Mr. Sweetland stated that he thinks the contracting group was prepared to propose that the Committee issue the RFP as drafted and that the RFQ may be something to look at in the future. 

 There were no comments from the public.

5.  Report from the Contracting Working Group on August 15, 2006 and September 19, 2006 meetings – (This item was taken out of order.)

Aimee Brown said that the working group planned to recommend to the Committee that the next audit will include a scope of services similar to that under Mr. Kuo’s contract with representative projects in various stages of design and construction and regions so that there’s easy comparison from audit to audit.  In addition, the new RFP included Mr. Sutter’s suggestion that the consultants be required to talk directly to the Project Managers in addition to reviewing public documents.  The consultants would also be asked how the project contributed to the level of service (LOS) goals established by the Commission; how the components of the total project cost were developed; describe the process for moving contingencies among projects and whether this has been done yet; and describe the process for moving projects out of WSIP to R&R and related financial implications.  

Mr. Browne requested that the consultants be asked to confirm that the WSIP can be accomplished in the published schedule.  The working group asked Mr. Browne to prepare in writing a scope of work to be considered by the RBOC in the future. 

Mr. Sutter urged that the consultant be required to illustrate linear changes in project budgets, including contingencies, management reserves and escalation between the 2002, 2003 and 2005 adopted WSIPs.  Members concurred and Mr. Sweetland and Mr. Sutter agreed to draft the additional language to be included in the RFP.  

Mr. Steve Lawrence had submitted written comments via the Chair and Ms. Ostberg on the RFP which are included as part of these minutes.  Other than Mr. Lawrence’s comments, there were no comments from the public.

Mr. Sutter moved to proceed with the RFP (subject to his recommended changes) and use the Controller’s administrative services and refer the concept of the RFQ to the working group for further study.  Mr. Sweetland seconded the motion and the motion passed unanimously. 
 
4. Report from the Chair (This item was taken out of order.)
a. Presentation of Consultant’s Report on September 12, 2006 to Commission – Ms. Sunshine said that the first audit report (Kuo and Doyle) had been distributed to the Commission, the Mayor’s office and Controller’s office.  She presented the report to the Commission and there were no questions.
b. Wastewater Commercial Paper Program update (by Karol Ostberg) - Ms Ostberg reported that the program had been approved by the Commission and was going through the Board of Supervisors process.  Final authorization was expected by early December.  Ms Sunshine asked staff to respond to Steve Lawrence’s question (in his written public comment) regarding how recent sewer rate increases relate to the $150 million interim CIP.  

Public comment was requested and Mr. Kalman asked about a Charter Provision for Reserves and Ms Ostberg said that SFPUC has a policy to keep 25% of annual O&M on reserve but it is not a requirement.

7.  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 March 6, 2006, May 1, 2006, June 12, 2006 and August 7, 2006 meetings.

There were no comments from the public.

Mr. Sweetland moved to adopt the policy and with Mr. Sutter’s second, the item passed with all members present voting in favor of it. 

Note: Aimee Brown left at 11:30 am

8. Discussion and possible action to approve the minutes of the meeting held on August 7, 2006. 

There were no comments from the public

Mr. Sutter moved to adopt the minutes and Mr. Sweetland seconded and all members present were in favor. 

9. Discussion and possible action regarding proposed agenda(s) for next meeting(s)

Members suggested the following items be included in future meetings:  Presentation by Tony Irons or his staff of highlights of current WSIP Quarterly Report; Use of revenue generated from wastewater rates in relation to proposed CP issuance; update on RFP process; draft annual report reviewed; information request; 2007 meeting dates; election of officers.
    
Ms. Sunshine invited public comment and Mr. Kalman urged that Proposition P be strictly adhered to.
 
10. Adjournment – Ms. Sunshine adjourned the meeting at 11:40 am.