San Francisco Public Utilities Commission Meeting Summary – January 14, 2025

The San Francisco Public Utilities Commission (SFPUC) met on January 14, 2025, to discuss and vote on a range of infrastructure, budget, and operational items. The meeting included a public hearing on FY2025-26 budget priorities, approvals of multiple contract modifications and new projects, reports from the Citizens Advisory Committee (CAC), and public comments on fire safety, water management, and procurement practices. All major consent and regular calendar items were approved except the budget hearing, which was discussion-only.

Citizens Advisory Committee (CAC) 2023-2024 Annual Report

• Moses (Moises), CAC Chair, presented the committee's annual report, highlighting priorities on affordability and equity. He noted that affordability policy is being closely monitored and that Treasure Island residents face power outage rates four times higher than the rest of San Francisco. He also announced he is stepping down to join Mayor Lurie's administration. Commissioner Arce committed to attending the next CAC meeting on January 21, 2025.
• Community member Jody Sobel, a CAC member, elaborated on Treasure Island outages: over 18 outages per year, each lasting 4-5 hours, affecting a population that is over 60% low-income. She urged the Commission to take action on a CAC resolution requesting an engineering analysis and oversight of Treasure Island power infrastructure.
• Public commenters Dave Warner and Peter Dreckfire praised the CAC's work and echoed support for its priorities.

Public Comments & Testimony

• Francisco de Casta called for a presentation on the SFPUC's emergency firefighting system in light of Los Angeles wildfires, and requested a review of a 15-year-old plan (the “Amazon document”) linked to the source system improvement project.
• Jason Foster highlighted a December 20, 2024 performance audit by the San Francisco Budget and Legislative Analyst, noting findings on procurement, vendor management, and contract accountability. He urged better staffing and tools for capital project delivery.
• Mary Butterwick urged the Commission to revisit its design drought policy (currently 8.5 years) and align flow standards on the Tuolumne River with the Bay-Delta Plan, criticizing the Tuolumne River Voluntary Agreement as a delay tactic.
• Dave Warner noted that the water enterprise capital improvement plan showed $600 million in cost overruns (about 20%) on budgeted projects already in progress as of Q4 FY2024.
• Peter Dreckfire called for the performance audit to be placed on the next agenda, raised concerns about change orders and cost overruns, and mentioned the SFPUC's lawsuit against the EPA regarding sewage discharges. He also noted that commercial salmon season has been closed for two seasons.
• During the consent calendar, Jason Foster questioned contract cost growth and transparency, particularly on items 7A (O'Shaughnessy Dam) and 7D (Customer Care and Billing).
• On Item 11 (Mountain Tunnel), Jason Foster criticized the de-scoping of work and subsequent cost increases as frustrating to ratepayers.

Discussion Items

• Item 6a: Interim Financing Program Introduction – Nikolai Skolarov presented a plan to expand the SFPUC's short-term credit facilities by $950 million (to a total authorized capacity of $2.45 billion) to lower financing costs for capital projects. The program uses commercial paper and bank facilities to avoid premature bond issuance. The Board of Supervisors unanimously approved the expansion effective December 25, 2024. The Commission will vote on specific facilities at the February 11, 2025 meeting. Commissioner Leveroni asked about commercial paper terms and received clarification.
• Item 9: Public Hearing on FY2025-26 Budget Priorities – Laura Bush presented the budget timeline and three priorities: affordability, responsible management, and investing where it matters. The FY2026 budget is the second year of a two-year fixed budget with minimal changes. She noted a 10-year capital plan of $11.8 billion (as adopted last year). Commissioners discussed affordability, workforce development, local hiring, and the balance between operational risk and ratepayer impacts. Commissioner Arce emphasized support for programs like workforce development and local contracting. The hearing was for discussion only; adoption will occur at the February 11, 2025 meeting.
• Item 8: Radio Communications Site Lease Amendment – Josh Keene presented an amendment to expand the lease at Mount Allison for SCADA and emergency radio communications. The rent increases from $5,700/month to just over $9,000/month (59% increase). The site is critical for fire and emergency coordination in the watershed. Approved unanimously.
• Item 10: Southeast Treatment Plant Buildings Project – Robert Mao presented a $15.27 million project to replace three end-of-life buildings with two new mass timber structures, improving workspace and safety for wastewater staff. The project is LEED-designed and will be the first mass timber building designed by public staff in San Francisco. Environmental review was approved in December 2024. Approved unanimously.
• Item 11: Mountain Tunnel Improvements Contract Modification – Randy Anderson requested two approvals: (1) a deductive change order removing $15.77 million in scope (South Fork siphon extension and roadway work) due to safety and constructibility issues, and (2) a $13.03 million increase in construction cost contingency for unanticipated conditions (tunnel lining repair and lining changes). The revised cost limit is $150.17 million, $2.7 million less than the original. Commissioner questions focused on the safety issue and the deferral of work to a future contract. Approved unanimously after public comment.
• Item 12: San Joaquin Pipeline Valve and Safe Entry Improvements Phase 2A – Jimmy Lung requested an increase of $2.3 million and 205 calendar days to purchase large-diameter valves for the later Phase 2B contract to meet an outage timeline. Approved unanimously.
• Item 13: Sunol Valley Water Treatment Plant Ozonation Amendment – Brian DeSorr requested a $9.6 million increase and 4-year extension for engineering services during construction of the ozone facility, including support for a new pump station and O&M. The construction contract (WD-2897) came in at $234.7 million, significantly over the original $183 million estimate. Commissioners questioned cost growth and scope additions. Approved unanimously.
• Item 15: Items Initiated by Commissioners – Commissioner Arce raised two topics: (1) potential state legislation to dissolve the California Independent System Operator (CAISO) and consolidate grid control regionally, and (2) future plans for Hummingbird Farm, a partnership with PODER for wetland restoration and workforce development. Commissioner Jamdar expressed interest in aligning with CAC power subcommittee priorities on affordability and climate action. President Stacy acknowledged these items for future discussion.

Consent Calendar

• Item 7a: Amendment to Contract PRO.0017 for O'Shaughnessy Dam Outlet Works – not-to-exceed $5,250,000 (9.5 years).
• Item 7b: Contract HH-1009 for San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3.
• Item 7c: Contract JOC-93 for General Engineering Construction – not-to-exceed $7,500,000 (5 years).
• Item 7d: Contract PRO.0298 for Customer Care and Billing Transformation to TMG Utility Advisory Services, Inc. All consent items were approved unanimously.

Key Outcomes

• Approved unanimously: Minutes of December 10, 2024 (Item 3).
• Approved unanimously: Consent Calendar (Items 7a-7d).
• Approved unanimously: Radio Communications Site Lease Amendment (Item 8).
• Approved unanimously: Southeast Treatment Plant Buildings Project (Item 10).
• Approved unanimously: Mountain Tunnel Improvements Contract Modification (Item 11).
• Approved unanimously: San Joaquin Pipeline Valve and Safe Entry Improvements Phase 2A (Item 12).
• Approved unanimously: Sunol Valley Water Treatment Plant Ozonation Amendment (Item 13).
• Approved unanimously: Motion to assert attorney-client privilege for closed session (Item 17) and the closed session settlement recommendation.
• Discussion only: FY2025-26 Budget Priorities Hearing (Item 9) – next steps include adoption at February 11, 2025 meeting.
• General Manager committed to scheduling a presentation on the emergency firefighting system at a future meeting.
• New business: Commissioner Arce initiated discussion on CAISO dissolution and Hummingbird Farm; Commissioner Jamdar expressed interest in CAC power subcommittee priorities.