President Stacy.

Here.

Vice President Arce.

The meeting is starting.

Oh, we expect President Arce or Vice President Arcee shortly.

Yes.

Commissioner Jamdar here.

Commissioner Leveroni.

Here.

Commissioner Thurlow.

Here.

You have a quorum.

Thank you.

Before calling the first item, I'd like to announce that the San Francisco Public Utilities Commission acknowledges that it owns and are stewards of the unceded lands located within the ethno-historic territory of the Mawekma Aloney tribe and other familial descendants of the historic federally recognized Mission San Jose Verona Band of Alameda County.

The SFPUC also recognizes that every citizen residing within the Greater Bay Area has and continues to benefit from the use and occupation of the Mawekma Alone tribe's aboriginal lands since before and after the San Francisco Public Utilities Commission's founding in 1932.

It is vitally important that we not only recognize the history of the tribal lands on which we reside, but also that we acknowledge and honor the fact that the Mawekma Alone people have established a working partnership with the SFPUC and our productive and flourishing members within the many greater San Francisco Bay Area communities today.

Please call the first item.

Third item.

Item three, approval of the minutes of September 9th, 2025.

Commissioners, are there any correct corrections, comments, additions to the minutes?

Seeing none, let's have public comment.

Remote callers, please raise your hand if you wish to provide comment on item three.

Are there any members of the public present who wish to comment on this item?

Seeing none, moderator, are there any calls who have their hand raised?

Miss Lanier, there are no callers who wish to be recognized.

Thank you.

Commissioners, could I have a motion and a second to approve the minutes, please?

So moved.

Um seconded.

Thank you.

President Stacy.

Aye.

Vice President Arce.

Commissioner Jamdar.

Aye.

Commissioner Lavaroni.

Aye.

Commissioner Thurlow.

Aye.

The item passes.

Item four, general public comment.

Members of the public may address the commission on matters that are within the commission's jurisdiction and are not on today's agenda.

Just to note that the commission values civic engagement and encourages respectful communication at the public meeting.

We ask that all public comment be made in a civil and courteous manner and that you refrain from the use of profanity.

Thank you.

Remote callers, please raise your hand if you wish to provide comment on item four.

Are there any members of the public present who wish to comment on this item?

Seeing none, moderator, are there any callers who have their hand raised?

Ms.

Lanier, there are two callers who wish to be recognized.

Thank you.

Caller, your line has been unmuted.

You have two minutes.

Thank you.

This is Peter Dreckmeyer, Policy Director for the Tuolamy River Trust.

It's a pretty long document.

I haven't had a chance to read it yet.

But I think it would be really helpful for the FFU to see to have a workshop to hear from experts.

We would love to have an NGO panel as we have in the past and to get familiar with the Tualmee River Volunteer Agreement.

We used to have pretty regular workshops.

And we haven't in quite a while.

We have a lot of new commissioners, so I think it would be in everyone's interest to really dig into the TRVA and see if we believe it has a chance of meeting the state water board's objective or if we need to move back to the Bay Delta plant.

Thank you very much.

Thank you caller for your comments.

Caller, your line has been unmuted.

You have two minutes.

Thank you.

My name is Maurice Rem.

I'm a longtime resident and current resident of San Francisco in the Bay Area and a recent retiree living on a fixed income.

I share, I think the committee's concerned about rate increases, and I'm calling to encourage you to do something about them.

Unless you do, it's going to get worse and worse.

Why?

I think one of the reasons or two of the reasons are exaggerated demand projections that lead to increased fixed costs and investment debt you would incur.

And as a result, rates will rise, similarly adjusting the design drought to reflect reality rather than fantasy, would be a way of keeping rates down.

It's good to be careful, but when people like me are paying for it, you have to have a design job that makes some sense.

Some people project that a design job would have a chance of happening one in 7,000 years, other people one in 25,000 years long and shortage.

People like me and people in the future will have to pay for not following the science.

Finally, may I respectfully suggest that you add to your agenda, perhaps in November, a preliminary overview of the upcoming budget process, so we don't have time to weigh in before there's a time crunch.

As I understand it in the past, you received the budget documents in January and then had to vote in February with very little time to make changes.

An update overview in November would allow the commissioners to influence what they receive in January using the best science demand projections and realistic design return period.

If you don't, you'll get more and more public distrust, I fear, and anger or concern like more about runway weight increases.

Thank you.

Thank you, caller, for your comments.

Ms.

Nair, there are no more callers who wish to be recognized.

Thank you.

Item five, report of the general manager.

Um the first item that we have is the quarterly budget status report for June of 2025 and the budget development update.

And um Anna Dooney will give that.

Make sure this works.

Great.

All right.

Good afternoon, commissioners.

Um, if we could pull up the slides.

My name's Anna Dunning.

I'm the budget director at the SFPEC.

And today I'm going to present on our fourth quarter financial results from last fiscal year, which ended in June, but also provide an update on our budget development process, which is currently underway.

So the good news is we are projecting positive operating results in all enterprises and Clean Power SF as we close last fiscal year.

All these figures that I'm about to share are preliminary.

The final year end results will be part of our official financial statements, which will be available later this fall.

I'm going to quickly run through what's going on in each enterprise.

All right, so in water, we're projecting around 18 million in surplus funding at year end.

This is due to slightly better than projected revenues, as well as high interest earnings, which we are seeing across the agency.

There are also some savings and operational costs contributing to this surplus.

Moving on to wastewater.

Though we're just slightly under budget in service charges, other sources came in higher this year, including a one-time payment from cost sharing on a capital project.

On the uses side, wastewater is benefiting from a debt refunding we did earlier this year, as well as savings across various operating costs.

Moving on to power.

On the power side, you're going to see some large figures here.

These trends are similar to prior quarters.

Overall, in the last fiscal year, we came in significantly under budget because the demand for power was much lower than projected.

You'll also see that on the uses side of the budget, which balances out lower sources, since both the volume of power purchases as well as the cost of power purchasing this year was much lower than forecasted.

This was similar in our clean power SF program, where both demand and rates were lower than we had budgeted.

We also set aside a reserve budget in clean power SF in order to build up fund balance, and that's contributing to the overall result.

All these savings across our budget mean that we are exceeding all of our financial policy targets, which are shown on this slide.

And that concludes my very quick and high-level overview of the fourth quarter budgetary results.

I can pause and answer any questions about that.

And if not, I can move on and share an update about our budget development process.

Questions, comments?

Commissioner John Darr.

Thank you, President Stacey.

Uh my question is: is Is there a plan to uh fold in some of these positive uh budget numbers into uh programs for the following year, or what is the use of this sort of surplus that we have?

Yeah, so all those funds go back into our fund balance.

And we very closely manage and monitor fund balance within each enterprise.

We make sure we're first hitting our fund balance minimums.

We have financial policy targets for all of those, and really that helps smooth out rate increases over time.

So it could potentially help smoothing out rate increases when we see positive operating results, and that's part of our budget development process is looking at where did we year and end the year, and that does that mean we can afford more operating cost increases or not?

So it's all part of the budget development process.

I don't think we're seeing any numbers there that are gonna drastically change our budget development, but it's an important input.

Okay.

Commissioner Leverone.

Thank you.

Um excellent work on the budgeting process.

As we've heard uh numerous times of callers calling in about the demand and our projections seem maybe to be off or you know can be discussed further.

Does that does any of that have anything to do with our numbers that we're seeing here that you know done so well with uh as far as the uh uh net profit, so to speak, network it varies by enterprise.

I will say on our revenue projections and water and wastewater, we're with we're within a couple percentage points of where we thought we'd be.

Um, and the savings you're seeing are sort of one-off cases, such as highest inter higher interest earnings.

We budgeted conservatively there because we didn't know what the market was going to do.

Um, and then we benefited in the end from that, but that's not something we'd necessarily want to count on every year.

Um, there was a one-time payment that came in late that's also wastewater is benefiting from.

So the big swings you're seeing, especially in water and wastewater, are not necessarily things that we're gonna build into our projections going forward, but we will consider them on a year-to-year basis and make sure that we're updating our future projections based on trends in the prior year.

That's part of the financial forecasting that we do.

Power, a lot of the variance you're seeing there has to do with volatility in the power market.

Um, so we do the best we can with the information we have at the time to project out, but it's very hard on an annual basis to get that number just right.

Thank you.

And I had a question.

Um, a couple of the water and wastewater, some of the savings uh reflect vacant positions.

Yes.

It seems counterintuitive to me that when we have vacant positions that that would result in greater costs elsewhere.

And I know the commission has had these conversations before, but does that mean that either employees are working more overtime or things aren't getting done, or we're contracting out more?

It's it's I'm curious about how that results in savings.

So, the most basic way to say that if you budgeted for a position and it is not filled, you're not paying the cost of that position.

So you're going to see savings probably in your personnel budget.

There are cases in which there those positions that are vacant are 24-7 positions key to operations, and therefore the remaining employees are going to work overtime.

So the savings is not as great in your personnel budget than just getting the vacancy savings.

Over time, if there's sort of continues to be a structural mismatch between the number of positions that we're able to staff and what's in the budget, you will see probably an increase in other costs to make up for the lack of people.

So that might be in contracting and paying for professional services to make up for that work or other areas of the budget.

But on an annual basis, when you see savings and personnel costs, it's usually because there are vacancies.

So I don't have a single answer for you there.

Thank you.

Commissioner Thurlow.

Can you help me understand why do we see different sort of directional changes in the wastewater revenue relative to the water revenue?

What causes that and and you know how often does that happen?

Yeah, great question.

That is a bit of an anomaly this year.

Typically, they do move in the same direction.

This year, what's happening in wastewater is that we are still matching uh parcels, specifically stormwater only parcels to account owners as we roll out the new stormwater surcharge.

That has taken um longer than we anticipated.

We're making good progress, but that's why we're behind there because there are still account owners that we're identifying to make sure that they can start paying their bills on those stormwater parcels.

So that accounts for the difference this year.

Great, thank you so much.

Thank you.

Should we take public comment on this portion of the presentation or should we wait till the end of the presentation?

We can we can take public comment if you like.

All right, why don't we take public comment just on the first part?

Thank you.

Remote callers, please raise your hand if you wish to provide comment on this item.

Are there any members of the public present who wish to comment?

Seeing none, moderator, are there any callers who have their hand raised?

Listen, Narrat, there are no callers in the queue.

Thank you.

I see a person who would like to speak.

Please approach the podium.

Hello, Commission Mike of Kingston Baby Hunters Point.

Um, so I just have a quick question.

Um I was just hearing about uh the remarks in regards to the employment and overtime and all that good beautiful wonderful stuff.

And so my question is the community budget agreement.

How many people from the Bayview Hunters Point community will be hired for this particular position for this job opportunity?

Um, what's the percentage and what will be the community budgets agreement for this specific um job opportunity in overtime?

How do we get in?

Hi.

So now is the time to provide public comment, but there's no response provided at this time.

Oh, but we'll we'll make a note of your question and your comment and see if we can circle back on this issue.

Thank you.

Let me just make that clear.

Make sure I understand.

Clearly understand and overstand.

So we don't have a community budget agreement for this yet.

No, that is not what I'm saying.

I'm saying this right now, you have the opportunity to provide public comment.

It's not a dialogue.

So all right.

Yeah, thank you.

Thank you.

Thank you for the comment.

Okay.

So with that, I'll move on to our budget development update.

We can pull up the slides again.

So, as you all probably well know, the SFPUC has an annual operating budget.

We update and adopt this typically in two-year cycles with occasional changes at the midpoint.

This summer we kicked off planning for the next two-year budget.

Uh, this here is just a reminder of what makes up our now nearly two billion dollar operating budget.

The largest portion of the budget funds capital, which includes both debt service on outstanding obligations as well as revenue, which we use to fund a portion of the capital program.

Our operating budget also includes staff, contracts, and programs that keep the SFPUC running daily.

In addition to developing the operating budget, we're also in the process of updating our 10-year capital plan.

The first two years of that plan are part of the operating budget and the budget that goes in front of you all and the Board of Supervisors eventually.

So the budget process commenced in July when the budget team, in coordination with general manager and our CFO, issued budget instructions to all enterprises and all divisions within the SFPC.

Our ultimate goal is to adopt a balanced budget that meets all of our financial policies.

That includes fund balance levels, debt service coverage, and importantly, affordability.

We have an affordability policy in both water and wastewater that sets limits on bill growth.

And we're very conscientious of how our bills are growing across enterprise overall.

So putting forth a budget that stays within all these financial limits will require trade-offs and means that we're both limiting our operating growth as well as reducing the baseline of the capital plan by nearly a billion dollars.

So, how are we going to do that?

We are in the process of figuring out how to do all of that and making sure that we're maintaining the highest levels of service and reliability while keeping the costs we pass along to ratepayers at a minimum.

This is an outline of our timeline over the next few months.

The budget and finance teams and partnership with leadership across the agency is reviewing and analyzing budget proposals and then developing a final budget to bring to you all in January.

So to give you a sense of what January looks like, um we have four special budget hearings scheduled.

Um so if you don't have these dates in your calendar, you might want to write them down because they are outside these typical meetings.

During these meetings, you will learn a lot more about this process, what we prioritized, and how these choices impact our rates.

From there, the budget will go on to the mayor's office and then the board of supervisors for their review.

And with that, I can answer questions about the budget process as well.

Commissioners' comments or questions, Vice President Arce.

Thank you, President Stacey.

Um thanks, Anna, for the presentation.

I um I had read in advance.

I apologize for joining us a little late today, but I read your presentation and caught the second half.

I'd already had my questions in mind.

Um I would maybe not for today, unless you want to share today, but I'd be happy to know more kind of offline when you're you know, maybe ready to help me and anyone else interested in know about how the community budget agreement is part of our process, particularly going into the October to December.

I know it's analysis and deliberation, but then in advance of those four January hearings, um I think that'd be good for us to know, and for members of the public to know too, you know, to the extent that that document and those kind of principles are part of our conversation.

And um, you know, maybe for offline, I'd be curious to know what what kind of employment targets we have for San Francisco generally, but particularly our EJ communities where we've had such success in partnering with local contractors and community partners and building out our work in the Southeast, how that translates into any of the hiring we do, you know, for um in terms of outcomes and projections with respect to local employment, maybe even hyperlocal employment, you know, to what extent we dig in deep into 94124, 134, 117, Hunter's point, Viz Valley, Petrero, in terms of bringing folks into our ranks, would be curious to know, you know, maybe on a parallel path to budget.

But apart from that, I do have a real particular interest as the ratepayer advocate among us here on the commission.

That uh when we first, or at least in my time with commissioners John Darr and Leverone earlier in the year, had the chance to see what goes into rates and when we're presented the opportunity to vote essentially up or down at that point.

It's been essentially baked by the time we get the chance to vote up or down on rates.

When I saw the graph, and I know it was recently presented to the rate fairness board as well.

I'm sure and certain that they had feedback about it that we're close to double-digit increases on an annual basis.

Not yet, but in a few short years from now, and we're fast underway to eliminate that headroom that we have with respect to our affordability targets.

We're gonna start to crisscross, and I want to say seven, six, seven years from now.

Um, I want to be uh involved as early in the process as as possible as the ratepayer advocate.

I I don't want to be, you know, coming to the January meetings and then just learning at that point what the analysis and deliberation was during the months of October and December, according to the slide, because by that time I've I figure a lot of those decisions has been made, and we can't go back.

What are the trade-offs?

What are the opportunities we have with respect to the capital?

Obviously, we have the needs of safety, reliability, and our core functions of what has to get built.

We have our needs with respect to the wastewater enterprise, certainly, and I know from my memory of that graph, I don't think it was in here, but that table wastewater is a big driver in terms of what we have to do there around nutrients, around you know the work that we're doing to continue to address the needs of our combined system.

I just feel like it's important for the ratepayers themselves and San Franciscans and everyday residents to know what those trade-offs are and that we entrust them to be a part of that conversation and say I accept it, I understand that there's no way to avoid this type of rate increase at a certain point because it's just simply unavoidable with the stuff that you have to do.

I'd really like us to be like a collective family staff, all your great work, the general manager, all the way down throughout the team, the commission, and ultimately the public to know that we're in this together with these tough decisions we have to make.

If we are going to do anything about that graph in which we're going to be unaffordable under our definition in about seven years without some different changes, so it's not really a question, it's just flagging that I really want to be a part of those conversations as early as logistically, feasibly, appropriately possible, and not just be there in January learning what what's all happening uh or what's been decided or deliberated, analyzed during October to December at that point.

Great.

Yeah, thank you for your comments, and I'll just add that we developed our budget instructions with exactly that chart in mind.

It's what are we going to do to stay under these limits, and what are the trade-offs inherent in doing that work?

So we'll we'll work together to figure out the appropriate time to bring you some more information sooner.

Thanks.

Thank you, Vice President Arse.

I'd like to just add emphasis to what Vice President Arseh has said, but maybe also to broaden it.

I see in your slide October to December analysis and deliberation.

I was hoping that that would include commission hearings.

I know we have a lot of extra budget hearings in January and February.

That's still a very short time frame for the commission to really get familiar with the information and to make decisions about it.

And so I would really appreciate maybe some more uh preliminary um information before January, so that it's not this very short time frame that that there's a lot to take in.

I remember the books from two years ago, and they were fabulous books and really informative, but it it's a lot of work to really uh understand it and to and to make the hard decisions that have to be made.

And I know you're doing it that at the staff level, and our budget and finance team is among the finest, if not the finest, but I I feel like we need to have public conversations about it earlier.

Um great.

If you all want to talk about budgets, I am happy to.

So we'll figure out the right time to bring us more information.

Commissioner Jamdar.

I just wanted a point of clarification.

Is there a community budget agreement or is that the community benefits agreement?

Uh I'm just I've not heard of a community budget.

Is does that exist?

If I can say that was my reiteration of something that I heard from one of our community leaders, Ms.

Pinkston, who's also a member of the citizens advisory group.

I was without putting our city attorney in uh a level of concern about me veering around uh a publicly noticed conversation.

I was trying to be respectful of community feedback and uplifting some comments that we got during the earlier public comment phase.

Got it.

No, I'm I'm just trying to uh understand.

I I agree that we need uh focus on community investments and what that budget looks like for the upcoming year.

So I want I'm very interested in just sort of helping shape that uh so supportive, but I didn't know it existed.

So sorry, just clarifying.

Maybe we'll find out together.

Vice President Arcee, did you have something else to add?

I I did, President Stacey.

I went back on the stack only because I'm a little bit nervous about showing up in January and seeing you mentioned the books, right?

The books and my head is gonna be laser focused on rates.

And if there's any risk that the conversation looks like, hey commissioners, members of the public, this is the rates.

That's it.

It's unavoidable.

There's nothing that can be done.

I just really asked that we not let that happen.

You know, I just I feel like I don't want to presume that that's how it goes, but being a first timer for the process, I just really respectfully request an opportunity to entrust us as commissioners and and ideally folks within the public to say we're in this challenge together, we're looking at these realities.

Here's the conversations about around the trade-offs.

We're welcoming input or feedback about from a ratepayer perspective or from a public perspective or any of the other factors to kind of weigh in.

You're the experts to take that feedback, and then if that's incorporated into what could happen in January, which says here's what we've decided, or here's what we recommended.

We hear you on your thoughts and and ideas about promoting trade-offs, that there's public support would be a fair trade-off to bring the rates down, you know, four years from now, or or postpone the potential for the type of rate increases that have been projected to a later date while we can continue to solve.

Is it other revenue options to help support those capital investments?

Is it going to the voters to ask them to put skin in the game to help us find other ways to get this work done that has to happen?

I'm just I just have to confess to dreading a little bit the idea of being there in January and says, Well, but we did we already did the analysis and deliberation according to the slide in October and December, and it's it's done.

The trade-offs have already been decided.

I don't want to presume that it's that's how it goes, but being, you know, yeah, that I just I just want to do that.

And I do want to um have our deputy CFO Laura Bush talk about rate adoption and how it works in relation to the budget for a moment, because I think it'll help clarify when and where um you all are able to make choices.

Thanks, Anna.

Laura Bush, deputy CFO.

First of all, let me say I completely agree, and I think that public outreach and engagement is extremely important.

Uh there's the budget adoption, which will occur um will be in front of you in February, and then the rates adoption, which is obviously intrinsically intrinsically intrinsically linked to the budget, will occur in the spring, probably around April or May, around the same time the board is adopting the budget.

As part of our rate adoption process, there is um we go above and beyond in our public outreach and community engagement.

Um we hold town halls, we meet with community groups, we do webinars, uh, we obviously have our rate fairness board, and I would welcome any other advice you have about how we engage the public in that process because it's very important.

Um, but yes, I agree with you.

I think it'll be really important to explain these difficult choices that we're making in the budget to deprioritize things to keep those rates affordable and make sure the public understands that.

Um at the end of the day, we still have to run uh compliant reliable utility.

So there's gonna be things we do have to spend money on, as you know.

Um, but we're doing our best to make the tough choices and put together a prudent budget.

Thank you, Deputy CFO Bush.

Just for those of us who are planning out our dance cards in the next months or so down the road, when generally ballpark monthwise do those community engagement sessions start so we're ready.

Uh probably around February, March, April.

Early 2026.

And we don't do we run into a risk that it that the community outreach starts after we've approved the budget, and then if there's anything that we get feedback on that would have been good to know before we finalize the budget could be incorporated.

Is there a risk we get that feedback after the budget's approved and there's nothing we could do about it?

Yeah.

However, we welcome any feedback you have or assistance you could provide in helping us figure out those trade-offs before the budget gets finalized.

My respectful recommendation would be to start earlier.

Okay.

Earlier than February.

We already have our EA team engaged in the public outreach campaign.

Um so I'll definitely flag that for them.

It's good advice.

Thank you.

Uh thank you, Commissioner.

Oh, Commissioner Leverone.

A follow-up question on that.

So if I understand budget and then rates.

Do what is there a simple of what we look at in the budget that then determines the rates?

How is where's the because I'm I'm seeing a little bit of a disconnect in my say um mind, as far as you know, we we do a budget and then there's so many months later outcome the rates, which I think don't worry.

Okay, um at the same time the budget is adopted.

We will also be adopting the 10 year financial plan as we had charter mandated to do annually.

The 10-year financial plan takes in all of the information from the budget and the 10-year capital improvement plan and gives 10-year rate projections for each of uh rate payers based on that budget.

So you will have rates information, long-term forecasts, which is by the way, we're quite unique in providing those long-term forecasts to the public when we do our budget adoption.

You will have that information when we're making budget decisions, thank you.

Let's take public comment.

Remote callers.

Please raise your hand if you wish to provide comment on this item.

Are there any members of the public present who wish to comment on this item?

If so, please approach the podium.

Hello, I'm back.

Mike Pinkston.

Okay, so um this here's the deal.

I'm very familiar with this project, and this is sounds like it's gonna be a situation where we're gonna be putting some stuff into Bayview that's kind of uh new to everybody.

This has not been um something done somewhere else before.

Um, and with that being said, uh I heard um our wonderful lady speak here in regards to they're gonna need people who are more familiar with this project in order to bring on the community.

Well, if you guys are just learning, then you can teach us.

We all can learn together, however, it's in our community, and we should be put in the budget, so that's my take on it.

Thank you.

Thank you.

Moderator, are there any members of the uh public who have their hand raised?

Ms.

Lanier, there are two callers who wish to be recognized.

Thank you.

Uh I think we have some more people here that would like to testify.

Yes, I came in late, so I didn't hear what project this is.

We're talking about the budget process for it's a two-year budget process and a ten-year capital plan.

It's not a particular project, it's it it it includes everything that the PC manages.

So I heard Bayview from the person before me, so that's why I just wanted to make sure it's for the entire city, citywide.

It's for the entire PUC.

PC, the budget.

Oh, capital planning.

Okay.

So I know Southeast Sector, uh, I'm Elisha Rochelle with the Baby Hunter's point coordinating council, and um I'm particularly interested in the Bayview area, and I know the Southeast um has their own particular um things that are slated for Bayview.

We definitely want to be a part of those conversations.

Um we're not necessarily seeing how all those benefits are coming into the community.

We have suffered so much and still continuing to suffer.

I was just watching today something happening in the community where they're scooping up dirt and putting it in a big container and the dirt is going everywhere.

It's like the concern for the community is really not evident.

So I really want to be a part of the as many conversations as possible regarding what comes into our community and how things are being developed in our community.

And we definitely want to be put into the budget as far as oversight in particular.

Baby Hunter's Point Coordinating Council.

Thank you.

Thank you.

Moderator, please go ahead.

Thank you.

Caller, your line has been unmuted.

You have two minutes.

Thank you.

This is Peter Dreckmeyer, policy director for the Tuamy River Trust.

Just want to remind everyone that the budget does not include alternative water supplies.

There's a little bit of money for planning, but according to uh the urban water management plan and staff, the SFPC might need to develop 92 million gallons per day up to 122 million gallons per day of very expensive alternative water supplies.

92 million gallons per day would cost 17 billion dollars.

Now if the SFC were to have a drought plan similar to every other major water agency, East Bay Mud, Valley Water, and you're used to use realistic uh demand projections, somewhat similar to what the finance bureau projects, we would have no problem managing the Bay Delta plan, and we wouldn't actually have to even do any rationing with rationing.

We could add a year to the plan.

We could have a much more severe drought than any on record.

And we've been bringing these issues up for years and years.

We have these workshops that I think totally proved our point, and the commission didn't do anything about it.

So kicking the can down the road ends up in situations where we're uh getting very, very close to the affordability threshold.

Now, when you get your budget, you're gonna have finance bureau sales projections.

They will be considerably lower than what's in the urban water management plan.

And there was a great document from July 12, 2022 explaining those projections.

I encourage you to take a look at it.

Thank you very much.

Thank you, caller, for your comments.

Caller, your lun has been unmuted.

You have two minutes.

Hi, this is Dave Warner.

I have to say, I um chills went down my spine when I heard both uh Vice President Arceus and President Stacy's questions about the budget process and suggesting that uh getting an early look at where the budget is going.

But then my understanding, and maybe I'm wrong, uh I felt that um uh deputy CFO Bush had sort of deflected the issue and said, hey, you're not gonna get the information till January and there'll be adequate time to do the community outreach.

But I think that's not the issue.

I think the issue is it's also uh along the lines Commissioner Leveroni asked, you really want to know this information before the numbers, the budget numbers have been finalized so that you have a little more flexibility in being able to uh set direction.

And so I have not heard any commitment from staff that that would happen.

And then I would just add one more piece to this is that not only are you looking for you know, questions like are we planning to exceed affordability targets in the next 10 years like we did in last year's plan?

Um another question would be as it was also asked, can you do a sensitivity analysis to say if demand, particularly for Bosca, doesn't come in as high as expected, what will affordability look like then?

Because San Francisco is affected if San Francisco rates are affected if BOSSA sells less water than it expects.

And then lastly, and maybe this is a uh sort of a bonus that's not as critical, but last year they started to reduce the amount of debt that was used to fund capital projects.

So it'd be nice to know.

What's this year's capital spending or the 10-year plan for capital spending look like this year compared to before, and is there any chance we can further reduce the amount of debt that's needed to help reduce our long-term rate?

Uh thanks so much for all your work.

Thank you.

Bye.

Ms.

Nair, there are no more callers in the queue.

Thank you.

Vice President Arce.

Thanks, President Stacey.

I just uh thanks staff and thank for members of the public that weighed in on this issue.

I just wanted to clarify two things.

Uh one, an apology to any Petrero residents here in the crowd, because at some point I was listening up zip codes, and I think I might have said 94117 instead of 94107.

Petrero, more specifically, dog patch resident general manager Dennis Herrera would have leaned over and whacked me when I got the zip code wrong.

And then second is um when I was mentioned I didn't mean to omit Commissioner Thurlow when talking about for Commissioner Leveroni and I and Commissioner Jamdar, that was we had the chance to see that kind of mid-year budget process in the beginning of the year.

I didn't mean to omit your referring to you, Commissioner Thurlow.

I think as you, like all of us, with the exception of President Stacy, this will be our first two-year budget in next year.

So that's why we want to really do everything we can now to get it right.

Those of us joining President Stacy now in this process.

We really just want to get it right.

And as a rate pair advocate, I hate to, you know, say something maybe a little too thought provoking, but the way I look at this, it's kind of all about rates.

Commissioners, if there are no more questions, we'll call the next item.

Thank you for the presentation.

Mr.

Flynn.

Next, we have um Katie Miller, who's going to give the HECHECI Capital Improvement Program quarterly updates for the fourth quarter fiscal year 24-25.

Thank you, may I have the slides, please?

Good afternoon, President Stacey and Commissioners.

I'm Katie Miller, Director of Water Capital Programs.

Today I will share a summary of the HECH Hetchy Capital Improvement Program through June 30th, 2025, the end of the fourth quarter of last fiscal year.

These pie charts show the status of the projects by dollar value with 14 projects in pre-construction, seven projects in construction or multiple phases, including construction, and one project in closeout.

459 million dollars has been spent of the 1.9 billion dollar budget with 55 million dollars spent during the third and fourth quarters for a total expenditures during the last fiscal year of 120 million dollars.

This table shows a summary of project expenditures and cost forecasts grouped by the appropriate project's funding sources water, power, or joint, meaning both water and power.

The two columns on the right side of the table show total cost variances for the projects or changes from the approved budget baselines, including those that occurred during the fourth quarter on the far right.

For new cost variances, the moccasin powerhouse and generator step up rehabilitation project forecasted an additional 10 million dollars cost increase for a total cost increase of 26 million dollars due to additional rehabilitation work for the generators and higher anticipated costs for the third subproject, the moccasin powerhouse system upgrade.

The transmission lines clearance mitigation project forecasted a cost increase of 23 million dollars due to planning level scope refinement.

In the joint category, the early intake dam project forecasted a cost reduction of about $99 million dollars since the project is currently on hold while long-term schedule and scope decisions are being made.

This slide shows major project and milestones achieved during the third and fourth quarters.

Two projects were initiated.

The Moccasin Dam project achieved 35% design.

One contract started construction, two contracts, uh two construction contracts were advertised, and one project achieved final completion.

There are currently 11 construction contracts underway.

These milestones, total program expenditures, and number of contracts in construction indicate that the Hetchhee program is achieving significant progress at this time.

Now we'll provide a few project highlights.

For the Mountain Tunnel Improvements Project during the last winter shutdown, 100% of the tunnel lining repair and about 50% of the contact grouting inside the tunnel were completed.

Two of the four 72-inch double disc knife gate valves were installed in the priest flow control facility.

The remaining two valves are being manufactured and will be installed during this winter shutdown.

The foundation for the priest flow control facility was started, and at the priest addit forms and reinforcement were installed for concrete lining application as shown in this photo.

At it large cut walls were completed, and the moccasin water filtration plant contract started construction of the building foundation and backwash tanks.

The contractor worked diligently with us on alternatives to align the shaft, including an off-site uh rehabilitation work for the thrust block and shaft components.

This work was successfully performed, and the rehabilitated parts were returned to the site for real reinstallation in August.

However, due to this work, substantial completion is now delayed to November of this year.

Development of the final contract, system upgrade subproject is approaching 95% design.

Cost increases were forecasted for scope refinement, longer construction duration, and higher construction and management costs.

This photo shows the foundation slab completed and walls being constructed for the sequencing batch reactor.

Recently it was decided to combine the scopes for the Cherry Valley Dam Spillway Short Term Improvements Project and the Eleanor Dam Bridge Interim Repair subproject into one construction contract.

Since each of these sub-projects has a value of around $8 to $10 million, and the work is in remote locations, but the sites are somewhat near each other in proximity.

It makes sense to combine the work under one construction contract.

It is hoped that this will result in lower cost construction bids due to the lower mobilization costs and higher combined value for the contractor.

This contract will be advertised in the next two months, so we'll find out if there's savings soon.

And that's it for my update.

I'm happy to take any questions.

Thank you so much.

Commissioners, questions or comments.

Commissioner Leverone.

A question just in general.

So when we improve a new pump, a new valve, let's say it's over, we'll just pick a figure 10 million dollars or something.

Do we then start a ammonization schedule on that pump or that valve to say okay, in 20 years or 30 years we're gonna have to replace it so we calculate what that might be each year and have that in some type of I want to call it reserve, but not necessarily, is that the correct word.

Yes, that is correct.

I don't know the details of down at the component level, uh, but Laura Bush can uh try to take a shot at that.

Thank you.

Hi again.

Um, so yes, when we build a capital asset, we capitalize it on our balance sheet and we amortize that over its useful life.

Um I don't know the specific details down to the asset or project level, but in terms of having a reserve to eventually replace the asset, no, that is not our practice.

We do do um intensive capital planning though, and we're constantly monitoring um the condition of our assets and when we know will they'll need to be replaced.

We have um hundreds of million dollars annually budgeted for repair and replacement, which is ensuring assets may are maintained in good condition, repaired and replaced as needed.

That's a really important part of uh ongoing capital improvement work.

And then for assets that we see coming to the end of their lives, the Edo can't be repaired, then those uh prioritized as appropriate in our capital planning.

Thank you.

I had a couple of questions.

I I noticed um that one of the projects, the transmission lines clearance mitigation has a progressive design build contract.

Could you describe that?

How how a progressive contract or a progressive design build contract works?

Um yes, I actually I'm gonna let uh Steve Robinson take this since he's got more experience than me.

Thank you.

Thank you.

Yeah, thanks, uh President Stacey.

Um we have a number of contracts now that are at the beginning phases of a progressive design build, and we're actually intending to come to the commission at some point in the coming months and help explain the process of how we do that and why we do it, and what the commission's uh approval would be at various stages of that project's life cycle.

Um the majority, about two-thirds of our contracts at SOPC are a traditional design bid build process, and we have a mixture of as needed some those job order contracts, the JOCs that you see a lot.

We've got an increasing volume of more collaborative delivery or what industry has called alternative delivery.

Some of those are design builds, some of those are CNGCs, construction contract manager, general contractor.

Um, but the progressive design build is a design build entry that PUC has one contract with, and then it's authorized on a progressive nature over time through its design process, through construction, and through closeout.

So we're intending to come back actually to the commission and help explain and walk that process through.

Okay.

Thank you.

Can I just I'm not sure I understand how is the progressive process different?

And do we do we get sort of a maximum bid amount, or is it really uh a back and forth between the PUC and the contractor?

So my understanding in a progressive design build arrangement, um the progressive nature of the design build means we're still having a one contract as the owner with one private entity that includes the design and the build element.

The progressive nature means that we're contracting them quite early in the process.

Sometimes even in a planning phase when we're looking at alternatives to the solution.

Sometimes we might decide what that alternative is and then engage them to do the design work on it.

But the more uh we share together in a collaborative nature, the better allocation of risk and therefore the better product, hopefully, and the correct price and schedule and confidence and lower risk in that process.

Um so the progressive nature in some of these contracts might mean that we award the overall contract and we only authorize a certain amount to get started in planning and design, and then as we know more with scope freeze and scope definition, we then begin to lock in what maybe you're referring to as what's known as a guaranteed maximum price in the design build industry.

Sometimes there's benefits in doing that early, sometimes there's benefits to leave that until a later step when all of the packages are bid out and we have a lot more confidence in what the total cost of the project is.

So there isn't a clean clear answer about at which point we imply a guaranteed maximum price.

We have that cost confidence by its nature that it's collaborative and it evolves over time.

It progresses.

Does that help answer the question?

Thank you.

And then I had um uh I noticed in your report that there are two, at least two projects, the Pennstock rehabilitation project and the Trans and um the early intake Dam project, uh some alternatives reports were mentioned.

And I I would be interested in knowing what those alternatives are, and this is really a bigger comment than just those projects.

When the commission is faced with a decision to approve or disapprove a project, it would help me a lot to know more about what were the alternatives.

What did we are we spending $80 million more because we get something more?

Are we spending $50 million less because we can do without sometimes just an up or down yes or no action is hard to evaluate without knowing more about what the alternatives are or more about what we've given up or what we're getting for the particular price.

And maybe this is uh again similar to what we were saying about the budget.

It would be helpful to know a little bit more about that decision making process that uh usually happens, I think, at the staff level, but it would help I think the commission to really evaluate the decision to know a little bit more about the alternatives.

And I and I know these are draft reports now, but it would be really interesting, especially for these really big projects, and I know the pet stocks rehabilitation is going to be one of them, to know what those alternatives are and and what we're getting or what we've given up, how you've calibrated the project that you're you're asking us to approve or disapprove.

Um, and I just would like to see more of that and and maybe earlier.

Yeah, absolutely.

I think the transparency on these larger projects that have some risk and options for us to evaluate, it's helpful to be transparent and share that.

Um we can certainly work with you to figure out the right way to do that and come back.

Certainly in the quarterly reports that Katie's presenting here has has notes.

We're we're relevant in some of the projects to explain some of the alternatives, but it's at a very high level.

I appreciate it for something like the Pennstock project you're mentioning, President Stacey.

It's helpful to understand some of the reasons why we've slowed it down and taken our time to think carefully.

There are a number of alternatives for us to weigh up and decide what's the right solution for the water enterprise.

Yeah, and Ms.

Miller has talked to the commission about that, which is why it comes to mind as a potentially very um a large project and a very expensive project that I you know, I'd like to hear more about not only that project but other projects of that magnitude in wastewater energy and water capital capital projects.

Thank you.

Uh Commissioner Leveroni.

Maybe in a I don't want to make it too simplified, but in the progressive, is there not more knowledge of going down?

So when we do our budget process, if there's more contracts that we're going to be looking at from a progressive standpoint, will that help uh coming on this past year?

My first year, I I saw a lot of increases, and we've had that conversation.

And will that help alleviate that large, you know, say increases that we will be kind of working through it as they go on in the progressive motion?

Um, so yeah, one of the other differences that I I thought of with the design build versus the progressive design build is a design build, you take the design to about 35% design, you feel pretty certain about what the design is, and then you get a construction price.

There's still a there's still a process to get that price and you're locked into the contract.

With progressive design build, you don't yet know what the construction value is.

You're working together on what the design is, and there's an off-road.

If the construction cost comes in too high, you don't have to continue with construction.

So there's the opportunity to possibly decrease costs by having that collaborative experience with the contractor who really knows how much things cost to build and having a lot more information during the design process so that the scope can be trimmed back, or we can find more favorable ways of doing the work that may reduce the cost.

So the opportunity is there, yes.

Yeah, thank you very much.

It's kind of I think kind of what I've used sometime is value engineering as you're going along to see what you can do.

So thank you very much, and I I look forward to hearing the you know the explanations going forward.

Thank you.

Thank you.

Vice President.

Oh, guest.

Are you guest one, Mr.

Flynn?

Apologies.

Thank you.

Um I just wanted to weigh in here, and it does seem like we are hearing questions about the different delivery methods and how they're um chosen.

I do think it'd be worth us really coming and and presenting that.

I would say we have to be careful when we say that it is one method is not going to result in the contract getting bigger.

That might be so on our overall plan, but some contracting methods, CMGC, progressive design build are built in a manner where the contract starts small and the plan is to build components.

So it might feel like things are coming to you to add to it, and that's part of the plan of the contract as opposed to a design bid, which you're supposed to get the whole price up front.

So we we have to be, I think, a little careful on how we're describing what what's good what's gonna happen, and and and we should we should take the time to do that.

Thank you.

Vice President Arce.

Yeah, well, guest one, uh, Brother Flynn.

You you must have read my mind because I w I was gonna share that I think maybe because of spending time with AGM Robinson and Katie and um Alison Castama on a when I got my tour of the system and up at Mountain Tunnel, and then the tour that um Commissioner Leveronian and I had of headworks, I I got the chance to kind of learn that directly from AGM Robinson and really have the understanding, and particularly as the ratepayer advocate for someone who really thinks about rates.

This is a way to advance project delivery, getting stuff done, but also a way to help control costs.

And one thing that's really important is that when we get the phases of approval, those aren't change orders.

Those aren't unexpected costs, those aren't anything other than the results of project delivery in a way that's step by step and incremental, and it's designed to have these phased payments and costs that we approve.

And I feel confident in staff that in doing that, that's creating savings to us.

And so I just I think it's a great idea, Ron, to kind of be ready for that as we start to see some of that type of project delivery coming forward that we're we don't say, wow, that's that's an amount I wasn't accustomed to see, but that was actually the whole design to begin with.

They're they're kind of like phases, I guess would be the word.

They're phases of the project, they're not in any way reflective of anything less than uh what we were expecting to see in this type of project delivery.

And I believe in it personally, I think it's a good good way to be going.

Thank you.

Thank you, Ms.

Miller, for all the information and Mr.

Robinson, Ms.

Bush.

Can we take public comment?

Remote callers.

Please raise your hand if you wish to provide comment on item 5B.

Are there any members of the public present who wish to comment on this item?

Seeing none moderator, do we have any uh members with their hand raised?

Ms.

Linair, there are no callers with their hands raised.

Thank you.

Thank you.

Next item.

Um the next item is the wastewater enterprise quarterly report for quarter for fiscal year 2425, and Bessie Tam is going to give that presentation.

Good afternoon, Commissioners.

Bessie Tam, uh program director for the Wastewater Capital Program.

Slides, please.

Thank you.

So I am like Miss Miller, I'm here to provide a Q4 um update uh for fiscal year 2425.

Here's a beautiful photo of our Treasure Island Water Resource Recovery Facility.

Uh before we start, just want to highlight that this project earned a envision platinum award, which is the highest recognition from the Institute Institution for Sustainable Infrastructure, or ISI.

And quoting from ISI, um earning an envisioned platinum award for the Treasure Island Water Resource Recovery Facility affirms the projects designed to efficiently manage resources, minimize environmental impacts, and support the well-being of the island communities, end quote.

So I just want to share that highlight with you.

Here are some construction updates, starting from the left.

This is the upgraded dual end switch gear for the planned electrical distribution in the South East treatment plant inside our new two-story primary switch gear building.

So this project aims to enhance the existing primary switch gear to accommodate currents and projected electrical loads for our South East wastewater treatment plant.

To ensure reliability, a new 12 megawatt feed has been provided from our very own SFPUC power enterprise, which came from the Petrero Switch Guard switchyard via the new SFUC division substation.

So very exciting project for us to ensure this power to continue the operations at South East Treatment Plant.

In the middle is the Gary Bolovart Sewer and Water Improvements Project.

In a photo, the contractors are installing a 42-inch diameter reinforced concrete pipe along Gary Boulevard from 6th to 7th Avenue.

This is a joint project between SFPUC water and wastewater program as well as SFMTA.

So, really good partnership with our own sister agency as well as a partner with the city.

On the far right is the Sunnydale Palm Station Safety Improvements Project.

Here the contractors are taking measurements inside the manifold room.

This is a wet weather pump station located near the old candlestick park area, and it was constructed in 1991 and has been in continuous operation since then for over 30 years.

This project is aiming to address the health safety and security issues at the Palm Station.

There's gonna be more improvements for this, you know, really old facility that's near the end of its useful life.

Sorry, the bar charts here, uh actually the pie chart here rather shows the SSIP Phase 1 projects by phases.

There are no changes this quarter between last quarter and this quarter in terms of projects.

Overall, we're maintaining the total number of projects and also the overall budget for the 7D SSIP phase one projects, 4.47 billion dollars at 7D projects.

The cost variance in the second to the right hand column is similar to the last quarter.

A majority of the overrun is due to the contract delivery change for the biogas project, forecast change on the lower Alamany stormwater improvement project.

This quarter between the cost variance between the last quarter and this quarter, which is over the reporting period of the positive variance of 1.5 million dollars reflects cost savings from closing out some of the existing projects in the last quarter.

In the facility and infrastructure subprogram, in terms of the cost summary, the cost variance both in the in shown here reflects the consolidation of the nutrient reduction efforts at South East treatment plant.

Previously we had budgeted for an interim nutrient reduction project, but since we had initiated the South East Plant nutrient reduction project, the larger project, we have combined the effort.

So this is showing the reduction.

Sorry, we have a screen.

Pause while we bring up the slides again.

Thank you.

So this is the feel good slide, similar to on the water side.

It shows the progress that the project teams have made in the last quarter.

So thanks to the hard work of many project teams and staff members, 20 projects or contracts have met various milestones in this last quarter, as shown here.

The next two slides show some of our major treatment projects, our South East Treatment Plant.

The first one is our Biosolus Digester Facilities project.

In addition to the progress that we show here, I want to highlight that for the second year in a role, the Biosolus Digester Facilities Project has earned the national recognition for outstanding safety performance, taking home the occupational excellence achievement award from the National Safety Council once again.

In addition, in early September, Commissioner Thur Thurlow and several members of the Board of Supervisors also tour Salvi's treatment plan, including this project and the project on the next slide.

Here we have the new Hetworks Facility project.

So thanks to the commissioner's approval, we are currently demolishing the former all-weather Hetworks building, which helps free up a lot of precious room in a very congested Salvia's treatment plant for uh staff and other uh work going on there.

Um in addition, I just want to share that the uh new headworks facility project.

We are going to be pro uh we are proceeding towards final completion, and there is a ribbon cutting ceremony at Sawiz Treatment Plan scheduled on September 30th.

So making a lot of good progress and very excited um with this announcement.

And with that, I'm happy to take any questions that the commissioners have.

Thank you for the report, and congratulations on the award on Treasure Island.

Uh Commissioners' comments or questions.

No.

Let's take public comment.

Remote callers, please raise your hand if you would like to comment on this item.

Are there any members of the public present who would like to comment?

I thought I recognized your face.

Um these new things here coming into I'm a baby resident.

And so I'm not sure if this is the first time I'm hearing.

I just want to be clear.

I'm asking, is this the first time that these four things, inductors, reducers, I'm not sure what they're called, um, have been installed anywhere?

That's my question.

And um also, what type of training is in place for let's say an emergency happens, disaster.

We just had an earthquake.

You know, I've been, I was in the 1989 earthquake, and you know, resources are going to where they're going.

What kind of resources would be coming into our community to handle spillage and things like that that could possibly happen?

So, I mean, yes, getting great awards for safety is great, but in case of emergency, what's the plan?

So I'm very concerned about that.

Thank you.

Thank you.

Public comment.

Good afternoon, commissioners.

Again, uh, I'm Demetrius Williams, um uh baby resident.

I'm also the president of the San Francisco Hyperlocal Building Trades Contractors Collective.

I'm also the owner of CIW and Science Plumbing.

I wear a lot of hats.

Um, we are alarmed and uh concerned about the sewer treatment plants, especially the uh new sewer treatment plant.

We just had our earthquake.

Thank God it wasn't a national disaster because uh, like last uh two weeks ago, I asked about a plan in progress, and so we can understand how do we actually have the training for our community for if it's a national disaster where raw sewage is spilling into our streets in Bayview.

What is the plan?

And how do we get involved?

Because you can train some of the uh, especially uh CIW and Science Plumbing, how to uh address these situations in case raw sewage happened to run into our streets in the Bayview because we live there.

My kids live there.

My dad uh lived there.

All right, we want to make sure that our community is safe.

So we want to be included in on a plan and process of emergency disaster that happened in our community.

We have a new sewer treatment plant, and we're excited about it.

We're glad that it's uh is about to be finished, that project is about to be completed, but we definitely want to be included uh in on a process of understanding how it works also in case of a national disasters.

Thank you.

Thank you.

Moderator, are there any members of the public who have their hand raised?

Miss Lanier, there are no callers in the queue.

Thank you.

Thank you.

All right, so now it is um time for is it not working?

Oh, um, for the SFPUC employee retirement recognition, where we recognize people with 25 years plus of service.

Um behalf of Dennis Herrera, I really want to take a few minutes and recognize the incredible service and dedication of one of our recent retirees with over 25 years of service.

Today we congratulate an individual who has demonstrated the highest form of commitment and pride in public service.

Today we'd like to recognize Winfred Pete Flewellan, who was in the water enterprise for his full 39 years of service.

He passed 25 a long time ago.

Um the commission has prepared an honorary resolution for Pete, which I'm going to read as I've let him know.

There's some we still have to do some signings, so we're gonna have to take it apart and mail it to you, but I would like to have the public hear um your resolution.

Is that okay?

Great.

Whereas in March 1986, at just 19 years old, Winfred Pete Flewellum began his career with the San Francisco Public Utilities Commission, San Francisco Water Division as a night shift communication dispatcher.

While he pursued a college education in broadcasting, thanks to his background in broadcasting, Pete naturally took on the role of DJ for all water division events and functions, bringing great music and energy.

And whereas at the recommendation of a construction and maintenance superintendent, Bill Olinger, Pete applied to and was accepted into local 38's apprenticeship program, where he primarily worked in the water division's main gang section.

He successfully completed the program and transitioned into a utility plumber role in August of 1991.

On October 17th, 1989, we just heard about the Loma Pareta earthquake, and Pete served as a first responder in the aftermath of that earthquake, working alongside his crew around the clock 24 hours a day for the first two weeks.

As her shift gradually returned to a standard eight-hour day, they were able to successfully repair over 70 main breaks and leaks.

Whereas Pete remained in the bank the main gang for 15 years, during which he also volunteered for the PUC's water rationing program by engaging directly with residents and calculating their allotted water usage based on the number of people living in the household.

He later spent close to two years in the gate room focusing on on indirectional plumbing work and also gained experience in leak detection and pipe location.

Unidirectional.

There it is.

There it is.

These diverse roles helped prepare him for his eventual promotion to foreman.

And whereas in March 2015, Pete was promoted to utility plumber supervisor one.

He initially led the night crew in the mean gang as in the main gang as foreman before transitioning to the service department, where he spent the remainder of his career.

Pete took great pride in the commodity commodity camaraderie of the team and found fulfillment in mentoring new employees, sharing his knowledge and experience to help them grow in their roles.

And whereas in June 2025, Pete retired from the San Francisco Water Division after thirty-nine years of serve satisfactory service with the San Francisco Public Utilities Commission.

While riding his tricycle through the halls of City Hall, where Pete's mother worked as a telephone operator.

She would let Pete help close out the day by pulling the plugs on the telephone system, an experience he greatly enjoyed as a child.

Resolved that this commission hereby expresses its sincere appreciation and gratitude for Pete Flewellan's hard work, dedication, and positive attitude.

So I want to invite um if someone from the water department want to um okay here we go.

Good afternoon.

Um I'm John McCurio.

I was Pete's uh Winford, we call him Pete, um, his supervisor for many years.

And um I just want to tell Pete congratulations.

Um I've worked with Pete for the whole thirty-nine years he's been here.

I've been in here a little longer than that.

Um it was great working along with Pete.

We always had a lot of fun and um we got the job done.

We got main breaks going on today, so you guys are here.

I'm going back out in the field.

You guys have a great day.

All right, um, and uh I would just like to add so much gratitude for your many years of service.

It is employees like you that make this system work, and it is uh a huge benefit to the city that you've been uh working for the system for so long.

So thank you so much.

Enjoy your well earned retirement.

Do any other commissioners um wanna um say anything before we invite um Pete up for a photo with um the commissioners?

Thank you.

All right, well, please join me in congratulating Pete with a round of applause as he comes up.

Where do you want?

Is he gonna come up here or we're gonna go down there?

I don't know what he normally does.

Thank you so much.

Oh, we got it at all.

All right, now that's the most helpful.

Okay.

No.

No.

We have to do um public comment.

We uh Ms.

Lanier, we should take public comment on this commendation.

There's anyone else who wishes to speak in the room.

Remote callers, please raise your hand if you wish to provide comment on item 5D.

Are there any members of the public present who wish to comment on this item?

Seeing none, moderator.

Are there any callers who have their hand raised?

Miss Lanier, there are no callers in the queue.

Thank you.

Thank you.

And please call the next item.

Thank you.

The next item, item six, the consent calendar.

Commissioners, are there comments or questions on any of the consent calendar items?

No.

I had one quick question on the 6E.

The um the uh the clean power SF report.

I just wanted to make sure that I was matching up the um the words used.

In the report, we have something that's referred to as eligible hydroelectric, and then it's also referred to as greenhouse gas-free hydroelectric.

Is that the same thing that the fact that it's greenhouse gas free?

That's what makes it eligible.

Um, I believe the size of the hydroelectric makes it eligible for renewable portfolio standard.

It's gotta be um below a certain capacity.

I don't have that offhand.

Um, but large hydro, um, is not eligible for um renewable portfolio standard, but it is greenhouse gas-free.

Okay, yeah.

So it's it's both size and greenhouse gas free.

Yes, that's what makes it eligible.

Great.

Thank you.

I just wanted to make sure I was reading the report correctly.

All right, let's take public comment on the consent calendar.

Remote callers, please raise your hand if you wish to provide comment on this item.

Are there any members of the public present who wish to comment?

Seeing none, moderator, are there any callers who have their hand raised?

There are no callers in the queue.

Thank you.

Commissioners, could I have a motion and a second to approve the consent calendar?

So moved.

Second, thank you.

President Stacey.

Aye.

Vice President Arceus Commissioner Jamdar.

Aye.

Commissioner Leverone.

Aye.

Commissioner Thurlow.

Aye.

The item passes.

Thank you.

Item seven.

Will not be considered by the commission.

Item seven is the ward contract DB 139 transmission line clearance mitigation moderate and low risk project to Wilson Utility Construction Company and authorized proceeding only with design and preconstruction services.

So that we we are not hearing item seven today.

That is we'll hear it at a future hearing.

Correct.

Okay, thank you.

Item eight, accept work performed by pipe and plant solutions incorporated under contract number WW-735.

Approve modification number four final and authorize final payment to the contractor.

Good afternoon, commissioners.

My name is John Wong.

I'm a project manager with the infrastructure division.

I'm here to request acceptance of work performed by Pipe and Plant under contract number WW735.

Approved modification number four, decreasing the contract by four hundred fourteen thousand eight hundred and increasing the contract duration by 188 count of days and authorization to issue final payment to the contractor.

Available for any questions.

Commissioners, any questions or comments?

No.

Seeing none, let's take public comment.

Remote callers, please raise your hand if you wish to provide comment on item eight.

Are there any members of the public present who wish to comment on this item?

Seeing none, moderator, are there any calls who have their hand raised?

Ms.

Lanier, there are no callers in the queue.

Thank you.

Thank you.

Commissioners, could I have a motion and a second to approve item eight?

So seconded.

Thank you.

President Stacey?

Aye.

Vice President Arce?

Aye.

Commissioner Jamdar.

Aye.

Commissioner Leveroni?

Aye.

Commissioner Thurlow.

Aye.

Item eight passes.

Thank you.

Item nine, communications.

Commissioners, do you have any comments or questions on the communications that we've received?

No.

I did have a couple of questions on the real estate report.

Um, and they they all kind of fall into the same category, but I noted that there were some uh parcels and ongoing negotiations with other public entities that there has been some delay in moving agreements with Burlingame and Sunnyvale forward.

Uh there's a San Mateo bisected parcel that's mentioned that uh pays a 125 dollar permit fee, and there's a Menlo Park uh parcel of land that I guess the first question on Burlingame and Sunnyvale when negotiations are delayed for a parcel of land.

Do we uh does the PUC get back pay for that negotiation time for that delay?

Um thank you for the question, President Stacey.

No, we do not get back pay.

Um we enter into new license agreements and then they are usually forward going.

Um those particular ones, they have um different issues in them, but we will certainly look at trying to reach those who's conclusions.

It is um working with other public bodies can be like working with San Francisco, and um it goes through.

I think on one of them we were very close, and a new city council came in, so we we will we will put our heads down and figure out how to get those done.

I'm sure it's not a lot of money, it just seems uh that we would like an incentive in place to uh move those agreements forward and it all comes down to the rate payers once again, and so I think it's uh it's just an important aspect to to review with these public entities.

The other two questions I had about the bisected parcel in the Menlo Park, I wondered if we were getting fair market value for those parcels.

I I believe I believe that the bisected parcel values are were set by the commission some time ago, so we should look at that rate schedule.

It is not, it is not a um an annual negotiated, it is a uh a rate schedule, and it does look like we should take a look at that and see whether we should be bringing um that rate schedule to this commission to revise.

Okay, thank you.

We should take public comment on the real estate report.

I think remote callers, please raise your hand if you wish to provide a comment on this item.

Are there any members of the public present who wish to comment?

Seeing none, moderator, are there any callers who have their hand raised?

Ms.

Lanier, there are no callers in the queue.

Thank you.

Thank you.

Next item, item 10.

Items initiated by commissioners.

Commissioners, do you have items to initiate for future discussion?

Vice President Arce.

Thanks, President Stacey.

My item is uh request.

I'll probably continue the conversation offline just to continue this idea of pursuing personally advocating for a revised schedule of public outreach and informational sessions related to rate setting that can occur before February and before we finalize the budget so that a discussion of rates could be more inclusive of feedback and thoughts and sharing about the options that are available and the thinking that we can take the best of all of our minds and collective wisdom on prior to finalizing the budget for fear of finalizing the budget and having that conversation after and illuminating daylighting ideas that gosh we would have loved to have pursued but for the fact that we've already approved the budget and it's too late.

I just want to advocate for getting that started earlier.

Thank you.

I uh I have um a general request that the commission have some more informational presentations from staff.

I think that it would help our understanding of the many projects that come before us.

I'd like to provide the public an opportunity to hear about these topics and for commissioners to think about them ahead of time.

We all get training when we start, and we've certainly had lots of information on the finance side.

We've got a lot of budget information coming down.

Uh the pike, I think we have the alternative water supply report on our calendar in October, but I I have a list of topics that I would really like to uh get scheduled for the commission, and and I'd like input from other commissioners too if there are topics you'd like to hear about.

I'm just going to go down the list so that people have an idea of at least what I'm thinking about, and then I'd also like other commissioners to chime in.

One topic is that I'd like an update on the Bay Delta plan amendments and the healthy rivers and landscapes.

I know there are a lot of different things going on with respect to the Bay Delta plan, but I'd like to have a public hearing on the Bay Delta plan and the healthy rivers and landscapes.

I'd also like to have a hearing on Bosca and uh the history of Bosca, what our obligations are, and also what their obligations are, like to develop local water supplies and also to think about is there a way to right-size what is the um guarantee the individual supply guarantee and what is actually being used by the various Bosca customers.

I know it's complicated, but I think it's an important uh general topic for the commission to know about.

I would also like to have a hearing on water supply and drought planning.

I know just before I joined the commission in September of 2022, there was uh an extensive hearing and workshop on the design drought.

I think it would be an important uh update to talk about water supply issues and drought planning.

Another topic is is water quality uh on the wastewater side.

I know there is permitting coming up with the regional water quality control board.

I'd love to hear about what the wastewater team sees sort of down the pike a little bit, a little maybe prognosis on that process and what we might see.

We've talked a lot about contracting.

I think another important topic to have a public hearing on is uh the types of contracts that the PUC enters, how we make choices in the type of contract, the allocations of responsibilities and risks, and I know they they differ on the types of contracts.

And then I also want to talk a little bit about inclusive procurement, how we include LBEs and the micro businesses.

We've heard a lot in the last couple of hearings about the micro businesses and local businesses, especially around the Southeast plant and the Bayview.

We I I really appreciate the updates and the reports, it's an incredible source of information.

And maybe this is included in the water supply and water quality topics that I just enunciated.

But I'd like a perspective on the wastewater system, the sewer system improvement program, what's going on now, what you see in our future, that may not be just a capital project that comes before us, but it's having gone on a tour at the Southeast Plant, and hopefully I'll go on a tour of the oceanside plant.

It is just fascinating to me how many issues are in front of us from a wastewater perspective, and maybe that gets folded in to the water quality hearing.

I'm not sure.

I also really appreciate the reports that we get on public power, both Hetche Power and Clean Power SF.

I think it would again be interesting for the commission to hear about what can we do better and what does the future hold for our clean power and the PGE process, what's going on at the California Public Utilities Commission.

And a general topic, and I think uh commissioners and staff can probably drill down on what specifically we should talk about, but I think climate change is in is a factor in everything we do, and we hear about it in projects and capital projects, but I think it would be again a very important topic for the commission to hear about generally what are we doing.

We we have a lot of waterfront climate resiliency projects, we have the um ocean beach climate resilience project.

I don't know if there are bigger issues for the commission to hear about, but I think it would help to give us perspective on the projects that are coming and how we are spending our budget.

And finally, at least on my list, I'd like an update on how our hiring and recruitment is going, workforce issues, and how we are doing outreach and workforce retention as well as workforce recruitment and our efforts on diversity, equity, and inclusion.

So that's my list.

Or staff may also have uh suggestions on things that you think we need to hear about that are more big picture, more long-term, but help give us uh that perspective.

And the trainings that we go through as individuals are absolutely invaluable, but I think it's also really important to daylight those issues and to get public feedback and for us to hear about them collectively.

So that's a long list.

I I would like to sit down and get these on this on the schedule.

I know we we've had some ongoing ones, but it feels like it is time to maybe start that process over again.

And it may already be on our calendar for next year, I'm not sure.

Um, so anyway, that was a long list.

Commissioners, if you have anything to add, Commissioner Thurlow.

Yeah, I will add to the list.

Thanks, President Stacy.

Um, dovetailing off of what President Stacy already mentioned related to climate change.

I think an overview from the wastewater team on how we're thinking about flood planning and flood projections based on increased uh variability in precipitation would be helpful and how that sort of connects to the capital planning process.

And then just to pick up a thread that came up in today's meeting, this idea of emergency response planning across enterprises, probably, just thinking about an opportunity to imagine in a scenario where we have a large-scale emergencies.

What are we planning for?

What is our um, you know, what is our response plan in particular?

Thank you.

Great.

Thank you so much.

Those are really important topics.

Commissioner John Dar.

Thank you, President Stacey.

And also underscoring what you mentioned, particularly interested in the inclusive procurement, community investment and uh workforce training for uh local workers and local contractors.

I really think that that would be useful for everyone to hear.

I know there are some programs, and I know we have uh LVE requirements on each contract.

I would like to see better numbers there, uh, to so to see how we can plan for that in the future would be great.

And also uh to uh on the climate change theme.

We had a presentation on the climate action plan.

I think more presentations on some of the customer facing programs that are being developed and so that everyone can know about what's coming and sort of weigh in on that would be great.

Thank you so much.

These are really important, thoughtful additions.

And I would hope to uh sit down with the general manager and Ms.

Lanier to really try to get these on our schedule so that we make sure they happen.

That's a lot to initiate, and I would love to hear from the public on this topic, too.

Remote callers, please raise your hand if you wish to provide comment on item 10.

Are there any members of the public present who wish to comment on this item?

Demetrius Williams, thank you.

Uh, really appreciate um the commissioners uh turning in on this because it's a a serious concern for our community.

You know, uh God forbid that we do have a national disaster where raw sewage is coming down the streets of Bayview down Third Street, down a corridor to Evans Avenue, and there's nobody in place.

I know we have measurements in place.

We have the water department, we have the sewer treatment plant, but uh in a critical, like the earthquake happened a few days ago at three in the morning.

Where is the critical response team at at three in the morning?

Of course they sleep or at home where they're supposed to be at.

But if we have training in our community for a plumbing company like mine, CIW and Sons Plumbing, and um, so my father, that's what CIW stands for, Clarence Isadora Williams.

He was he worked for the water department for 42 years before he passed away last May 10th.

Uh so I was inspired by that by the gentleman who just got the plaque.

Thank you again for issuing that plaque to that gentleman while he's alive.

So that was inspiring also.

But I just, you know, I'm super excited about the sewer treatment plan.

I'm glad that we're doing some more work to make sure that the water is actually being uh filtered before it goes back out into the bay.

That was a phenomenal opportunity.

And we have a biogas, a new uh uh process that's about to take on the methane gas that's about to be in our community, also.

We don't have no, you know, it's a lot of concerns that we have, but we also are excited about new technology and new opportunities to clean the air and clean the water and make sure that it's more uh tangible for wildlife in the sea and for the air quality of life, especially in the Bay View.

Thank you.

Thank you.

I definitely am interested in training, training, training, and involving the community into what is best for our community.

I mean, just not just our community, San Francisco, you know, the air quality, water quality, or what have you.

If people are trained who actually live in a community, well, wherever they live at and are able to do work in that community, um, it will benefit uh the morale and just the awareness of, you know, what's going on in the community as far as you know, technology goes and just nuances and things that are happening to help us grow as a people, as human beings.

Like this, you know, just the investment, you know, into your own community.

Dollars are there.

And so the residents there particularly are supposed to be having these benefit packages that would honor them.

The Southeast facility, wonderful facility, so many great things happen there.

That's all I know at this point as far as a community benefit.

We need more.

Thank you.

Item eleven.

Public comment on matters to be addressed during closed session.

Remote callers, please raise your hand if you wish to provide comment on item twelve.

Are there any members of the public present who wish to comment on this item?

Seeing none, moderator, are there any callers who have their hand raised?

Thank you.

Commissioners, may I have a motion on whether to assert the attorney client privilege on the item listed on I under item twelve?

Yes.

Second.

Thank you.

President Stacy.

Commissioner Jamdar.

Aye.

Commissioner Leveroni?

Aye.

Commissioner Thurlow.

Hi.

The motion passes.

San Francisco government television.

San Francisco Government Television.

I want to thank our city partners who are joining me here today.

Thank you, Mayor Daniel Lurie, District Attorney Brooke Jenkins, and Supervisor Danny Sauter for your continued support of public safety and the San Francisco Police Department.

Today I'm here to discuss a significant operation our officers executed throughout the day yesterday, focused on illegal dirt bike riding in San Francisco.

Let me be clear.

Our officers worked in close coordination to seize six dirt bikes and an ATV that you see here.

Four of these dirt bikes were reported stolen from areas around California, including Modesto, Uba City, Grass Valley, and Atascadero.

We also made four arrests for violations, including possession of a stolen vehicle, joy riding, driving without a license, and driving without registration and insurance.

These arrests are operationally challenging.

These dirt bikers often ride recklessly on public roadways, sidewalks, and pedestrian areas in direct violation of traffic laws, making it difficult to pursue them.

Thank you, San Francisco Police Department members, for your hard work.

I want to thank all the officers who worked hard to make these arrests.

When this activity comes to San Francisco, our officers are alerted and immediately develop a plan to stop the activity and seize bikes and make arrests when possible.

While we made several arrests yesterday, these cases are not over.

Operations like these prove we have the best officers in the country.

And just so I'm crystal clear.

This activity will never, will never be tolerated in San Francisco.

And our officers have the tools and technology to enforce the law.

Thank you.

Good afternoon, Mayone.

Before I get to today's announcement, I want to address the four point three earthquake that struck the East Bay around three A.M.

I'm sure many San Franciscans felt the shaking as it did my family and myself.

Thankfully, we have not received any reports of damages or injuries, and morning commutes were just minimally affected.

I want to encourage everyone.

San Francisco Government Television.

I have an announcement that the commission took an action in closed session to recommend that the board approve the settlement referenced in item number nine.

Please read the next item.

Motion regarding whether to disclose the discussion during closed session pursuant to San Francisco Administrative Code Section Six Seven Point Two A.

Commissioners, could I have a motion on whether to disclose the attorney client discussions we had in closed session?

I move that we do not disclose the discussion from closed session.

Second.

Commissioner Jamdar.

Aye.

Commissioner Leveroni absent.

Commissioner Thurlow.

Aye.

The item passes.

Thank you.

This meeting is adjourned.