SFPUC Commission Meeting Summary - February 25, 2025

The San Francisco Public Utilities Commission (SFPUC) held a regular meeting on February 25, 2025, at 9:30 AM. The Commission approved consent calendar items, several regular calendar contracts, and a revolving credit agreement with Wells Fargo, all part of the agency's broader financial and capital improvement efforts. Presentations covered workforce and small business outcomes, the Q2 FY 2024-25 budget status, a capital finance introduction, and agency updates. The meeting concluded with closed session and a tribute to former Commissioner FX Crowley.

Consent Calendar

• Approved the minutes of the February 11, 2025 meeting.
• Approved the Consent Calendar Items 7A and 7C (Item 7B withdrawn).

Public Comments & Testimony

• Peter Dreckmeyer, Policy Director for the Tuolumne River Trust (General Public Comment): Criticized SFPUC staff for ignoring commission directives and resolutions, citing 2019 and 2020 resolutions on the Tuolumne River Voluntary Agreement. He questioned the design drought policy and risk assessment, stating the science behind fish models has been panned and that the SFPUC never responded to a peer review. He urged commissioners to act as a check on staff.

Discussion Items

• Item 5A - Local Community Workers and Small Businesses Report: Ben Poole (Director of Workforce and Economic Program Services) and Wendy Macy (Chief People Officer) presented outcomes for sewer and water projects. Highlights included: 34% local hiring (above city requirement) on the Sewer System Improvement Program (SSIP), 57% local resident apprentice utilization (above 50% requirement), $110 million in wages to San Francisco residents, 312 LBEs awarded 950+ contracts worth over $862 million, and project-specific achievements like the Southeast Community Facility (1550 Evans), which exceeded local hiring at 39%, apprentice utilization at 62%, and LBE participation at 31%. The presentation also covered HR recruitment efforts including 15+ career fairs by Olu Fadnipo, a San Francisco native recruiter. Commissioner Arce noted that PUC averages 41% local participation and 60% local apprentices citywide, comparing favorably to the city average of 33% and 49% respectively.
• Item 5B - FY 2024-25 2nd Quarter Budget Status Report: Anna Dooning presented the Q2 report (actuals through December). Key points: Water enterprise revenues down due to lower retail volumes, offset by lower nonpersonnel costs, but overtime is over budget due to the Hetchy shutdown; wastewater revenues down, offset by lower costs; power enterprise lower retail volumes but higher wholesale sales; CleanPowerSF lower retail sales due to lower rates; all financial policy targets are being met. Commissioner Arce noted that CleanPowerSF's $40.5 million general reserve will carry over to next year.
• Item 5C - Introduction to Capital Finance and Bonds: Nikolai Sklarov (Capital Finance Director) provided an educational overview on bonds, covering intergenerational equity, tax-exempt borrowing, WIFIA loans, and the importance of maintaining high credit ratings. He noted that the SFPUC has about $11 billion in debt outstanding and plans to issue $10 billion over the next 10 years, including a refinancing in March and new money in April.
• Item 5D - Report on Recent SFPUC Activities: Commissioner Leveroni noted the passing of former Commissioner FX Crowley. Commissioner Arce thanked General Manager Dennis Herrera for authorizing San Francisco's first-in-the-nation mandatory local hiring policy when he was City Attorney.
• Item 6 - Bay Area Water Supply and Conservation Agency (BAWSCA) Report: Tom Francis, BAWSCA representative, praised the annual wholesale customer meeting held the prior week at the Millbury campus, with 30 representatives. Topics included emergency preparedness and the Moccasin penstocks project, which is likely to be more expensive and take longer than originally planned.
• Item 8 - Revolving Credit Agreement with Wells Fargo: Approved a $200 million revolving credit agreement for two $100 million facilities (water and power enterprises). Nikolai Sklarov explained these are standby facilities to manage interim funding, with SOFR-based rates, and will not be the first choice for borrowing given the current commercial paper rates. The facilities are extendable up to nine years.
• Item 9 - Cal Water Bear Gulch District Expansion: Approved the 4th Amendment to the Individual Water Sales Contract with California Water Service Company, updating the service area map to include Flood Park in San Mateo County. No other changes to service area or contract terms were made.
• Item 10 - Amendments to Specialized and Technical As-Needed Services Contracts: Approved Amendments No. 1 to four contracts (Stantec/JHCE, AECOM/WRE, Lee Inc.) increasing each by an unspecified amount. Steve Ritchie explained the increases are needed to support additional capital improvement activities in the Hetch Hetchy area, including asset management and regulatory compliance.
• Item 11 - Sunol Valley Water Treatment Plant Short-Term Improvements: Adopted the refined Mitigation Monitoring and Reporting Program (MMRP) and awarded Contract No. WD-2909 to Western Water Constructors Inc. for $44.9 million. Five bids were received; the engineer's estimate was $47.4 million. Work includes rehabilitating 1960s-70s concrete sedimentation basins, replacing sludge pumps, and installing a utility water pump station for the upcoming ozonation facility.
• Item 12 - EXARO Technologies Duration Increase: Approved a 365-calendar-day increase for Cathodic Protection for Transmission Pipelines Phase 2, extending the duration contingency due to PG&E delays in providing utility power. No contract amount change.
• Item 13 - Channel Force Main Intertie Increase: Approved a $2 million cost contingency increase and 350-day duration increase for Contract No. WW-723R with Anvil Builders Inc., for dewatering and utility delays. The revised contract limit is $90,375,899 and duration is 1,131 calendar days.
• Item 14 - Hetchy Capital Improvement Projects Construction Management Amendments: Approved Amendments No. 1 to three contracts (AECOM/EMS, Avila, HECHE CM Partners) increasing each by $2 million for a new not-to-exceed amount of $6 million each's authority. Lucas Hoffman explained the need for additional construction management staff due to multiple active projects, technical demands, and outages requiring overtime.
• Item 16 - Items Initiated by Commissioners: Commissioner Jamdar requested a briefing on the San Francisco Climate Action Plan, including Bay Area Air District zero-NOx rules. Commissioner Arce reported on Treasure Island power outages, noting five outages this year and a resolution from the Citizens Advisory Committee, and committed to working with TIDA on solutions.

Key Outcomes

• Approved the minutes of February 11, 2025 meeting (4-0).
• Approved Consent Calendar Items 7A and 7C (4-0).
• Approved Item 8 – Wells Fargo Revolving Credit Agreement (4-0).
• Approved Item 9 – Cal Water Bear Gulch expansion (4-0).
• Approved Item 10 – Amendments to specialized technical services contracts (4-0).
• Approved Item 11 – MMRP adopted and contract awarded to Western Water Constructors for $44.9 million (4-0).
• Approved Item 12 – EXARO Technologies duration increase (4-0).
• Approved Item 13 – Anvil Builders Interior cost and duration increase (4-0).
• Approved Item 14 – Construction Management Amendments (4-0).
• Moved to not disclose closed session discussions (4-0).

Closed Session

• The Commission met in closed session to discuss City and County of San Francisco v. Pacific Gas and Electric Company and voted to recommend that the Board approve the settlement referenced in item 18. The Commission voted not to disclose closed session discussions.