San Francisco Public Utilities Commission Regular Meeting – December 10, 2024

The San Francisco Public Utilities Commission (SFPUC) held its regular meeting on Tuesday, December 10, 2024, at 9:30 AM. The meeting included a land acknowledgment, approval of minutes, a continued Citizens’ Advisory Committee annual report, a detailed General Manager’s Report covering policy, capital programs, audits, budgets, and wastewater projects, a consent calendar of seven contracts, and a regular calendar with a childcare center lease, surplus land sales, major program management contract, meter diagnostic services, cross-connection control rule updates, and a grant to the San Francisco Unified School District. The meeting recessed for approximately 30 minutes for a mayoral event and experienced initial technical difficulties with remote public comment, which were later resolved. Closed session addressed several legal matters.

Consent Calendar

• Item 7a-7g: Approved unanimously with no public comment. Items included contracts for corrosion consulting, fire/life safety systems, water main and sewer replacement on Grand View Avenue (contract WD-2875, $10,145,959), job order contract modifications, sewer pipe replacement (WW-760, $9,228,23), and equipment/software maintenance for water pollution control plants (CS-1248). Item 7B was questioned by Commissioner Arce regarding a micro-LBE contractor’s license; staff confirmed the prime must hold the C16 license.

Public Comments & Testimony

• Dave Warner (speaking during general public comment and on item 6B): Expressed concerns about governance, stating the commission is not given real choice on key financial plans or water rates. He also argued that capital project cost variance reports may be misleading because budgets are reset annually.
• Peter Drechmar (Policy Director, Tuolumne River Trust): During general public comment, he noted that the annual water resources report shows regional water deliveries at 179,000 acre-feet (far below the 2020 Urban Water Management Plan projection of 216,000 acre-feet for 2025). He urged prioritizing accurate demand projections in the upcoming 2025 Urban Water Management Plan to avoid over-investment in unnecessary supplies.
• James Bryant and Demetrius Williams (local contractors): During the Wastewater Enterprise quarterly report, they thanked the SFPUC for contracting opportunities, noted a 45% hyperlocal participation rate on projects, and expressed desire for continued access to major projects such as Headworks and Biosolids.

Discussion Items

• Item 5 – CAC Annual Report: Continued to the next meeting because the presenter was unavailable. Unanimously approved continuation.
• Item 6 – General Manager’s Report:
  • 6a – Annual Policy & Government Affairs Update (Emily Lamb): Highlighted securing Board of Supervisors approval of the biannual budget, supporting the $10 billion state climate bond (approved by voters), engaging on nearly 300 state bills, and advocating for federal low-income water assistance. The team will brief incoming elected officials in January 2025.
  • 6b & 6c – Water Enterprise CIP & Water System Improvement Program (Katie Miller): Reported 52 water enterprise projects with a total $4.0 billion budget. 52 regional WSIP projects are 99% complete. Noted one major bid variance: the Sunol Valley Ozone project low bid was 28% ($40 million) above the engineer’s estimate; the contract was awarded with funds from a future budget. Commissioner Stacy asked about Lake Merced water level restoration delays – attributed to Daly City staffing shortages.
  • 6d – Audit & Performance Review Q1 (Irella Blackwood): Completed 7 audits in Q1. The Revenue Bond Oversight Committee will sunset in January 2025; the audit bureau will assume oversight functions. 11 audit recommendations were closed during Q1.
  • 6e – Budgetary Report Q1 (Laura Bush): Projected operating shortfalls for water ($7.3M) and wastewater ($6.6M) due to lower retail volumes and delayed billing ( $15M outstanding, $9M already collected). Power and CleanPowerSF showed positive results ($56.6M and $31.8M) due to lower power purchase costs. All financial policy targets are expected to be met. Commissioner Jamdar questioned the across-the-board decline in retail sales; staff cited slower-than-expected economic recovery and return to office.
  • 6f – Wastewater Enterprise Quarterly Report (Bessie Tan): Provided updates on the Sewer System Improvement Program (SSIP) – 127 projects, 67.7% complete. Highlighted new sewer lining techniques and the Treasure Island resource recovery plant (40% complete). Commissioner Arce praised LBE contracting and requested future presentations on LBE subcontracting percentages on major projects.
• Item 11 – Award Program Management Contract to HDR Stantec JV (Katie Miller): Awarded a 10-year, $80 million contract to support water and Hetch Hetchy capital programs. The joint venture scored highest in all proposal phases and committed 20.83% LBE (15 firms). Commissioner Tom questioned the value of external expertise; Miller cited need for global best practices in cost estimating, technology, and operations/maintenance. Commissioner Stacy noted the program management contract will help transition from one-time WSIP to a rolling 10-year CIP.
• Item 14 – Meter Maintenance Diagnostic Services (Steve Ritchie): Awarded a 5-year, $2.4 million contract to Olea Networks for large meter diagnostic services (part of water loss reduction). The proposal included 78% LBE participation. Commissioner Leverone praised the high LBE percentage.
• Item 15 – Amended Cross-Connection Control Regulations (Andrew Degraca): Adopted unanimously. The state updated rules for the first time in 35 years, requiring all services (including residential and fire services) to be evaluated. Over 35,000 devices in San Francisco; fire service backflow preventers must be replaced above ground over 10 years.
• Item 16 – Grant to SFUSD for Environmental Education (Blair Randall): Approved a three-year, $2,228,775 grant ($742,925 annually) to support teacher and student learning about SFPUC operations, green infrastructure, and career awareness. Components include student climate action fellowships, teacher professional development, and updated K-12 watershed curricula. Commissioner Arce recused himself (wife on SF Board of Education), excused by vote.

Key Outcomes

• Approval of Minutes (October 22 and November 12, 2024): Unanimously approved.
• Consent Calendar (Items 7a-7g): Unanimously approved.
• Lease to C5 Children’s School (Item 8): Approved a 5-year lease (with one 4-year extension option) at $1/year for the childcare center at 525 Golden Gate Avenue. The lease requires prioritizing children of PUC employees, then other city employees, and local families eligible for subsidized care.
• Surplus Land Declarations & Sale (Items 9 and 10):
  • Item 9: Adopted findings and approved sale of Parcel 9 (50-foot strip in San Bruno) to the City of San Bruno for $5,000, appraised value. Property is used as a public road and encumbered with BART easements.
  • Item 10: Adopted findings and approved sale of a 46,097-square-foot remnant of Parcel 21 in South San Francisco for $132,000, facilitating the city’s civic campus and affordable housing projects. HCD confirmed exempt surplus land status.
• Item 11 – Program Management Contract: Awarded to HDR Stantec Joint Venture, subject to Board of Supervisors approval (Charter Section 9.118).
• Item 12 – Contract Duration Increase (WW-697): Approved 316-day extension with no cost change.
• Item 13 – Contract Duration Increase (WW-705): Approved 155-day extension with no cost change.
• Item 14 – Meter Diagnostic Services: Awarded to Olea Networks, Inc.
• Item 15 – Cross-Connection Control Amendments: Adopted unanimously.
• Item 16 – SFUSD Grant: Approved, with Commissioner Arce recused.
• Closed Session Action: The commission recommended settlements for items 21, 22, and 23 (unlitigated claims). No action taken on items 24-26 (existing litigation – discussion only). Attorney-client privilege was asserted for all closed session items.