San Francisco Public Utilities Commission Meeting - February 27, 2024: Approvals, Reports, and Remote Public Comment Reinstated

The San Francisco Public Utilities Commission (SFPUC) convened on Tuesday, February 27, 2024, at 9:45 AM. The meeting began with a land acknowledgment, approval of the February 13, 2024 minutes, and reports. The Commission addressed consent calendar items, multiple contracts and MOUs, accepted $23.3 million in federal funds for customer arrearages, approved two credit facilities, and voted to reinstate remote public comment. Voting outcomes: most items passed unanimously, with the remote public comment measure passing 3-2. Commissioner Jami arrived after the consent calendar and several regular calendar items.

Consent Calendar

• Approved the Consent Calendar (Item 6) in a unanimous 4-0 vote (Commissioner Jami absent). Discussion covered: modernization and capacity increase for the Moccasin Wastewater Treatment Plant; addition of contingency funding and time for the West Side Pump Station project due to $975,000 in expended contingency and unforeseen conditions; acknowledgement of OJO Technologies' acquisition by Convergent Technologies; and approval of a sole-bidder contract for a specialized groundwater project at a cost ($7M) below the engineer's estimate ($8M). Lessons learned noted about avoiding bid openings during holidays.

Public Comments & Testimony

• General public comment and comment on each agenda item were offered, but no members of the public appeared to speak except during the remote public comment discussion.
• For Item 14 (remote public comment), Jacob Evans, a representative from Cycle California, spoke in favor, emphasizing the importance of remote access for equitable participation by elders, caregivers, and communities across the SFPUC's 2.7-million-person service area.

Discussion Items

Quarterly Audit and Performance Review (Item 5A)

Audit Director Irella Blackwood presented the quarterly audit report as of December 31, 2023: 13 audits (41% of planned) completed, 38% in progress, 7 scheduled. Open recommendations from two audits (SSIP management contract audit and revenue lease audit of Crystal Springs Golf Partners) target closure by March 2024. The Controller's Office follow-up report validated SFPUC's implementation of seven prior recommendations. Commissioner Maxwell inquired about examples of contract management improvements.

Contracts and MOUs (Items 7-10)

• Item 7 (CS-109 Amendment): Increase contract amount by $1 million to $10.95 million and extend by 3 years to 16.5 years for specialized engineering services for recycled water projects. Needed due to two-year delay from critical electrical equipment failure at Westside Enhanced Water Recycling Facility. Approved 4-0.
• Item 8 (Zoo Recycled Water MOU): MOU with Recreation and Park Department for 200,000 gallons per day of recycled water to the zoo (animal exhibit washdown, pool filling) and Lower Great Highway irrigation, offsetting 100% of groundwater use and freeing groundwater for potable supply. PUC constructs pipeline, owns groundwater infrastructure; Rec Park retains reservoir and pump station; PUC funds a staff position. Approved 4-0.
• Item 9 (Santa Clara Intertie Amendment): Transfers operation and maintenance of the 40-MGD Milpitas Intertie to Santa Clara Valley Water District, reviewed every five years, due to SFPUC staff busy with WISIP and district proximity. Approved 4-0.
• Item 10 (Treasure Island MOU): Amends and restates MOU with TIDA for utility services on Treasure Island and Yerba Buena, with initial two-year term and option to extend up to six additional years. PUC operates as contractor on outdated Navy infrastructure, reimbursed for costs. The aim is to manage risk while new utility systems are developed. Approved 4-0.

Federal Arrearage Assistance (Item 11)

Clarissa Wan presented acceptance of $23.3 million from the California Extended Arrearage Payment Program (ARPA-funded) to assist water and wastewater customers with arrears accrued during the COVID-19 pandemic. Applied amounts: $9.6 million for water, $13.5 million for wastewater, plus $200,000 in administrative costs. The funds will reduce water arrears from $11.8 million to $4.5 million and wastewater arrears from $15.3 million to $6.2 million. All customer types (residential, commercial, municipal) eligible; no income criteria. Remaining $10.2 million in arrears to be addressed through payment plans and outreach. Collections to resume after funds applied. Approved 4-0.

Credit Facilities (Items 12 & 13)

Edward Kwang presented two credit facility actions, both part of the fiscal 2024 capital financing plan.

• Item 12 (Wastewater Credit Facility): $150 million five-year letter of credit from Sumitomo Mitsui Banking Corporation at 30 basis points, replacing expiring facility at 32 bps, to support the Wastewater Enterprise Interim Funding Program and commercial paper issuance. Approved 5-0 (Commissioner Jami present).
• Item 13 (CleanPowerSF Credit Agreement): Fourth amendment to $75 million credit agreement with JPMorgan Chase, extending term by three years to total nine years, increasing from $20 million, with lower fees (45 bps; L/C fees 1.25% vs prior 1.4-2.05%). Used for standby letters of credit for power purchase agreements, solar interconnection, and as a working capital line. Approved 5-0.

Remote Public Comment Procedure (Item 14)

Commissioner Jami brought a motion to reinstate remote public comment, arguing that the SFPUC's service area extends across the state and many stakeholders cannot attend in person. President Paulson opposed, citing the Mayor's directive and concerns over meeting disruptions (e.g., "Zoom bombing"), stating she would support only after the Board of Supervisors and Mayor act. Commissioner Stacy noted the estimated cost for implementing remote public comment is approximately $1,100 per meeting plus staff time, but supported remote comment for broader participation of out-of-city stakeholders. Commissioner Rivera opposed, noting in-person testimony is more compelling and remote comment is still available by phone upon request. Commissioner Maxwell strongly supported, calling it essential for democracy. After public comment by Jacob Evans, the motion passed 3-2 (Maxwell, Jami, Stacy yes; Paulson, Rivera no).

Key Outcomes

• Approved minutes of February 13, 2024.
• Approved Consent Calendar (4-0).
• Approved Item 7 (CS-109 amendment) (4-0).
• Approved Item 8 (Zoo MOU) (4-0).
• Approved Item 9 (Santa Clara Intertie amendment) (4-0).
• Approved Item 10 (Treasure Island MOU) (4-0).
• Approved Item 11 (ARPA fund acceptance) (4-0).
• Approved Item 12 (Wastewater credit facility) (5-0).
• Approved Item 13 (CleanPowerSF credit agreement) (5-0).
• Approved remote public comment procedure (3-2).