Can we have the next item . Approval of the minutes of october 8, 2019. You have before you the minutes from october 8. Are there any questions or comments on the minutes . Any Public Comment on the minutes. Motion to approve . All those in favor . Opposed . The motion carries. The next item is general Public Comment. I have a card from mr. Decosta. It afternoon. Ellipsis good afternoon. I dont say this too many times. When i fill out my card you will see Environmental Justice advocacy. I have gone your website. In all of this time from 2,002 up to 2019, how has sfpuc addressed Environmental Justice when it comes to our infants, our children, our youth, our young adults, our elders, those with compromised health, the physically and mentally challenged . I want to know. Do we have a department, or whatever term of external affairs chief strategist . I would like to have some sort of an explanation with all of the money that has been set aside for community benefits, how much is really being satisfied when it comes to children . How much of it has been satisfied . And, if San FranciscoPublic Utilities commission is appropriate, and if this is tied to all of the talk that you talk about, equity, resilience, and whatever. Cultural competency and implicit bias does and whatever, i want to know. I do come to these meetings. It is not easy for me to come to these meetings. Ive got other things to do. If i come to these meetings, i can look people in the eye. I know what is happening. I take notes. I dont want to judge anybody. What i want to request of you commissioners is we all need to come into the community, or yall need to go to the health department, or yall need to go to any of the entities that have the statistics so that yall can review what is really happening in this community. The carbon footprint, congesti congestion. How does San FranciscoPublic Utilities commission play a roll . Thank you very much. Thank you. Any other general public comme comment . Hearing none. Next item, please. Item five is communications. I did have a question on the communications as i was going through my docket here. The advanced calendar that we get. I was just noticing, may i did notice it before, i appreciate the yellow highlights. Some of these have gone on for some time. I am wondering how they get addressed. When it gets to a certain. , does it then rise to a certain level. Some of these things i would still like some information on. I dont know if it means it needs to come back to us has a list to find out if we still want the information. The request i had on the possible uses of drones im not quite as interested in anymore as i am for planning for Battery Storage or disaster recovery, for example. Probably what we will do is we will double backed with each one of your requests. Some we probably thought we answered like we have a drone policy. Anyway we can come back with y you. I know that donna has been doing a good job trying to make sure that folks respond. That is something we are working on. If we dont respond to should do a date in which we can respond. That would be helpful. Or just some feedback. Sometimes we see that it has already been dealt with. It feels like some of these things are getting pretty old. Anything else on communications . Any Public Comments on communications . Next item, please. Item six is a report of the general manager. The first item is our sewer system improvement program, major project. Good afternoon, commissioners. I am project manager for headworks. First, i want to thank you maxwell, and commissioner vietor for taking time to come out to the site recently and look at the headworks construction site and see the complexity of the project on the site constraints associated with also commissioner caen was there. Thank you for visiting the site. In the last update to the commission, we provided you an overview of the process which is also known as construction manager general contractor they can inform the design and address the risk early on. We also had cost estimating process and evaluation during the various design milestones. Having cmgc on board early on can inform the project of an industry trends. We explained that in this bill, which we typically used to do. The risk may not be identified or addressed until the construction is underway leading to contracted downtime in the middle of the construction, or expensive change orders. We also highlighted the benefits of cmgc, during the last meeting when we were here. How construction and design can overlap in cmgc. Some example of headworks, we would not have been able to Start Construction even today because we are still finishing up the design on one of the major components. We have been in construction for almost two years and we have made significant process. Ellipsis progress. Two major items i would like to go over. To provide you an update on the construction progress and also how it will be packaged with the remaining project. Also one more item in the last commission update you had asked us about why headworks foundation is not going to the bedrock and if we should be concerned about any settlement . Today i will provide approach to geotechnical design and provide you a between the skyscraper versus our headworks which is spread out and more flat type of building. You might remember this slide from the last time. Headworks project is often compared to brain surgery being done while keeping the patient alive. We stopped to maintain 250 milliongallon treatment capacity while doing this Major Construction upgrades. It is one of the most complex projects by any standards. Quickly recap and spend a couple of moments what is the purpose of headworks out what are the project addressing the shortcomings. Headworks is also known as treatment, where the flow from collection systems first enters into the plant. The majority of equipment has reached its useful life, 30 plus years old. The current headworks does not do a good job in removing the grit and screening. Our Performance Today based on headworks is 50 below. The new design will take us up to 90 upfront. For any wellfunctioning plan, the better job we do upfront it helps everything downstream processes. One of the other major level of service was the seismic deficiency. With the old structure we are trying to address within a project. As you can see on the graphics we have five distinct scope of works. Scope one is known as Site Preparation. Okay. Scope one is the Site Preparation and scope to a is known as the pump station is the wet weather pump station. The other scopes i will describe later. Those are additional scopes that we added of the project. The main headworks is known as a scope three. You have scope one and then three scope to and made headworks project. Since last update to the commission, the headworks project has moved to scopes into the next phases. Move from design phase to the big package, advertisement phase. Scope three has moved from advertisement to construction phase. Those are the two major changes. The color of the highlighted of the scope has changed, so has the phase. On the construction updates, we have two scopes and construction phase as i mentioned earlier. Scope one includes the site prep which consists of relocating major utilities or replacing utilities. We have completed 100 today. We have completed building the readout. The existing old headworks, and also, you know, we have completed 75 of construction of scope one. On scope 2 we have completed upgrade of six pumps to higher capacity to retrieve achiev achieve two large screens have been replaced at electrical upgrades. To date we have completed 75 construction on scope 2 a as well. You might be familiar with this chart. We show this to you last time when we were here. This pretty much depicts how we conduct cost estimates at standard intervals. The project designs. Often for the complex projects, longduration. The duration between the start of the project to the completion of design could be 45 years. To give you an example of headworks project. We started planning in 2013. The construction started in 2017. It is a good four years when we go through the planning and design. During this milestone. We prepared estimates to reflect market condition, site constraints, sequencing, workforce availability and update those estimates as we move to the milestones. As i said, conceptual engineer report during the planning phase which is the end of the planning phase completed in 2016. The next milestone will be 35 . Its about that time we start doing geotechnical and hazmat investigation. The Design Elements were still not completely baked at 35 . In edition, we did bring cmgc on board at the 35 designed to help us with our Design Elements. Help us with the sequencing. Their input has benefited us quite a bit. They collaborate to identify and mitigate risk prior to the construction and we prize that risk into the parade around 2017, we added as an owner about 100 milliondollar scope to mitigate some of the associate traffic on evans avenue, excavation on the streets and increase the liability. We did come back to the commission to inform that early 2018. For headworks, 95 estimate for main headworks was done in may of 2018, reflecting the market condition come at that time. That will be the last estimate on this graph. In the next slide i will walk through what happens after the 95 example of one of the largest package which is the contractual concrete package. That will depict what happens on the structural with 95 estimate done. This table shows you three columns. The first column is the description of the items that i plan to discuss. The second column is the estimate and trend. And that what actually happened when receive the bids and awarded. To date we have awarded 25 package is associated with scope one, 2 a and three. The bids came at 121, the lowest bids, and that is what we awarded. Almost 20 increase on what we are seeing on the bids. We have 20 packages out on the street that we havent received the bid yet. Are in the process of evaluating the bids. That is about 120 million. We did not know the actual award amount until we finish our evaluation in the bids that we receive. The last is our main headworks. We still have about 54 packages to go at the value of three and a 41. You can see there is still 60 of the work is planned to be paid out in coming years. Im going to show you my concrete which is the real number example in this slide. Usc what big packages consist of. In my concrete example which is our real package. When we estimated so i have it here, 95 estimate column and propose one which is the bigger one, take an example of first line item which is classic concrete 4,000psi strength. At the time of estimate about 1. 5 years ago, in a contractor because of a potential vendor and says what is your current price . Every milestone they call to get the latest quote. In 2018 it was a hundred 60 per cubic yard. After 1. 5 years, same bidders bid the job, on the day of the bid, these are the numbers we are seeing. Those bids are very close. It tells me that the market is really otherwise those numbers would be a part as well. Could there be a way that you could say, you know, if there is an increase that there would be some way we would know . I have the same question. If you would say markets, or something, to indicate why . The first thing i think of, who is bidding . Didnt we know . I would ask that question. If you explain what happened, it makes sense. Timing is a factor. A lot of things have happened in the last year. I think he is going to go over that. This is just to illustrate when the contractor called the suppliers, this is the number they received 1. 5 years ago. Now they call it a supplier again, and the price has increased. We are doing our Due Diligence to see, you know, we noticed that this is not only in San Francisco, its happening in san jose and other places as well. We will go over what we are seeing, and what are some of the things we can help mitigate this . I understand that. I appreciate that. I would also like to maybe see and hear when you did it. At least if we knew this was done 1. 5 years ago, or whenever it was done, then a lot of questions you would have until you get to the next slide, you know . On the chart you have may 2018. That is when the contractor called the suppliers. And then june 2019 is when they called again to get a quote. We are seeing that differential a price. I dont want to steal your thunder but there are certain things that have been happening for the last three years. More pressure i would say that if we do not have a change it could go even higher. Thank you, general manager. I will take one more example on the pricing. Lets take an example of the reinforcing steel. At 95 estimate the contractor, which was given to the contractor was our cmgc contractor not the bidding contractors was 1. 10 per pound. When the bids arrived in 2019, they are 1. 41 per pound. You can see increase on there, too. If you will some not all up. Our total cost for the concrete package was 41 million in may of 2018. Of course, we awarded at the lowest bidder at six to 1 million. 61 million. This bidding is trending about estimates. The bidding market seems to be reflecting in the market types and general labor shortage in the region. As you have seen, you know, we still have quite a few packages to bid out. Fiftyfour packages worth three and a 40 million. There are things 340 million. There are things we can do such as evaluate the timing or the sizing of the package. That opportunity still exists. The team is also going to look into resequencing some of the work. Also look into the possibility of removing some constraint that can reduce our costs. I would like to highlight 155,000 work hours to date that is something to be that is very good. That is great. Thank you. Also the good news, we have 28 million allocated today for the scope i and ii. A. That is quite a significant amount. I was going to say, look at the next one. The current bid trending, higher than our estimates due to these reasons. We will work as a team to see what we can mitigate in the next 54 packages to bid out. Sixtyfour job still need to be paid out. We can time what package when we want to bid out. What size of package. If we start seeing too much price we can break it up or combine a little bit here and there, and still make final completion date. I would say that is a great advantage, because, you know, for the work that the contractor is not self performing, and even the work they self perform we can determine if its going to be self perform or not that we can talk to them and say, hey, this price is high. How can we work to reduce it . Then they go out to get pricing on it. So that we can figure out what are the best ways. And then, you know, as part of the whole process we need 23 bids on each of the packages so that we make sure, you know. Also, what we are doing is looking at other cities in the bay area, because i dont know if you know, San Francisco is the most expensive place to build in the united states. Second from new york. I thought we overtook new york . Not on construction. I know new york, hong kong. Yeah, so, but anyway, it is really challenging. We are moving from the numbers . I did have a question, it would serve your first slide where it had the second and third phases and it really is what prompted the question in the first phase is about 20 over, im curious, you know, once those numbers do come in, even with medication from a time perspective, it seems like cost is still going to be quite a bit more than what we have seen what we have approved as a commission. While that then come back to us as a whole package or by phase to be able to say, you know its actually going to be this much and those are the applications . Implications . We can posit any time because we are doing things and phases and this is something we do not have the luxury of not doing. We are, you know, working in increments to figure out how we can reduce each one of the component costs and working with the contractor and bidding it out. We are pretty much, you know, going through the path of bidding out each package and we can let you know what the trends are what we are doing and mitigate it. I mean, at a certain point you have to decide if you want to continue building this or not . Im just speaking for myself. On the commission we are going to likely commit to continue to build it. I want an understanding of what that actually means wheres the money, did it come from some other important project or is that coming from reserves. How does that really look. We are planning to present to you, as soon as the new director comes on board to look at rhe baselining everything based on what we are experiencing now in the marketplace. This is something that we will use to kind figure out out, you know, how expensive things are now. We will look at all of that. A comment to the general manager. Also, that would be part of our planning process. Great. Thank you. Quickly switching gears to our geotechnical aspects. In the last meeting, that the commissioner brought up why we are not going to the bedrock. We have a systematic approach to address geotechnical design. There are five steps which are listed on your slides. The first step is basically to look at existing geotechnical investigation in the region. The second step would be to look at what are the data caps compared to our Site Specific requirement. On the third step we have the Site Specific exploration plan and do the geotech. On the fourth step would be based on the data that we get from actual exploration on the site that the report comes out and guides the Structural Design in step five. I will go over quickly how that all works. What you are seeing is the general region of the southeast plan. You have the 280 freeway, and we are right on the clarifiers and headworks. Yeah, this is our headworks facility. We look at the region what has been done in the past. All of these. Dot you are sitting on the map is the previous investigation in the region. We look at what is available, other data gaps. The next step we prepare a Site Specific exploration plan. We have a seven that we did at the perimeter of the existing facility to identify what layers are where . Wheres the bedrock . What kind of soil we have. Those are the important things to identify ear