San Francisco Public Utilities Commission Meeting – March 11, 2025

The San Francisco Public Utilities Commission (SFPUC) held its regular meeting on Tuesday, March 11, 2025, at 9:45 AM. Commissioners present: President Stacy, Vice President Arce, Commissioner Jamdar, and Commissioner Leveroni (quorum achieved). The meeting covered the General Manager's report, including quarterly audit and performance review, an emergency firefighting water system presentation, and the Hetch Hetchy Capital Improvement Program. The consent calendar and seven regular calendar items were approved. No public comments were received due to a technical issue with the remote call-in code, though the commission later corrected the code and offered an opportunity for comment.

Consent Calendar

• The consent calendar (Items 6A–6C) was approved unanimously (4-0) with no discussion or public comment.

Public Comments & Testimony

• No members of the public provided oral or written comment on any agenda item. The commission acknowledged a technical problem with the remote access code earlier in the meeting and allowed time for callers to join; no callers were in the queue.

Discussion Items

• Quarterly Audit and Performance Review (Item 5A): CFO Nancy Halm presented the Audit Bureau’s second-quarter report (ending Dec. 31, 2024). Highlights: 17 audits completed (14 financial, 3 performance); 7 audits in progress; 12 scheduled for Q3/Q4. A spotlighted Budget and Legislative Analyst performance audit on Chapter 6 delegated authority found 7 findings with 16 recommendations (14 SFPUC-specific). Management concurred with all recommendations and has already implemented most. 17 open audit recommendations remain. Vice President Arce and President Stacy commended the team’s professionalism and the agency’s strong internal controls.

• Emergency Firefighting Water System (Item 5B): AGM Steve Ritchie presented the Auxiliary Water Supply System (AWSS), now called the Emergency Firefighting Water System (EFWS). Key facts: San Francisco has 8,552 low-pressure hydrants (potable system) and 9,887 total hydrants; 1,300 are high-pressure hydrants attached to the EFWS. The system includes 154 cisterns (70,000 gallons each), 135 miles of pipe, three reservoirs (Twin Peaks, Ashbury, Jones Street), two pump stations (using bay water), and fire boat manifolds. Since 2010, 30 new cisterns have been added (mostly on the west side). A planning study estimated at least $4 billion by 2046 for full city coverage, but the PUC is developing a dual-potable emergency system (co-funded by ratepayers and General Fund) for the west side, with $145 million in the 10-year CIP. Recent drills and a fire boat demonstration (Jan. 18, 2025) showcased readiness. Commissioners asked about pump station backup generators (have diesel/electric with backup) and coverage gaps; AGM Ritchie noted that cisterns and the existing potable system provide substantial protection, and the city’s fire station density is higher than Los Angeles.

• Hetch Hetchy Capital Improvement Program (Item 5C): Katie Miller, Director of Water Capital Programs, reported on 22 projects (14 pre-construction, 7 in construction, 1 in closeout) with $1.9 billion total budget, $404 million spent as of Dec. 31, 2024 ($65 million in Q2). Cost variances: Moccasin Powerhouse upgrade (+$15M), Moccasin Dam Reservoir improvements (+$23M due to concrete/steel escalation). The 100-day winter shutdown (Dec. 5–Mar. 10) was completed, with O’Shaughnessy Dam outlet works and tunnel repairs progressing. Mountain tunnel grouting is 50% complete; negotiations continue with contractor. A nonconformance notice was issued for a building above a shaft (requires tear-out and rebuild). Vice President Arce thanked staff and noted that investments aim to extend asset life beyond 100 years.

• General Manager’s Report/EPA Litigation (part of Item 5): GM Herrera reported that the U.S. Supreme Court ruled favorably in San Francisco v. EPA, holding that Clean Water Act permits must limit discharges, not receiving water quality. President Stacy emphasized that the PUC did not seek to undermine the Clean Water Act and that the narrow ruling protects ratepayers from potentially expensive open-ended regulations.

• Project Learning Partnership Grant Program (Item 7): Carmen Knighton presented proposed rule modifications to increase grant amounts (from $105,000 to $130,000 for large cohorts; from $75,000 to $95,000 for small cohorts) and add performance measures. Program has served nearly 5,000 youth since 2012; 33% of participants from southeast neighborhoods. Approved unanimously (4-0).

• Water Revenue Bonds Refunding (Item 8): CFO Nancy Halm (with outside counsel) presented authorization to issue up to $1.889 billion in refunding bonds (2025 Series A, B, C) to refinance up to 30% of outstanding callable bonds, expecting net present value savings of approximately $58 million (or more). The agency’s bond ratings (Moody’s, S&P) were affirmed with stable outlook. Approved unanimously (4-0).

• Contract Awards and Amendments (Items 9–12):

  • Item 9: Awarded Contract HH-1016 (San Joaquin Pipeline Valve Improvements Phases 2B/2C) to Ranger Pipelines Inc. for $50,296,818 (lowest of five bids; engineer estimate $57M). Duration 1,204 days. Approved (4-0).
  • Item 10: Approved 283-day duration increase (no cost change) for Contract WW-662R (Southeast Water Pollution Control Plant Power Feed upgrades) to 1,938 days. Construction is 84% complete. Approved (4-0).
  • Items 11 & 12 (presented together, voted separately): Ocean Beach Climate Change Adaptation Project. Item 11: Amendment No. 3 to design contract with Moffatt & Nichol-AGS JV (increase not specified in transcript but requested) to address California Coastal Commission-mandated changes after a unanimous CDP approval (Nov. 2024). Item 12: Increase cost contingency by $2 million and duration contingency by 1,095 days for short-term erosion mitigation contract (sandbags, sand import). Both approved (4-0 each). President Stacy noted the importance of balancing ratepayer costs with recreational benefits.

Key Outcomes

• The Commission voted unanimously (4-0) on all items: approval of minutes, consent calendar, all regular calendar items (7–12), and authorization to enter closed session (asserting attorney-client privilege) and later approve settlements for three claims.
• The commission will receive a follow-up report on implementation of audit recommendations from the Budget and Legislative Analyst.
• The Ocean Beach project will proceed with redesigned elements per Coastal Commission conditions; negotiations with partner agencies continue.
• The water revenue bond refunding will go to market in early April 2025.