San Francisco Public Utilities Commission Meeting - February 28, 2023

The San Francisco Public Utilities Commission (SFPUC) held a regular meeting on February 28, 2023, starting at 9:45 AM (teleconference). The commission reviewed a drought update, quarterly audit and budget reports, a hiring process overview, a BAWSCA update, and approved modifications to the floodwater management grant program and a water transfer agreement between Mountain View and East Palo Alto. Public comment was heard on several items. The meeting also included a closed session for legal counsel.

Consent Calendar

• Approved the minutes of February 14, 2023 (unanimous).
• Approved Modification No. 1 to Job Order Contract JOC-87 with Sinclair General Engineering Construction, Inc., increasing the contract amount from $5,000,000 to $7,500,000.
• Awarded Job Order Contract No. JOC-91, General Engineering Construction, for a total not-to-exceed $5,000,000.
• Approved an increase of $180,000 to contract cost contingency and 180 calendar days to contract duration contingency for Pipe and Plan (item 6c).
• Approved an increase of 34 consecutive calendar days to contract duration contingency with J. Flores Construction Company, Inc. (item 6d).

Public Comments & Testimony

• Item 4a (Drought Update): Peter Drekmeier (Tuolumne River Trust) argued that the update should be renamed to "Water Supply Conditions Update" as reservoirs are filling, and criticized the lack of environmental focus on the Tuolumne River ecosystem, noting a very bad salmon season and potential commercial salmon season cancellation.
• Item 4d (Hiring Process): Two callers commented. One questioned the lack of career opportunities for residents of pollution-burdened areas (Bayshore and others). The second caller (Peter Drekmeier) criticized the SFPUC for environmental failures, withholding public information, and not incorporating workshop findings into policy changes.
• Item 5 (BAWSCA): Peter Drekmeier noted that a $13 million infiltration gallery project in the new voluntary agreement is already nearly complete, making it embarrassing to include; he urged early implementation of unimpaired flows. A second caller criticized BAWSCA for distributing water outside San Francisco while ignoring citizen concerns.
• Item 8 (Water Transfer): Nicole Sandkulla (BAWSCA CEO) expressed strong support for the transfer, noting it took six years to negotiate. Peter Drekmeier supported the transfer but urged consideration of unintended consequences like job-housing balance and suggested allowing cities to give back take-or-pay water.
• Item 10 (General Public Comment): Peter Drekmeier criticized moving general public comment to the end of the agenda, noting a drop from an average of 13 speakers to 2. A second caller accused the SFPUC of being the worst city department and suppressing public comment.

Discussion Items

• 4a. Drought Conditions Update: Assistant GM Steve Ritchie reported that as of February 21, 2023, storage was high and expected to fill. Snowpack was at 170% of the April 1 median. Deliveries were at 152 million gallons per day (MGD), well below previous drought years. The governor issued a new executive order on February 13 continuing the drought emergency; the state may relax outflow conditions, potentially affecting curtailments. Commissioners expressed satisfaction with precipitation.
• 4b. Quarterly Audit and Performance Review: Audit Director Irella Blackwood reported that 7 of 29 planned audits (24%) were completed by Q2. The PG&E franchise fee audit for 2019-2020 found PG&E properly paid $15,585,120 in franchise fees on $1.7 billion gross receipts. Four audit recommendations were pending but resolved as of January. Commissioner Paulson requested that lessons learned be shared.
• 4c. Quarterly Budget Status Report: CFO Nancy Hom projected positive operating results for all enterprises. Water: $161 million net operating result ($34.9 million positive variance). Wastewater: $121.2 million ($22.4 million positive). Power: $62.7 million ($39.9 million positive). CleanPowerSF: $11.8 million ($8.9 million positive). Higher power purchase costs were offset by reserve contributions. Commissioners questioned why CleanPowerSF's power purchase variance was only 13% despite spot market prices quadrupling; staff explained most power is locked in contracts. A request was made for staff to provide the ratio of long-term contracts to spot market purchases.
• 4d. Hiring Process Overview: Chief People Officer Wendy Macy presented a detailed overview of vacancies (very high, with some enterprises over 25% vacancy rate). Since July 1, 2022, 191 new staff were hired, 190 moved internally, and 162 left. The pandemic period saw exits outpacing hires. Macy outlined a "North Star" goal to streamline hiring, improve candidate outreach, and use data dashboards. Commissioners asked about exit interviews, career stage attrition, candidate pools, and website accessibility. Commissioner Stacy noted the careers page is not user-friendly. The commission requested an update at the next quarterly meeting.
• 5. Bay Area Water Supply and Conservation Agency (BAWSCA) Update: CEO Nicole Sandkulla reported that the Tuolumne River parties signed an MOU for a voluntary agreement for the Bay Delta Plan, including additional flows and $64 million in habitat improvements over 8 years. She urged early implementation. President Jami expressed commitment to leadership on environmental goals and agreed to continue discussions.
• 7. Floodwater Management Grant Assistance Program Modifications: Sarah Minick proposed eliminating the 80-90% cost share requirement and making the grant cover 100% of eligible costs (up to $100,000 per property) to increase participation. Since January 1, 2023, 88 interest forms were received, a spike. The program had distributed only $59,000 per year historically. The commission unanimously approved the modifications.
• 8. Minimum Water Purchase Transfer Agreement: Alison Castama presented a retroactive permanent transfer of up to 1.0 MGD of Mountain View's minimum annual purchase to East Palo Alto, following a 2017 ISG transfer. The agreement was approved by East Palo Alto and Mountain View councils and all wholesale customers. The commission unanimously approved, authorizing the GM to amend the water supply agreement. Commissioner Stacy endorsed the policy as it removes perverse incentives against conservation.
• 11. Items Initiated by Commissioners: Commissioner Maxwell requested a "state of the environment" report focusing on the watersheds and ecosystem indicators. President Jami noted previous discussions on ecosystem indicators and agreed to a presentation. The commission directed staff to prepare such a report.

Key Outcomes

• Approved consent calendar items (6a-6d) unanimously (5-0).
• Approved modifications to the Floodwater Management Grant Assistance Program to provide 100% cost share (5-0).
• Approved the Minimum Water Purchase Transfer Agreement between Mountain View and East Palo Alto, retroactively, for up to 1.0 MGD (5-0).
• Directed staff to prepare a state of the environment report on watersheds for a future meeting.
• Directed staff to provide an update on the hiring process improvements, including website accessibility and recruiter onboarding, at the next quarterly meeting.
• Moved to closed session to discuss two litigation items (Goldmark claim and another); voted not to disclose discussions.
• Adjourned.