San Francisco Public Utilities Commission Meeting - May 28, 2024

This meeting of the San Francisco Public Utilities Commission (SFPUC) convened at 9:30 AM with a quorum present (President Paulson, Vice President Rivera, Commissioner Jami, Commissioner Stacy). The commission approved a consent calendar of seven items, debated the Stonestown development agreement and a major water supply planning amendment, and unanimously approved a $75 million renewable energy contract. Public comment highlighted community concerns about sewage infrastructure in the Bayview, water supply adequacy, and strong support for the Stonestown project.

Consent Calendar

• Item 7a: Awarded Contract No. WD-2903 for site remediation at 520 John Muir Drive Phase 2 to Anvil Builders, Inc.
• Item 7b: Awarded Contract No. WW-751 for as-needed sewer inspection to Pipe and Plant Solutions, Inc.
• Item 7c: Awarded four contracts (PRO.0291 A-D) for professional energy engineering consulting services to Veregy Pacific LLC, kW Engineering, Inc., and others.
• Item 7d: Approved a 90-calendar-day extension to the duration contingency for Contract No. WW-719A (Folsom Area Stormwater Improvements), citing a conflicting PG&E electrical transmission line larger than expected.
• Item 7e: Approved Amendment No. 3 to Contract No. PRO.0028 (New Headworks Facility) with HDR Engineering, Inc.
• Item 7f: Accepted work performed by Wilson Utility Construction Company under Contract No. HH-1007 (Transmission Line 7/8 Upgrades).
• Item 7g: Accepted work performed by Hernandez Engineering under Contract No. WD-2819 (As-Needed Water Main Replacement).

All consent calendar items were approved unanimously (4-0).

Public Comments & Testimony

• General Public Comment: A speaker urged the commission to read the Emerson document regarding Bayview/Hunter's Point community benefits and the SSIP system improvement project. Joy Somphon (Bayview resident) requested more advocacy and outreach for the 94124 area regarding sewage issues.
• Peter Dreckmeyer (Policy Director, Tuolumne River Trust): Noted that as of May 2024, the SFPUC has 481,000 acre-feet of water entitlement, demand has been under 200 MGD (225,000 acre-feet/year) for nine years, and reservoir storage can last over six years. He argued that these figures should be considered when investing in expensive alternative water supplies and requested a discussion on the alternative water supply plan at the June 11 meeting.
• Stonestown Development (Item 11): Multiple speakers supported the project. Mauricio Chavez (NorCal Carpenters Union) said it will create 800 construction jobs per year. Rudy Gonzalez (Secretary-Treasurer, SF Building Trades Council) and Jake Price (Housing Action Coalition) also voiced strong support. Neko Stewart, a local resident, praised the transformation of surface parking lots into housing and parks.
• Los Vaqueros Reservoir (Item 13): Peter Dreckmeyer again spoke, arguing that the 20,000 acre-feet of storage would cost $13 million per year (over $260 million in 20 years) for water that is not needed given the SFPUC's current ample storage and declining demand.

Discussion Items

• Item 5a – Quarterly Audit and Performance Review Report: Irella Blackwood (Audit Director) presented. As of March 31, 2024, 21 audits (59% of the planned portfolio) were completed, with 29% in progress. The bureau conducted an inventory management assessment, finding overall dollar value accuracy of 98.2% (inaccuracies totaling ~$347,000). Key recommendations addressed field tracking system issues. 11 audit recommendations remain open. Commissioner questions focused on inventory scope and delays in rent collection from Crystal Springs Golf Partners.
• Item 5b – General Manager Report: General Manager Herrera reported that the SFPUC's two-year operating and capital budget (totaling over $7 billion) was approved by the Budget and Appropriations Committee with $6 million in cuts per year, and is proceeding to the full Board of Supervisors.
• Item 6 – Bay Area Water Supply and Conservation Agency (BAWSCA) Report: Nicole Sandkulla (BAWSCA CEO) affirmed BAWSCA's support for the recently adopted 8.8% wholesale water rate increase, citing necessary investments in the Hetch Hetchy system, capital improvements, and long-term water supply planning. She emphasized the importance of continued engagement.
• Item 11 – Stonestown Development Agreement: Molly Petrick presented a 43-acre mixed-use master plan with up to 3,500 housing units (20% affordable), six acres of parks, and commercial space. Commissioner Rivera expressed concern that the developer is not required to install the Emergency Firefighting Water System (EFWS); staff noted the fire department made that determination. Commissioner Stacey noted that the developer will pay an in-lieu fee for a mobile hose tender system. The commission authorized the General Manager to consent to the development agreement.
• Item 12 – CleanPowerSF Renewable Power Purchase Agreement: Julia O'Geen (Director of Origination and Power Supply) presented a 10-year, $75 million PPA with IP Easley LLC for a 50 MW slice of a 400 MW solar project in Riverside County. The project uses U.S.-made components and has a project labor agreement. Commissioner Jami asked about portfolio management, time coincidence, and battery storage. The contract was approved.
• Item 13 – Los Vaqueros Reservoir Expansion Project Planning Amendment: Steve Ritchie (Assistant GM for Water) provided a detailed presentation on the multi-party project to expand the reservoir by 115,000 acre-feet and build a pipeline to the South Bay Aqueduct. The amendment extends the planning agreement by 12 months (no additional funds). The SFPUC is considering purchasing 10,000–20,000 acre-feet of storage at an average annual cost of $9.5–$13 million. Key challenges include securing water rights, conveying water through the South Bay Aqueduct, and institutional complexity. The commission approved the amendment.
• Item 14 – Onsite Water Reuse Grant Program: Taylor Nakudian (Water Resources Program Manager) presented modifications to lower potable water offset thresholds (e.g., 3.6 million gallons over 10 years for up to $200,000), shorten the required construction schedule from 4 to 2 years, and clarify requirements for prevailing wage, insurance, and grantee property ownership. The modifications were approved.

Key Outcomes

• Consent Calendar (Items 7a-7g): Approved unanimously (4-0).
• Item 8 (Contract with USDA Forest Service): Approved unanimously (4-0).
• Item 9 (Bay Corridor Phase 4 Water Improvements): Approved unanimously (4-0).
• Item 10 (Hayes Valley Sewer Improvements): Approved unanimously (4-0).
• Item 11 (Stonestown Development Agreement): Motion to authorize the General Manager to consent passed 4-0 (Vice President Rivera and others voiced concerns about fire safety; the item was approved).
• Item 12 (CleanPowerSF PPA): Approved unanimously (4-0).
• Item 13 (Los Vaqueros Planning Amendment): Approved unanimously (4-0).
• Item 14 (Onsite Water Reuse Grant Program Modifications): Approved unanimously (4-0).
• Next Steps: The alternative water supply plan discussion requested by Commissioner Stacy will occur at the June 11, 2024 meeting. The SFPUC staff will continue negotiating the Los Vaqueros project and bring a final decision to the commission within 6–12 months.