tv [untitled] September 29, 2011 4:30am-5:00am PDT
why are we doing it now? the response was, it is a great way to get reasonably priced power. and they're pretty much demanding that of all of their customers. that is the way power sales are going now. they want that lead required commitment to continue to serve. >> i remember a few years back entering into contracts that we have regretted it greatly. i think the term is too far out. >> is that still negotiable? >> this is the standard contract they are offering all of their customers. i don't know if they would be open to a shorter-term if there isn't support for it here.
>> our current contract, they are asking us to make a commitment by the end of some timber. an indication of a commitment. they understand that will not have board approval. if we get your consent, they understand will not have your approval in that timeframe. >> is there a way to go back to them and try to negotiate the terms or see if they are open to it? >> we could do that. it compromises our overall ability to serve through a western approach. we already have a basic resource contract with them and that extends beyond this term. it is very cheap power.
>> he will see how strongly they feel about that, having a contract with them, but not as long. >> it is unlikely. >> i suspect this is the way they do business. this is how we are interacting with everyone else. survey, why an exception for you? >> if we were cannot take, there would not be a penalty? >> i think we can come back at the next meeting and provide more detail on that, that is my understanding in the conversation with the attorney that drafted this. it goes to your issue about what
rate we are buying this power at. this is more of an option to purchase that overlay of power, and there is a describe the process by which you go to that next level of commitment when you have those specific rates so you can provide more of the underlying detail to you can understand the business risk there. >> if we can extended to the end of the meeting, we can hear it or continue it? >> of the other thing that will be helpful if you try to quantify how power rates in general compare to other power sources available to us. one of our concerns is that we might -- typically, it is cheap. >> the federal power contract is like a 2 cents a kilowatt hour
contract. the portion of our arrangement is more of a market rate contract. i believe it was $76 a megawatt hour that we were using to arrive at the $9 million number. that is the price we estimate for the extended five years for the full load of service. for the base resources, we pay about 2 cents lesor less. we have this full although the service contract that we layer on top of that. the resources purchased on our behalf for that portion of the customer demand is estimated to cost 7.6 cents.
>> if you could get some answers and more detail, we will either take it back up or continue to the next meeting, that will be great. we will take public comment and if there is no objection, i would like to take a 11 and come back to attend because i know there is a community member here that has been waiting to address that issue. >> i think this also relates back to the discussion earlier, part of the problem that i understand is that we don't have long-term agreements at low price and this seems to be a long-term agreement at low price for we are not obligated to purchase. it seems like a good arrangement for what i understand, i am sure it is much more convoluted. if the power price to serve treasure island in sounds like
is what ever, 9.6, some blended rate, i hope we are recovering at least that much and hopefully the full retail rate, we are not subsidizing treasure island any more than anyone else. they're all of these interrelated power issues now. >> we are not subsidizing them and i don't believe we are making a profit either. >> may be as we look at the rate, we can increase that to the pg&e re. >> something with a new build out. >> we're still taking care of a navy property, basically. >> they can be a revenue stream that we bond against. i am is trying to pull these things together. >> will take a number 11 now.
>> to adopt a finding for the needs of any san francisco public utilities commission of property funded by seventeenth street in san francisco authorized general manager to execute in memorandum of understanding in recreation or parks department regarding the property authorizing the board of supervisors of a jurisdictional transfer for fair market value. subject to the terms of the mlu and adopt findings for the california environmental quality act. >> this is a feel-good island -- item. it increases the housing stock, it creates a park in an
underserved neighborhood, and you protecting ratepayers interest because you're getting market value for the property. what we're asking you to do, this property is surplus to our utility needs. that is one of the findings you have to make today except for a portion that is about 16 feet by 16 feet where we have a pump control station, if you remember, numerous flooding events, we put in a pond control station. we will be retaining that portion of the property. he will authorize the general manager to sign behalf -- the mlu. you are going to request the mayor and the board of supervisors to create a transactional jurisdictional transaction between the departments of this property.
you will receive the benefit from that. and finally, you are adopting the ceqa findings. we will be responsible for cleaning up as the development goes forward. those of the actions before you today and i know there are members of the committee that want to address you and i'll be happy to address them. >> if we get a motion, we will take some comments and questions. we have a motion on the table. >> is this going to be one of these transferred? >> we are going to be paid the $6.2 million and you'll be receiving a portion of that once the deal closes. it is not a payment plan, i
admit that, but we know the funds are there and available to us and we will receive the money. >> will credit back up to $600,000? >> that is up to. we have the soil contamination problems on the site and we are responsible, creating these forced accounts and we will work with them and actually get the actual costs for contamination issues on the site. >> public comment. thank you for your patience with this item. >> thank you so much for moving it up a little bit, i know we spent some time on community choice aggregation which is an important issue for our city. i totally understand.
we are based in the mission district and we work with immigrant families. we are proud to be a group that has created parking together with neighborhood residents and the families. we organize from the bottom of, and to me, this project represents the way that urban planning should happen. the vision, the need for the community, and we get a visa for through policies, rezoning, the different agencies in this example, for different agencies working together. i see a lot of reciprocity, a lot of partnerships happening.
that is something we have not had a long time, going through the housing boom and bust. we have thousands of hard- working immigrant families, native-born families that are living in single room occupancy hotels, living in crowded housing, and have no access to open space. this brings both of those needs together in an area that we consider an environmental justice community. this part of the neighborhood was a mixed residential and industrial sector that has a harmful legacy of toxic pollution, unsafe conditions for pedestrians and families. this is one way we can begin to kick that ballots and clothes that disparity.
especially in an environmental justice communities. i also want to recognize that i was joined by a crew of neighborhood residents and leaders that had to pick up the grandkids, and babies of their sisters, and go to their other jobs. i want to recognize these people that were here to support the project. i can do justice of what they were going to say, but i want to recognize their time, talent, and ask for your support on this project. >> we appreciate the work you and other community members have done on this project. it is really exciting that this project is finally at this place. >> i just wanted to recognize that this site has a long
history of back-and-forth of different agencies. i think it was over 20 years ago that it was transferred partially in trader for one of the reservoirs, balboa at the city college. i don't believe the puc has controlled the property before that, so i am wondering why it would not fall to the city college for prior property owner? it seems odd to me that we would be burdened by that responsibility. my final comment that michael addressed is that the revenue would accrue to the water enterprise to the benefit of san francisco ratepayers, and not shared with suburban customers. perhaps if that question could be answered about the ownership.
>> may be a quick response? >> when we took ownership of the property, we took the liability with it, and it was done before my time. that is just the way it is at this point. >> i do have one other correction to the resolution. it says the property of 31,000 square feet, he property is over 60,000 square feet. because we are dividing it into two parcels, it just got transferred. if we make that correction, it clarifies everything. >> is there an amended motion? >> i will move the amendment. >> second.
>> all of those in favor? opposed? all those in favor of the main motion? the motion carries. >> if possible action to authorize the general manager to enter into one or more agreements with western renewable energy in order to establish to the administrative make to certify, track, and report to enter into similar agreements to certify reports. they will be able to demonstrate achievement of the environment, goals, applicable laws, and authorize the general manager to seek the board of supervisors approval. >> would you like a presentation? >> how about a motion?
second? questions, comments? all those in favor? the motion carried unanimously. >> the next item i believe will be item 12. other as in the general manager to execute on behalf of the city and county of san francisco, a memorandum of agreement for parks and recreation to provide funding for a long-term stabilization plan for an amount not to exceed 1 million -- >> so move, but with questions. where is this located? where is a close to?
>> lead to start doing that. whinnied to take credit for that, it is part of good government and working together. >> she will be there friday for the dedication. >> other questions or comments? >> we have no speaker cards. >> on item nine, we have an answer to your question. so the question was, how firm is this obligation? what this contract allows us to do is preserve the ability to purchase power through wapa,
through western. we are not obligated to take any power with this contract. we do on an annual basis assess what our needs are, and communicate those to western once they are better known and once we know what the market prices are. the fact that western sells the power to us at market price, and if we choose not to take it, excuse me, in a given year or period, they are then able to reach market on the power market -- able to remarket it on the power market. so we reserve our right to continue to have a relationship with western. commissioner: why do we even have a contract then? >> so the we can establish with
the provisions are for the commitments on an annual basis if it is favorable for us to do that. president vietor: ok, thank you. commissioner: so do we want to call the vote on that particular item? all of those in favor of adopting item number nine? aye? opposed? and one no. president vietor: next item, please. secretary housh: the next item would be item 13, a discussion and possible action to approve an increase in the preapproved 10% construction cost contingency allocated to the water enterprise. there is a total contingency amount.
and authorize the general manager to consider, and if appropriate, to approve modifications to the contract for a total of $105,412,376. >> good afternoon, we are looking to approve contingencies for changes that fall into four different categories, and before i go into that, i should tell you that this project is now 45% complete. we're trying to rehab existing infrastructures. this makes it more difficult. basically, the four categories of changes are site conditions, and those fall into two subcategories, geotechnical. a different condition and what
was in the bid documents. for example, there was a greater concentration in a number of areas on our side. there were also some discrepancies of what was on our drawings versus what reality was. sometimes, drawings do not reflect all of the conditions that are. we ran into some things that were not shown in any of the drawings, so those result in changes. there were also, one of the biggest categories was scope additions. the water enterprise asked that we add a few scope items to the contract to address some immediate needs. when you get out in the field, and you start building new improvements, you find that some of the existing improvements that you thought were in good conditions are not in good condition, so the water enterprise, for example, asked us to rehabilitate some of the foundations on which the nine chemical tanks of the plant set.
-- 6. we also realized that some of the chemical pipelines were leaking. these changes initiated by the client alabama $9.80 million, so what i want you -- initiated by the client add up to $9.80 million. on the $4.20 million need to come from our program management reserves, now $167 million. the additional will be covered by the water enterprise as part of their capital improvement funds because these improvements that we will be building, some of them were already identified in their capital program. now, it is much easier, much more efficient, much more timely and effective to amend the existing contract to do that work, versus trying to get a separate contract group to come on site. when you have two different contractors trying to share that side, there are complications and also a timing
issue. that is the reason why we are adding those into our contract. there were also environmental challenge encounters. we had nesting of protected birds that had to be removed. they delayed the project. and on all of our projects right now, we are encountering some of these challenges. these are recurring themes, and that is what i was going to discuss in my overall presentation, where the conditions sometimes on site is different than what we had assumed. contamination shows up in some cases that was previously unknown. so this is how we came up with this additional cost. these costs include all of our change orders and trends and account for some of the project risks that we see out there for the remaining of the project. again, it will not change the entire cost of the program because we have a good reserve that is therefore a situation
like this. with that, my job and the job of our team is to control these changes and make sure we finish with money left in the reserve, so these treatment facility projects are definitely some of our more challenging projects. president vietor: ok. this is a big dollar amounts again. wsip. is there a motion to approve this item? commissioner: i will move. commissioner: i will second. president vietor: commission iran -- commissioner moran? commissioner moran: was this part of the initial?
>> some of the costs associated with the chemical tanks, pipelines, as well as the foundation, were added later as a change. after the contract was awarded. vice president moran: the tanks were awarded? >> i would need to verify that, commissioner. i believe that the tank replacement themselves were included in an addendum to the original contract, so they were bid as part of the original contract. now, there were additional items associated with that, like the mechanical and electrical work that were added to the existing contract. vice president moran: the reason i ask, and i will support the program, the request of scope changes are my least favorite, and i do believe in the process.
you tend to get a better price, so if you have the foresight to say you are messing with this, you tend to get a better price than if you do not. the condition of the foundation, that may be a surprise. >> i fully agree with you, and i think to that extent, we want to bid out that work. the costs and to put another bid package on the street may compensate for these big savings. vice president moran: as far as the original package. >> i agree. vice president moran: you cannot have two contractors. >> we went through a lot of discussion. it was not an easy thing. >> by the way, i do not approve those on my own. i bring them up to the team, and
general manager ed harrington, we go over those. vice president moran: thank you. president vietor: so all of those in favor of moving item 13 for reproof opposed? secretary housh: there are no speaker cards on that item. item number 14, a discussion and possible action to approve an increase to the preapproved 10% construction cost contingency for water enterprise, water system improvement program- funded construction contract number wd-2591, for a total contingency amount of under $4 million, and operas
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