We have a quorum. Commissioners, before you, we have the minutes of november 12. Are there any additions or corrections . I would like to move the item. Second. Is there any Public Comment on this item . All those in favor. Aye. Opposed . The motion carries. Next item. Item 4 is general Public Comment. Members of the public may address the commission on matters that are within the commissions jurisdiction and are not on todays agenda. Mr. Decosta. Commissioners, today i want to give you my subjective opinion on some very important matters linked to the river. So any way you look at it, you have to go back years, thousands of years, to the tribes that preserved and protected and performed their sacred rituals. Very important when we talk about cultural competency. We talk about cultural competency, equity and resiliency but we dont know the meaning of those words. If we did, we would be more serious. So at times, there are some individuals, and im one of those, i like to talk about those issues in a general way, because the tribes are always asking me about the process. Served under three generals. I understand process. I did my best to bring the tribes to discuss issues that were linked to the army. And i even took some steps to bring them over here in this room and some of you all were witness to it. Im asking you or im requesting you that we find Common Ground just to have a meaningful discussion with the first people, the native american tribes on the river. Just to have a meaningful discussion and find Common Ground, because when we mix legalease and concepts, some vetted and some which are not vetted, and what happens is we hurt the feelings of the tribes. Theres a lot going over there. And those who should be reporting to you all exactly what is happening, because you all may not know this. I have the right people in the right place who report to me directly. So im requesting you all to look into this matter. Some of you all have an open heart and open mind and can do it. Thank you very much. Thank you. Is there any other comment . Public comment . Next item, please. Item 5 is communications. Commissioners, any comments . I want to thank mr. Richie for the rain coming today. [laughter] [off mic] so where are we here . Is there any Public Comment on our communications . Okay. Lets move along to the report of the general manager. I will start with the hetch hetchy Capital Improvement program. Mr. Wade. Good afternoon, commissioners. Dan wade, director of water capital programs. Pleased to report today on the First Quarter of the new fiscal year, 2019 2020 on the hetch hetchy Capital Improvement program. Can i have the slides, please . The highlights of the reporting period are listed here. Just briefly, they are now completed and the mountain tunnel Improvement Program mitigated negative received minor comment, just two comment letters on that, and ill speak to that in a moment. The Rehabilitation Project actually is complete with the construction that we plan to implement at this time. We actually decided in best interests of the city to delete the installation of the breakers from the scope. And ill speak to that in a moment as well. The aqueduct rehabilitation did achieve substantial completion. The early intake switchyard slope Hazard Mitigation was awarded to sierra mountain construction. I mentioned the mitigated declaration, ceqa acquisitioned Public Comment. We received those comments and the project was adopted by this commission on november 12. And so now that we have project approval, we actually advertise the project for construction bid. And as we speak, the meeting is taking place at moccasin today and tomorrow. For the rehabilitation, this project, after multiple attempts, the contractor to address these noncompliance issues and changeovers and will plan a future separate contract to come back and finish the scope of work that was originally planned under this project. Likely in about two years. For the aqueduct Rehabilitation Project, we did achieve substantial completion of construction for the diversion dam. We had representatives of the bay area Governments Association of bay area governments. Provided a grant of 3 million in drought relief so it was great to have him there to actually inspect the work. So we anticipate final completion of that project early next year. Dan [off mic] okay. He corrected me. The department of Water Resources. Is that right . Yes the grant was department of Water Resources through the association of bay area governments. Okay. The early intake slope Hazard Mitigation project has started construction and should proceed in september. This is a project really to protect this asset from rock falls from the adjacent hillside. You can see the person on the slope there scaling the rocks off in preparation for installation of rock netting to protect the switchyard. And we did receive a Hazard Mitigation grant of 900,000 from fema to focus on this project. And then lastly, the 2018 emergency repairs and imprim improvements. Most of the work has been complete for some time but we did have a couple activities that needed to wait until this fall due to operational restrictions. And so we were able to drive down the ledge lower. And we substantially completed the placement and installation of the debris barriers upstream in the diversion dam. We are in the midst of construction of a Flood Control downstream in the lower dam to protect the fish hatchery. So that work is anticipated to be complete. This report shows at the end of 2019. It will actually be january of 2020 is the latest report that i have. With that, i would be happy to take any comments or questions. All right. Questions from the public . Thank you. All right. Thank you. [off mic] yes. So at some point, when it comes to mountain tunnel, i have the initial reports of the inspection done by jacobs. And i want to know how much they were paid and what really did they do so that this has nothing to do with weight because later on a photo op and there was a decision we made whether to just fix the tunnel, do some repairs or build a brand new tunnel. So is there anywhere that we can have a debriefing from the inception when it was inspected today, how much we spent in extra to fix mountain tunnel . Or is that a silly question . No, its not a silly question. It seems to me that weve discussed this, have we not . Yeah. Yes, i believe we have okay. Then from the information act, im going to request the discussion or the gist of that discussion be sent to me for my information and the information of a few people. Whatever is going on, its kind of tied to the system improvement project, the southeast the southeast treatment plant. Power that is required so that thosedy gisters and all can be operated. I would like to have some sort of a discussion about the Energy Required for the digesters. Everybody knows that the digesters should have been in place a long time ago. But they are kicking the can down the street. And we come here, some of us come here who follow it. Its very difficult, its very convoluted to follow this, the topic about the digesters. But we want a recap as to, like, where we are heading to and where are we going to get the energy to operate the digesters . Because whatever ive been reading and even Steven Lawrence was here some time ago, its technology that, instead of having less energy, will be using more energy. And thats what i want to know. Thank you. Sure. Shortly we can get that to you. Any other Public Comment . Okay. Next item. So on the update on the pg e bankrupt and city acquisition offer, we dont really have an update for you. Theres been not a lot of activity in that area so we are going to pass on it. Its a standing item you requested to have on the agenda so we would go on the third item which is the operating and Capital Budget development update. And charles poll will be giving that. Good afternoon, commissioners, deputy chief financial officer. This is a brief update on the progress that we have made to date on our Budget Development work. As a reminder, we are working on updating our twoyear budget for fiscal 21 and 22, which is for the next two years. We did provide an overview to you at the outset of the Budget Development process back on september 10. You may recall that. And since that kickoff with you, weve done a lot of work. Theres been a lot of good work both on the operating as well as on the capital side over the past three months or so. And i have two slides that i would like to share with you. So just quickly, ill walk through the schedule again and the priorities that have been established back on september 10 when we met with you. And then talk a little bit about the progress on the operating and capital side. So heres the schedule. As noted here, we had a kickoff around labor day and had a kickoff with you on september 10. Budget systems were open for both operating and capital submissions and changes. And we are in the midst now of reviewing all of that material. So, again, both on the operating and capital side, we are working with the general manager to review all of what the various departments and bureaus submitted. That review will take us through december. As noted here, we have four budget hearings scheduled with you starting on january 9 to walk through the details of those budget proposals. We have budget adoptions scheduled for the 11th of february, thats a standard first meeting in february as our standard meeting for budget approval. And then once the Commission Approves the budget, we then submit it to the Mayors Office and the Controllers Office for their review. Their review will take us through the end of april, at which time our budget is packaged up and submitted to the board of supervisors on may 1. And all of this is per admin code in terms of the dates. And then at that point it becomes a public hearing process at the board of supervisors, and well have a hearing there to talk about the budget submittal, not only what you will hear in january but also what the mayors changes, potential changes could be on our proposal. We shared this slide with you back in september. I just wanted to share it with you again. This is serving as our framework or Budget Priorities as the budget work and development and Decision Making is coming together. So just as a reminder our Strategic Plan goal areas are serving as a solid framework for us to evaluate and make budgetary decisions. So again looking at Reliable Service and assets, organizational excellence, effective workforce, financial sustainability, stakeholder and Community Interest and environmental stewardship. These are all very important areas as described in our Strategic Plan, and we are using them to make budgetary recommendations and decisions. Then of course we have our commission policies, which you are familiar with. Environmental justice, community benefits, our policies, then we have our financial policies, the Fund Balance Reserve policy, the capital financing, the debt management, as well as the technology and records retention policies. All these are also being looked at as we are developing our projections and financial forecasts. And just as a reminder, the financial and Technology Policies have been reviewed and a summary of policy progress was provided to you on october 22 of this year. Again just as a precursor to us stepping into the budget work. In terms of the Budget Development enhancements, as noted here, thats an important thing we always want to do better every cycle we want to do things a little better. So we are looking at improved governance from our executive team. We have created a Budget Steering Committee, which has met multiple times. We also are looking at communicating our budget and working on how to do our story telling and clear themes. And you will see that when we bring the budget details forward to you. You will see broader themes than perhaps what you have seen in the past. So we are working on that internally to make sure that is clear. And then on the capital side, we have hired a consultant to look at how best practices, how we can do better in terms of our capital planing and how other best practices compare how we do that along with recommendations. So improvements on the Capital Planning fund as well. Can i ask you a question . On the previous slide . Yep so it seems like we are doing quite a bit more, which i really appreciate on disaster resilience, everything from earthquakes to climate, floods and sea level rise. I just want to make sure thats captured. I believe it is. It kind of crosses over Reliable Service and Community Interest, potentially environmental stewardship. But i want to make sure that conversation does continue to stay alive. Yes. That very much is a piece of our Capital Planning review, for sure. So as we are looking at our infrastructure and project planning, making sure we are asking that question, asking and answering that question in terms of project planning, thats very much a part of that effort. And then on this slide, youll see some of the themes that arement cooing together on the operating are coming together on the operating budget. So just quickly, this slide talks about on the operating slide and the progress weve made in pulling that those budget changes together, we did allocate a three percent increase for our operations and maintenance costs. I know thats an important thing for you commissioners to make sure we adequately fund our operation and maintenance costs. So thats an important thing for us. And as we built the base budgets for the next two years we wanted to make sure we are providing sufficient resources to handle that. So those amounts were provided as part of our base budget request. Then they were allowed the opportunity to submit additional budget requests that were over and above that three percent for levels of Service Scope increases or new Program Areas where they needed additional resources. So we are currently with the general manager, reviewing all these submittals and again that will take us through december, through middecember for us to be able to finalize and package up to present to you in january. As noted here, we had a number of meetings over the past few months, we had six baseline review meetings, which we started the whole process by discussing our Current Service levels so what are we doing today, how does that compare, are we meeting our service levels, are we exceeding them, not exceeding them, falling short. That was helpful for the general manager to understand as a precursor what potential gaps exist and to make sense of what the potential budget submittals might look like. Then weve also had ten separate Budget Steering Committee meetings to review not only operating budget strategy but how are we going to approach staffing, how are we going to approach Certain Program growth and that sort of thing, as well as peer review of all the agms operating budget submittals. The meetings have been long and interesting as we worked through all the details but i have to say theyve been very fruitful. As noted at the very end of this section, the tenyear Financial Plan will serve as an affordability check on all of this. We will of course look at what we can afford in terms of rates that have already been established to make sure whatever we bring to you in january is fundable and balanced. The last part is getting to the point i was raising earlier in terms of the emerging themes. Weve seen a number of emerging themes, and well work to make this clearer as we present these details to you, but recruitment is a big issue. We want to make sure we have sufficient staffing within our nhrs shop. Youll see requests for resources to help our recruitment team. The temporary to permanent conversions, that is a theme throughout the agency. We have a number of temporary positions that a. G. M. S would like to convert to permanent. We are looking to do that where it makes sense, stepping away from temporary positions into permanent ones. Health and safety is another area we are seeing throughout the agency. Resources, resource requests being added so we can aim to be a much safer organization. Wildfire mitigation, regulatory response and operations for new facilities and assets coming online. These are just some of the areas that you will see come forward to you in the various budget proposals. On the capital side, a lot of work also has happened there. We have had three Steering Committee meetings specifically to talk about capital and providing guidance on project development strategy, and weve had also had a separate Capital Working Group which is made up of enterprise, infrastructure and finance staff that have met five times over the past sixweeks to review existing project plans as well as to confirm any new project proposals as being appropriate. So the focus there is to look at our existing appropriation to make sure theres a plan on how to spend that and execute those projects before we request new. Thats a greater focus with this planning cycle. And as with the operating side, our Financial Plan will inform the affordability as it relates to capital spending. In terms of the amerging Capital Budget themes for water, we of course have local and regional Capital Needs which you will see. Some of those include dam safety as well as water supply diversification projects. On the ridge waterfront, youll see ssip updates as well as other waste water and main collection and replacement infrastructure needs. On the power front youll see local transmission distribution projects as well as energy efficiency. And then of course you will see clean power capital plans focus on generation. All of these are coming your way. This is a highlevel review of the good work thats happened thus far. With that, im happy to take any questions. I guess i have a question a couple slides back when you were talking about you were meeting and you were trying to tell a better story and do a better job of whats your ultimate goal there . What would be perfect for you . What would you like to see . I think we are a big agency, we do a lot of things, its quite complicated to talk about everything we do. We tend to focus on the individual functional areas as being all the various bureaus and water, power, sewer. We often, though, i think, dont spend enough time talking about the departmentwide story. So i think what youll see in this version of the budget effort is an effort to talk about a broader message or a broader theme versus the individual pieces of the organization. Sort of how it all fits together as a whole. Thats right, yeah. Thank you. I also think the affordability question is coming to mind. We have three separate enterprises. They have three separate sources of revenue but how do we integrate those together for the common customer who sees one bill . And how do they view it as the service we are providing. So thats what we are working hard as part of the budget. Thats good. A couple comments. First, and some of this is youve heard before, and its just a matter of reminding you that things are still on my mind that have always been on my mind. And one is for the new programs, one of the pressure points that we dont have is the bottom line profit kind of incentive, the private sector folks do. And as a substitute for that, one of the budgeting practices that helps enforce discipline is to pull the line on operating costs and wherever possible, fund new needs from savings in old areas that perhaps have been replaced by technology or we have figured out better ways of doing it. So as we go outside that envelope of your three percent on the operating and deal with new programs that need funding outside of that, one of the things ill be looking for is a clear and convincing effort to capitalize on whatever savings was in the operating budget are possible. And weve talked about this before about how you capture productivity opportunities within the municipal setting. So thats one thing. Similar to that, on temporary to permanent conversion, within the citys budgeting process, temporary positions dont count the same way permanent ones do, and there is a tendency just not to pay much attention to positions that are being put in for a temporary purpose. As we consider converting those to permanent, ill be looking for evidence that we have put that level of attention on as if it were a brand new position and making sure that its fully reflects our current needs. Third area is i think it was last meeting we approved a supplemental, which we ended up foregoing on a opportunity to cure a Fund Balance Reserve problem. And i want to make sure that as we put together the capital and operating budget for hetchy for the next year, that we restore the reserve to the policy level. Okay. And as we do that, i guess in the normal course of events, that wouldnt take effect until july 1 of next year. Once we have figured out how to do it, i would like to see us proceed the supplemental early in the year to get us and conform us with our own policy before the end of this fiscal year. And then the last, you mentioned transmission issues. One of the things thats been an issue for a long time is that we have some lowvoltage transmission that is essentially a stranded asset. And when we buy transmission from pg e, from newark into the city, we pay a postage stamp rate, which means it doesnt matter how far its going. It could be going from moccasin into the city, and wed pay the simon price as we are doing for transmission just from newark into the city. One of the things that does is it means the transmission that we already have that takes us down to newark is not productive financially. And thats especially true with lowvoltage we have in the system. I want to see as part of the budget presentation, a strategy for how we deal with those stranded assets. Thats an issue thats been percolating for a long time, and we havent addressed it, and i think now is high time to do that. Okay. Sure. Could you explain the stranded assets a little bit i mean i want to speak for the commissioner but generally we want to know how much it costs to hold onto our assets. Are they being fully utilized. Why do they call it a stranded . Did you say stranded . I mean thats, you know, my use of that, and i think its reasonably common is that you have an asset that you paid for under one set of circumstances, well, circumstances change and now you still have to pay for the asset right. The Ownership Costs and all of that. But it may not have any economic purpose anymore. But you still have the obligation. So we have some of those, it looks like in the transmission side of things. Yeah. I know what you mean. So we have these transmission lines that come down from hetchy, lines 3 and 4 that go across the Central Valley into newark, interconnect into the pg e system. So we are maintaining our lines and paying for that, and we are paying pg e to transmit the electricity to San Francisco. So can we do that in a more productive manner and only pay once . Thats i think what you are trying to look at. And part of that is its possible there are mechanisms by which you can get our transmission included in what the California Independent operationer uses for managing transmissions throughout the state. Once you do that, there are state funds that are available to help you with the cost of that. Lowvoltage transmission is not something cal wants to include in the grid. So thats an option even with highvoltage transmission lines that we may or may not have taken advantage of fully. And the other is for the lowvoltage lines, thats not even an option. So the question, what do you do with that . Do you continue to use them and pay for those if theres any economic reason do to do that . Should you decommission them . Should you sell them . Should you lease them to the irrigation districts . There are a bunch of options. The only option i think is really a bad idea is to have an nonperforming asset that stays on the books. What we are doing now . Yeah. Other comments, questions . The general public, any comments, questions . Basically certain issues and projects come under the purview of the general manager, and certain come under the commission. What i see missing is that when you do this budgetary things, judiciary things, theres not having understanding of the technology and engineering so that a Needs Assessment can be done. If you dont do a Needs Assessment at a point when it needs to be done, then it costs a lot of money, and we waste millions of dollars. And we just have to look at the audits to see whether sfpuc, whenever it does some large projects, whether it comes under budget, its always wasting millions of dollars. Now, in general, whoever runs the operations manages the operations, evaluates the operations, they have to address quality of life issues. And have some principals that are linked to whether they are viable and sustainable. I dont see any mention of that. Now, if you take out two treatment plants, there are hundreds of notice of violations. Not 10, not 20, not 30, not 40, hundreds of notices of violations. Not long ago, i think within the last two months, a whole system at ocean beach was paralyzed because our computers werent working. This is not just cost here, its business as usual. Then there were some correspondence between somebody in washington with the e. P. A. And our general manager replying back and forth, back and forth, the sfpuc making a fool of themselves, because its a shame that you get so many notice of violations, and you dont do anything about it, and its a shame that you dont brief the commissioners, because you are the policy makers. You have that authority. Its very nice to mention that Environmental Issues come under the Commissioners Community benefits, comes under the commissioners, but the commissioners do not know how millions of dollars are being doled out to entities that dont even deserve a dollar. And you know, i got two seconds. I wish i could have 20 minutes. Thank you very much. Thank you. Are there any other comments from the public . Seeing none, does that complete your report . That does, madame president. Next item, please item 7 has been removed from calendar and will be heard at the december 10 meeting. Item 8 is bay area water supply and Conservation Agency report. Good afternoon, commissioners. Nicole, ceo, thank you for having me here today. I wantedto take my time to provide you some information that i think you might find helpful. Over the last couple meetings theres been some discussion about the agencies, wholesale customers, what they do for their Water Supplies and their demand projection. I pulled these slides together for a different presentation and i wanted to share them with you because i thought you might find them helpful. We are a special district, formed in 2003 to represent your wholesale customers. 26 water suppliers in san mateo, santa clara and Alameda County. 1. 8 million people, over 40,000 businesses and countless community organizations, the tie that binds them is they all rely on your water system, some more and some less. So this map is the map of your wholesale customers, essentially almost all of San Mateo County with very few exceptions. Eight agencies in santa clara and two in southern Alameda County. And our goal is simple, a reliable supply of highquality water at a fair price. Thats our focus on behalf of our member agencies. So this graphic, its interesting as ive looked at it over this year. It shows three different pictures. It shows what i would consider our past, so 1986 water use, again, your wholesale customers all lean on San Francisco. Current, which is the middle column, thats 2017, 2018. So postdrought. And with our current future, 2040, which our current projections which are in the process of being updated. But a couple things to take away from this, the large blue bar is the purchases. That makes up a major portion if we put all the bawsca agencies together, the supply they deliver to their customers and historically, they tend to think of it as roughly twothirds of the supply they delivered and that was consistent in 1986 with 67 percent. And then similarly, in the current situation, though of course demand is down quite a bit, but moving to the future, what we are seeing is investments, commitments from these agencies, their customers, their communities, to diversification. So increasing recycled water, rejestive use in groundwater, conservation, all those things really changing that portfolio as we look out to the future. Again, these are what are currently documented in their existing urban Water Management plans. But it shows some of the things that when i talk to my board, those investments are not free. Those are commitments, Financial Resources that are put to this test for those agencies and those customers. And its really reflective in that diversification. Nicole, just one question. Is that, for your member agencies, is that their total water use . Total water use so if they are getting water from the valley, thats in here . Exactly okay. Yes. So thats where that green, that other sources is either imports that some of them get purchases from valley Water District or Alameda County Water District where they have their own state Water Supplies that they purchase. So one of the things i wanted to kind of explain to you, what we do in relationship to this picture, and how that works with your Planning Efforts, and theres a couple really important things. And i mentioned that large blue bar in those columns is that San Francisco supply, the supply from the Regional Water system. And that is critically componenf my member agencies, thats something they are reliant upon. They have a perpetual supply with you and there was discussion about that at your last meeting, that 184 million the billions per day they are guaranteed from the Regional Water system. And thats part of their planning effort to they know what to plan for and how they are going to meet their customers needs. That supply is implemented through the contract they have with you but really is a result of litigation dating back to 1977 and the settlement of the palo alto versus San Francisco litigation. So its a critical excellent of their planning work. Also your adopted Level Service goals are important. You have said we are going to try to limit rations no more than 20 percent. Thats important. That becomes an assumption they use in their planning purposes. As we look at that, then we also say what are the increasing risks to the system . And youve talked about this year as well. We have population and job growth, what do we do with Climate Change . What does that mean . Regulatory action, what are the risks associated with that, legal action and affordability. All those things are coming into play as we talk about how to plan for the future. What is very clear is Water Conservation is going to remain critically important. Again, thats evidenced through the past investments but also as we talk about the future investments, bawsca is involved at the state level, helping our agencies figure out how to meet or exceed the guidelines for Water Conservation and thats very, very important. And investments in local droughtproof supplies are things that they are increasingly looking at. Palo alto and Mountain View recently entered into an agreement with valley water for recycled water use of their assets. We are looking at those projects to try to expand the opportunities to see where we can implement them cost effectively. We are working with your staff and our agencies. The idea is not to duplicate efforts but to do them together in the way that makes the most sense to deal with these things. One of the major planning documents that is now relied upon by most of my agencies, not all of them but most have to do with urban Water Management plan. They are staterequired planning documents that are due every five years. And they have to do them and we provide them a lot of information to help them do that. And we coordinate with you to meet with them and make sure they have the same information. And one of the key roles is developing the demand projections. What are their projected demands and we coordinate that with them so they are consistent in methodology, in application, in assumptions. And we provide guidance on how to do their Water Management plans. But thankfully i dont have to do one myself. So two categories of information in Water Management plans that we deal with. So theres the water demands themselves, so what is your need for water moving into the future. Your Water Supplies, and then the water reliability picture. So on the water demands, i think ive showed you this slide before, but it is very, very important, because its a picture that we are really struggling to figure out what it means as we look to the future. This is a graphic that shows water use on the left side, population on the right side, water use is in blue, population is in orange with the orange line. And you see the, obviously the 31 percent population increase over time. But 23 percent less water being used. And the consistent pattern of every time theres a drought, water use goes down and then theres a certain amount of recovery. And we are in that situation right now trying to figure out what exactly is that recovery . What does that mean for our longterm water use and how do we figure that out . Put in a different way, is looking at it on a per capita basis, because obviously growth has an impact in that previous drought but are we seeing a continued reduction in use on a per capita basis . And the answer is yes. Residential per capita has continued to decrease. Thats the amount of water a person uses on a daily basis decreased about 46 percent since the mid1970s. Down to where we now have some of the Lowest Per Capita use in the state as a region, 62gallons per capita per day, and thats an average across all agencies. And many of those agencies are competing with you with that very low per capita water use. Again, the question is what does that mean for our future and how do we understand that . So we initiated a demand study last march. And kind of an evolved version of one that weve done a few times before but this idea is 26 different models, computer models, that use Historical Information for each of the different agencies. So a consistent methodology that their own information about water use, their population, their employment, their job growth, the weather, their water rates, their conservation activity, all those things. Its called an h econmetric model. Its looking at all those things that independent variables that we know impact water use in a service area. And then project out through the planning period through 2045. And projects what we think water use will be with the knowledge of what water rates might be and how sensitive it is to water rates, questions about Climate Change, how sensitive is it to temperature changes, projected Population Based on adopted land use practices, projected employment based upon the States Department of finance projections. And then in the intervening middle years this question of drought recovery is one that we are working really hard to figure out how whats the range of impact in that drought recovery, how long does it last, how does it change your end . We dont have the answers for it yet. We are in the middle of that work with our agencies. But i feel that weve done an interesting job in trying to understand what this means. And this time the important thing is well be coming out with quite a range of what is our future projections, kind of recognizing that the numbers always off. Projections are always wrong. You have to do something to come up with a range, lets figure out at least what decisions are being generated by how big that range is, right . And i think that will be one of the important things for us to discuss as we get closer to the end of these projections. Something else we look at is Water Supplies. So thats a total demand projection, so not just projections from the puc but from their communities, how much do they need. And then the question is how do they meet that need . Look at the Water Supplies they have available to meet that need. So that last far right column, which was the prior version, if you will, we are updating that. The question is how much more can they do from conservation . How much more can they do from recycling . How much are they going to get from valley water . What are they going to purchase from the puc . To balance out that projection and how they are going to meet those Water Supplies in the future. And then reliability. And this is continuing to become even more critical, in my mind, at least, as we start to look at the service area, you know, that today has a residential use of 62 the billions per person per day, and that is going to go down on a per person basis as they continue to use less, reliability becomes more important, how much can they cut back in the future and how du that inform our ability and willingness to make decisions about investments . Is it critical component. So this is a slide from former studies done in 2015 about what the reliability question was and our demand study as we look at those slides to come up with new numbers, and that will inform boast our interest in working with you on your reliability for your supply, so how much the puc is going to meet its 20 percent systemwide cutback limitations and do the agencies themselves want to invest separately. And i honestly dont know the answer to that question right now. But that will be important for this work. So just in closing, together with our constituents we are actively pursuing this. The timing is to inform both decisions on our own, inform your planning process for the questions about regulatory issues, those things, to understand more what we want, and also to inform the urban Water Management plans. But no matter what, your supply will remain critical to the wholesale customers as a kind of a base supply. Some of them dont have a lot of other options. Theyve certainly wished that they would. So well continue to work on that. The current water demand study is expected to be completed at the end of this fiscal year, so in june. So ill have more information closer to that mark. And that will roll into our Planning Efforts and your Planning Efforts and into my agencys Water Management plans. With that, that concludes my comments. Is there any questions you might have . Thank you i have a question. And weve talked about this quite a bit. You might be able to help as well. The number, so i understand that thats for the guarantee, the supply insurance in the event that everything goes south in order to meet water demand. It seems like the delta is growing, the difference is growing to a certain extent, between actual usage and assurance, if that makes sense. At least today. Now, that might change, and maybe its a result of conservation efforts, additional supplies that are coming on, i dont know what. Weve been trying to figure that out, i think, together. The number, i believe was arrived at in sort of the 80s whenever that was when usage was really peaking. You showed a graph of that, i think. So im just trying to square in this new world of regulatory requirements, of potential additional supplies, of how long its going to take to bring additional supplies online, you know, kind of what that real number is, not just for bawsca but for San Francisco, because it feels like theres this number of guarantee which we need to maintain and recognize and we are obligated to, but what is sort of that real demand usage number . And you know, nothing is perfect, and nothing is exact, but im just always im trying to square it up as we put more efforts on our San Francisco side into supply demand planning. So i dont know if thats like a question, but it just keeps coming up for me of like, i know a lot of the environmentalists with the water fish question, how much more can we actually release and still be able to meet our contract obligations. So i would love to hear your thoughts on that. So ill take a first stab at it. So the 184 is actually a legal requirement stemming from litigation. So its not in your contract, and in fact it survives the contract if the contract is terminated or expired. [please stand by] change our expectation that what water is available. Your obligation to provide it when it is available and most of the time the system has it. It is the dry years with the critical issue. Most of the work with the exception of san jose and santa clara or decision about providing a permanent normal supply are all focused on dry year reliability. That is what those projects are about. That is why the focus is so important. We cant forget that. You know, last year, we had more than enough water. That is not the issue most of the time with the exception of san jose and santa clara. The only thing i would add to that is that its 184 is a fact. It becomes a difficult fact to work with sometimes. You say wrapping your manned around it. It creates some tension and leaves unavoidably leaves open questions. An example i would give is questions to whether or not to make the interruptible customers permanent. You can make the case given people arent using 184 there is room to make them permanent. What that does is compro myselfs our ability down the road to meet the obligation we have to meet sometime down the road. Might have to meet. Might have to meet. We would have to meet. We would have to meet if the demand were to grow and you were part of the group that said that is part of my pie, i am not sure i am willing to relieve you of that burden. The developing supply at the same time. Normally your supplies depend, right . It is difficult with the interruptibles and all of the other factors and Regulatory Environment as well. Well, thank you. Thank you for sharing that with us. It was very informative. Is there any Public Comment on that issue . I think this is one of the better presentations that should teach us a number of very serious issues that this commission hasnt been paying attention to. Now, if i ask you, commissioners, within San Francisco how many miles of clean water pipes we have and if you go to our website,
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