San Francisco Public Utilities Commission Meeting – May 27, 2025

The San Francisco Public Utilities Commission (SFPUC) held its regular meeting on Tuesday, May 27, 2025, at 9:30 AM. The meeting included a disclosure training for commissioners, a quarterly budget status report, approval of a consent calendar, authorization of a major bond issuance up to $1.53 billion, approval of a contract increase for the Moccasin Powerhouse generator rehabilitation, and closed session discussions. All votes were unanimous.

Consent Calendar

• Item 6a: Awarded four Master As-Needed HVAC and Mechanical Services contracts (PW-012.A, B, C, D), each with a not-to-exceed amount of $4,500,000 and a five-year duration.
• Item 6b: Approved Modification No. 1 to Job Order Contract No. JOC-99 with Marinship Development Interest LLC, increasing the contract amount by $2,500,000.
• Item 6c: Approved Modification No. 1 to Job Order Contract No. JOC-103 with Cal State Constructors, Inc. for general engineering construction in multiple counties.
• Item 6d: Approved and adopted the General Manager’s finding that ABB Medium Voltage Variable-Frequency Drives are necessary to match existing products at SFPUC Wastewater Enterprise facilities.
• The consent calendar was approved unanimously (5-0).

Public Comments & Testimony

• Peter Dreckmark (Policy Director, Tuolumne River Trust) spoke during general public comment (Item 4), welcoming new Commissioner Thurlow and reporting that 100 spring-run Chinook salmon had entered the Tuolumne River. He expressed concern about the fish needing cold water through the summer and urged the SFPUC to help find a solution.
• During Item 5A (disclosure training), Dreckmark stated he had heard the SFPUC is close to being maxed out on borrowing capacity, noting that debt service alone could reach $1.8 billion by 2047. He criticized the Alternative Water Supply Plan as potentially costly ($17–25 billion) and requested a commission workshop on the topic, citing past productive workshops from 2020–2022.
• During Item 7 (bond issuance), Dreckmark accused SFPUC staff of spreading disinformation on demand projections and the design drought, and again requested a workshop on the Alternative Water Supply Plan. He stated that commissioners are not elected and are overly reliant on staff, which he said leads to long-term problems.

Discussion Items

• Item 5A – Disclosure Training for Commissioners: Presented by disclosure counsel Aaron Pham and Stephen Spitz of Orrick, Herrington & Sutcliffe. The training covered federal securities law obligations regarding the Preliminary Official Statement (POS) and Final Official Statement (OS) for bond offerings. Commissioners were advised to create a culture of transparency, rely on staff, and focus on material risks they personally know. Commissioner Leveroni asked about past pitfalls in disclosure; the attorneys cited cases where agencies did not acknowledge known problems. The training was followed by public comment.
• Item 5B – Quarterly Budget Status Report (Q3 FY2024-25): Presented by Budget Director Anna Dunning. All enterprises (Water, Wastewater, Power, CleanPowerSF) are projecting positive operating results and exceeding financial policy targets. Key points: Water enterprise retail revenues slightly below budget due to lower volumes, offset by higher wholesale sales and interest earnings. Wastewater revenues below budget due to lower volumes and delayed stormwater surcharge collections; 8,600 accounts need to be opened, with 2,600 completed. Power enterprise and CleanPowerSF show surpluses due to lower power purchase prices and demand. The overtime budget transfer to the Board of Supervisors was approved. Commissioner Leveroni asked about the delayed billing issue; Nancy Hum reported that of 8,000 delayed bills from September, most are now resolved, with fewer than 1,000 remaining on estimated bills. The six-month accrual of $6 million from September has been collected. Commissioner Leveroni also asked about uncollected stormwater charges; staff will provide a follow-up on whether charges are retroactive.
• Item 7 – Authorization of Bond Issuance: Nicolai Sklarov (Capital Finance Director) presented a request to authorize up to $1.53 billion in Water Revenue Bonds (2025 Sub-Series D and E) to fund water enterprise capital projects and retire commercial paper, plus up to $1.056 billion in Sub-Series F to refund Build America Bonds (BABs). The transaction is a risk mitigation strategy due to potential loss of tax-exempt bond status and sequestration of the 35% federal subsidy for BABs (currently at 33% after sequestration). The BAB refunding could be postponed if market conditions are unfavorable. Commissioner Leveroni asked about the team (same advisors and bond counsel, with JP Morgan and Goldman Sachs as lead underwriters). Commissioner Thurlow asked about interest rate volatility; Sklarov explained that the spread between taxable and tax-exempt rates drives savings, and that decisions on the BAB refunding will be made closer to the pricing date. Commissioner Stacy requested a follow-up report at the June 24 meeting.
• Item 8 – Moccasin Powerhouse Generator Rehabilitation Contract Increase: A project manager presented a request to increase cost contingency by $1,600,000 and duration contingency by 331 calendar days for Contract DB-121R2 with General Electric Renewable Energy. The project replaces two hydro generators at the Moccasin Powerhouse (built 1969). During disassembly, a misalignment of 7 thousandths of an inch was found at the lower turbine guide bearing, requiring the collar to be machined off-site. The repaired parts are expected at the end of July 2025, with return to service in November 2025. Commissioner Leveroni noted the generators lasted 44 years (original) and now 5 years for the replacement. Commissioner Thurlow asked about the cause; the project manager attributed it to wear and tear over time. The item was approved unanimously.

Key Outcomes

• Minutes approved: Minutes of May 13, 2025, approved unanimously.
• Consent Calendar approved: Items 6a–6d passed unanimously.
• Item 7 approved: Authorized the issuance of up to $1.53 billion in Water Revenue Bonds (Sub-Series D and E) and up to $1.056 billion in Sub-Series F to refund Build America Bonds, with delegation to the General Manager to appoint underwriters. The BAB refunding may proceed or be postponed depending on market conditions. A follow-up report is scheduled for the June 24, 2025 meeting.
• Item 8 approved: Approved a $1,600,000 increase in cost contingency and 331 calendar days extension for the Moccasin Powerhouse generator rehabilitation contract.
• Closed Session: The commission voted to assert attorney-client privilege and entered closed session. Upon returning, the commission reported recommending both settlements discussed in closed session. The commission voted not to disclose the closed session discussion.
• Public comment: The commission heard public comments from Peter Dreckmark on multiple items, including requests for a workshop on the Alternative Water Supply Plan.