San Francisco Public Utilities Commission Meeting - September 26, 2023

The San Francisco Public Utilities Commission (SFPUC) held its regular meeting on September 26, 2023, at 9:30 AM. The meeting covered a range of topics including the General Manager's report (recognizing retirees, introducing the new Chief Diversity, Equity and Inclusion Officer, budget update, capital project updates), a Bay Area Water Supply and Conservation Agency (BAWSCA) update, approval of consent calendar items, award of racial equity consulting contracts, amendments to the Social Impact Partnership Program rules, adoption of revised Rules of Order moving public comment earlier, and items initiated by commissioners. The commission also entered closed session to discuss litigation settlements and a performance evaluation.

Consent Calendar

• Items 5a–5i: Approved unanimously (4-0). Included modifications and awards of job order contracts for general engineering, HVAC energy efficiency, as-needed engineering design services, Hetchy capital improvement construction management, the Southern Skyline Boulevard Ridge Trail Extension ($20,523,445, 543 days), contingency increases for sewer replacement, correction of a previous resolution, and a sole source finding for pumps.

Public Comments & Testimony

• Gwen Jackson Fagan (on item 3C and item 6): Expressed hope that the $8.8 billion capital budget could be used to repair aging infrastructure at 1800 Oakdale and preserve it as a legacy. Also asked about the location of the racial equity plan and who is involved.
• Peter Dreckmeyer (Tuolumne River Trust, on items 3C, 8, and 10): Supported decoupling of rates and environmental stewardship metrics such as salmon population. Expressed concern that the alternative water supply plan could lead to overinvestment and rate increases, and criticized the commission for not considering earlier runoff impacts from climate change in the design drought analysis. He thanked the commission for moving general public comment to the beginning of the agenda, calling the previous placement a way to punish the public.
• Dave Warner (on items 8 and 10): Thanked the commission for moving public comment earlier and highlighted a letter comparing San Diego’s rate increases after investing in alternative water supplies to SFPUC’s own WISIP investment and cautioning against overinvestment.
• Vince Courtney (Northern California Laborers, on item 7): Praised the Social Impact Partnership Program rules for their transparency and offered to engage in workforce development, pre-apprenticeship, and apprenticeship programs.

Discussion Items

• Report of the General Manager
  • 3A – Retirement Recognition: 21 retirees honored with over 25 years of service (combined decades of experience). Commissioners and staff expressed gratitude and concern about replacing such deep institutional knowledge.
  • 3B – Introduction of Dr. Christian Bijou: New Chief Diversity, Equity and Inclusion Officer (started July 10, 2023). Commissioners welcomed him and emphasized his role in implementing the Racial Equity Action Plan (REAP), moving from analysis to solutions, and transparent reporting. Dr. Bijou stated he has streamlined REAP from 7 to 4 priority pillars.
  • 3C – FY 2025-26 Biannual Budget Update: CFO Nancy Hom presented the operating and capital budget process, priorities (affordability, responsible management, investing where it matters), and the $8.8 billion 10-year capital plan. President Ajami proposed decoupling water rates from consumption and suggested hiring energy rate consultants. Commissioner Stacy noted the interrelation of priorities. Commissioner Maxwell supported a climate/environmental lens.
  • 3D – Hetch Hetchy Capital Improvement Program Quarterly Report: Katie Miller reported Q4 milestones: 33% overall spend ($255M), 7 projects in construction, key progress on O’Shaughnessy Dam outlet works and transmission line upgrades. Commissioner Maxwell questioned construction management cost increases; staff explained they reflect needed expert supervision for electrical projects. President Ajami urged using modern tools for early detection of pipe failures.
  • 3E – Wastewater Enterprise Quarterly Report: Bessie Tam reported no cost variances, awarded two construction contracts, and highlighted progress on Biosolids and Headworks projects. Addressed community concerns about paving restoration on the Womona project; staff had committed to timely repairs.
• Item 4 – BAWSCA Update: CEO Nicole Sandkulla provided updates on negotiations for a new Tier 2 Drought Allocation Plan (current plan from 2009, extended yearly), a new long-term water supply strategy (Strategy 2045), and customer conservation programs. President Ajami noted increased wholesale deliveries and asked about participation statistics.
• Item 6 – Award of Racial Equity Consulting Contracts (PRO.0240.A-B): Two contracts to AECOM ($9.5M) and Rosales Building Partners/G-CAP Joint Venture ($9.5M) for five years. Dr. Bijou and General Manager Herrera emphasized this is a task-order-based, internally supervised effort. Commissioners expressed initial apprehension but were assured that the PUC would retain intellectual property and build internal capacity. Approved 4-0.
• Item 7 – Amendments to Social Impact Partnership Program (SIPP) Rules: Technical amendments to comply with a citywide suspension order affecting certain entities. Approved 4-0.
• Item 8 – Revised Rules of Order (Move Public Comment Earlier): Changed Rule 16 to place general public comment earlier in the agenda. Approved 4-0, effective next meeting.
• Item 11 – Items Initiated by Commissioners: None.
• Closed Session (Items 14–16): Conference with legal counsel regarding settlement of existing litigation (Madison Collane – $40,000 settlement) and anticipated litigation (Sentinel Insurance – $100,000 settlement), both subject to Board of Supervisors approval. Public employee performance evaluation of General Manager Dennis Herrera.

Key Outcomes

• Consent Calendar: Approved (4-0).
• Item 6 (Racial Equity Consulting Contracts): Approved (4-0). Total not-to-exceed $19 million over 5 years.
• Item 7 (SIPP Rules Amendments): Approved (4-0).
• Item 8 (Revised Rules of Order): Approved (4-0).
• Closed Session Motions: The commission voted (4-0) to assert attorney-client privilege. After closed session, the commission recommended the Board of Supervisors approve the two settlements and selected Commissioner Maxwell as the Commission's representative labor negotiator for the performance evaluation of the General Manager.