So the SFPUC Commission has called to order for the for the um budget hearings that we are starting here today at 9 o'clock.

So could we have a roll call, please?

President Paulson.

Vice President Rivera.

Here.

Commissioner Jamy, she'll be here shortly.

Commissioner Maxwell?

Commissioner Stacy?

Here.

And you have a quorum.

So before we call the first item, I'd like to announce that the San Francisco Public Utilities Commission acknowledges that it's own, owns and are stewards of the unceded lands located with the in the ethnohistoric territory of the Moleculalone tribe and other familiar descendants of the Federally Historic Recognized Mission San Jose Verona Band of Olamita County.

The SFPUC also recognizes that every citizen residing within the Greater Bay Area has and continues to benefit from the use and occupation of the Molecula Alone tribe's aboriginal lands since before and after the San Francisco Public Utilities Commission's founding in 1932.

It is vitally important that we are not only recognize the history of the tribal lands on which we reside, but also we acknowledge and honor the fact that the Molecula Ohlone people have established a working partnership with the SFPUC and our productive and flourishing members within the greater San Francisco Bay Area communities today.

So as I said, we are here for the uh budget hearings, and so um can we have the first item?

Item number three public hearing and discussion of the proposed budget proport pro budget priorities, administrative code section 3.3b, fiscal year 24-25, and fiscal year 25-26, SFPUC operating budget, tenure capital plan overview, and 10-year financial plan overview.

Good morning, Commissioners.

We're very pleased to be with you this morning to present our proposed budget for the next two fiscal years, fiscal year 2024-25 and fiscal year 25-26.

I'm joined this morning by Nancy Haum, our Chief Financial Officer and Assistant General Manager for Business Services, Laura Bush, Deputy Chief Financial Officer and Aaron Corvinova, Financial Planning Director.

We're going to walk you through our proposed two-year operating budget, two-year capital budget, ten-year capital plan, and our 10-year financial plan.

As part of that, we'll lay out the priorities that guided our decision making and helped to shape these budget proposals.

Next slide, please.

Here's a quick overview of today's agenda.

I'll be going over our budget priorities in just a few moments.

But I'd like to note that this is a public hearing under Administrative Code Section 3.3B, and it provides the public an opportunity to hear about our proposed budget and weigh in on priorities.

We'll then discuss our budget approach before going into more specifics about our operating budget, capital budget, ten-year financial plan, and debt outlook.

This will be followed by operating budget presentations for our different bureaus.

For reference, it's business services, external affairs, human resources services, my uh office and infrastructure will present their proposed budgets as well.

Next slide, please.

First, while I know you're familiar for the public, I think it's important to highlight what we do.

The SFPUC is a not for private not-for-profit public utility that delivers high-quality drinking water to 2.7 million people in the Bay Area.

Our sewers and wastewater treatment plans serve San Francisco and they are on the front line protecting public health and the health of the Bay and the Pacific Ocean.

And we generate clean power and serve electricity to over 385,000 residential business and municipal customers in San Francisco.

In fact, for our own power generation and the electricity procured through the Clean Power SF, we currently provide about 75% of the electricity that's used in San Francisco today.

Next slide, please.

Here you see a high-level overview map of our facilities that I know many of you have had the opportunity to visit.

As you know, our operations span nearly the width of the entire state.

We have more than 2300 employees operating from the Pacific Pacific Ocean to the high Sierra.

They are as diverse in their backgrounds and life stories as they are in their skills.

SFPUC workers are testing water quality, keeping branches away from power lines and upgrading wastewater treatment plants.

They're answering questions from customers in their preferred language.

They're providing rebates for water efficient washing machines, helping to train the utility workers of tomorrow and protecting the environment to benefit native species and their habitats.

Next slide please we are determined and committed to continue our work building the utility of the future and that is reflected in our commitment to protecting the environment, serving as an economic engine and lifting up the diverse communities that we serve.

You'll see that throughout this proposed budget.

In our consultations we were guided in our work by three overarching priorities affordability, responsible management, and investing where it matters.

As for affordability, the choices we made in putting together this budget were done with a keen eye toward how they would affect our customers.

We prioritize keeping our rates competitive part of that meant improving how we plan for and fund our capital projects which is our biggest cost driver.

Another critical component was the affordability policy that you adopted in November which established metrics to assist in evaluating the impact of operating and capital budget increases on future rates particularly for our most vulnerable residents.

We also must be responsible stewards of the tremendous assets entrusted to our care.

That means leading with integrity and transparency in our business decisions, meeting all of our regulatory requirements, maintaining our solid financial standing, completing smart and timely system maintenance to assure maximum benefits for ratepayers and investing in our workforce who are the ones who make it all happen.

We also undertook a top to bottom review of our capital plan.

The proposed plan that we put before you today ensures that we continue to meet legal requirements and achieve our affordability goals while building a public utility that is resilient, economically vibrant and equitable.

This is the largest 10-year capital plan the SFPUC has proposed.

It represents a visionary investment in San Francisco's economy, infrastructure and resiliency.

The 10-year capital plan includes accelerating economic impacts by investing in critical upgrades and modernization this plan creates fertile ground for businesses to flourish and attract investments creates jobs while developing and delivering important infrastructure upgrades and more specifically it provides for improved energy grids, reliable water systems and robust wastewater treatment to ensure smooth operations for existing companies and entices new ones to set up shop, injecting lifeblood into the city's economic veins.

The multiplier effect of investment translate into more jobs, higher wages and a strengthened economic base for all.

At the same time we want to show our continuing commitment to labor.

The capital improvement plan champions the well-being of our workforce the construction and maintenance projects it generates offer high paying fair wage opportunities with comprehensive benefits.

These jobs prioritize union labor ensuring workers receive fair compensation, safe working conditions, and a secure future by investing in skilled labor, the plan not only empowers individuals but also strengthens the backbone of San Francisco and the surrounding Bay Area's middle class, creating a ripple effect that benefits the entire community.

We also want to correct historic wrongs recognizing the historical inequities in infrastructure investment, our capital plan actively seeks to bridge the gap by prioritizing projects in historically disadvantaged communities.

These investments go beyond infrastructure upgrades.