Commission.

Ms.

Lanier, can you please call the roll?

President Arce.

Here.

Vice President Leverone.

Here.

Commissioner Jamdar?

Here.

Commissioner Stacy?

Here.

Commissioner Thurlow.

You have a quorum.

Thank you, Ms.

Lanier.

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 ethnohistoric territory of the Mowakmaalone tribe and other familial descendants of the historic federally recognized Mission San Jose Verona Band of Alameda County.

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

It's vitally important that we not only recognize the tribal lands on which we reside, but also we acknowledge and honor the fact that the Moekmaalone 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.

And with that, can we please call item three, Ms.

Lanier?

Item three approval of the minutes of September 23 and October 14, 2025.

Commissioners, are there any calling uh corrections from you colleagues to the minutes of September 23rd or October 14th?

And if not, can we take public comment, Ms.

Lanier?

Yes.

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?

Thing none, moderator.

This is for item three approval of the minutes of October 23 and October 14.

Moderator, are there any callers who have their hand raised?

Ms.

Lanier, there are no callers with their hands raised.

Thank you.

Thank you, Ms.

Lanier and colleagues.

If there's no corrections to the minutes, can I get a motion to approve the minutes of September 23rd and October 14th, 2025?

Move to approve the minutes.

Motion by Commissioner Stacy.

Is there a second?

Second.

Commissioner Leverone.

President Arcee?

Aye.

Vice President Leverone.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy.

Aye.

Commissioner Thurlow.

Aye.

Item three passes.

Thank you, Ms.

Lanier.

Can you please call item four?

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.

Thank you, Ms.

Lanier.

Just a reminder 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 general public comment.

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

I have Mr.

Francisco de Costa.

Commissioners, I want you to pay careful attention to what I'm saying.

Joe King, who was the first Samoan doctor in San Francisco.

He also was a pastor.

Who built a church and a good congregation?

Sad to say.

Two people from the family.

And not only that, his son's friend.

I know the general manager very well.

I know the chairperson very well.

And I've seen y'all.

This is a cabal.

Rubber stamping.

Paying no attention to what is happening to the workers.

Some time ago I stated very clearly, because the spirit came upon me that people are coming to me for help.

Why do they come to me for help when you have to have a system to protect your workers?

But this case is going to teach y'all a lesson.

There's a department of labor, and there are other places we can go to.

But if y'all have common sense and if you have empathy, you can restore and give a second chance to all these tree workers because they don't deserve to be treated the way they did.

Thank you very much.

Now I'm going to present this document.

Going to present this document.

Thank you, Jenny.

And give it to the general manager.

Mr.

Sedro, may you?

How are you doing?

Um I um I represent uh my um my nephews here.

Um I'm a retired uh uh maintenance supervisor from Caltrans.

Um I've I I've got a lot of experience in um termination, and what and and and what I what I witnessed and seen here with with these three total, I mean there's a way to do it, there's there's a professional way to terminate people, you know.

There's a proper way to do it, and there's and there's a protocol to do it, and that's not what happened here.

It was it was total disrespect, dishonor.

Um it kind of it kind of seemed like uh um they were truly targeted.

And it seems like uh, and it starts like this it starts from the top.

You know, we we we have the top, you know, the managers, the supervisors, and then we have the workers.

And if the if and if it starts from the top, if management is corrupt, then the workers have no chance because they're already targeted, they have no chance.

So anything they say, it it just goes downhill and it's all bad.

And and that's and I believe that's what's going on here right now.

You guys need to to investigate and find out before anything worse is gonna happen because that's what I'm hearing.

You know, a lot of people is getting, you know, getting taken out, you know, on false uh acquisition.

And uh we done heard it from thank you for your comments through different entities where people that that get fired for nothing.

Thank you for your comment.

Thank you for your comments.

But you know, you guys, I appreciate it.

Mr.

Joseph King.

Thank you for your comments.

Hello, Commissioner.

Uh my name is Joseph King, and uh, I'm a lifetime resident of San Francisco.

I was recently terminated at the SFPC Water Enterprise.

During my tenure, I was promoted five times.

My final promotion was a supervisor labor one, making me the first politician in history to hold a supervisor role.

Oh, I'm a victim of retaliation, harassment, bullying and false accusations.

The reports and investigations against me were fabricated and misleading.

These actions called me to get terminated.

So it's being terminated, I've suffered severe emotional and mental distress.

I was hospitalized, required psychiatric care.

My relationship with my wife was deeply strained, and we nearly lost our home.

I lost my livelihood, my dignity, and sense of purpose.

It truly felt like I was attending my own funeral.

I'm asking for justice and accountability.

No one should be ever treated with such hatred, deceit, and cruelty, especially in public institutions, meant to serve the community.

Thank you.

Thank you.

There we go.

Hello, commission.

My name is Adolfo Padilla Rios.

And same as my colleague, we were both discriminated against.

We were used as exhibit for a world humiliation.

They wanted to ensure that we knew upper management is someone you don't complain about.

We were used as pawns for their tactics of inflicting fear into the workers.

Pictures of a twelve by eighteen with nothing but our face were posted for exhibit for anybody coming in and out that C D D yard, breaching the privacy and confidiality of an investigation.

They portrayed us as animals as if we were the most wanted.

But that's what the manager at C D D does with his Tyson friendships down in the PUC building, allowing him to do as he pleases and bypassing our police any of your policies.

Now what good are policies for?

If you guys don't know hold them to your two integrity, do you guys choose who they apply to or not?

Or are they made to lean more towards a certain demographic group?

Because that's what it seems like.

I sat in a dark place for over a year stressing my mind eating this out, trying to break down what was going on, but never did I get any answers.

I worked for over six years, dedicated my best time to this company, holidays, family birthdays, days with hardly any sleep, the real true blessed sweat and tears, received two promotions and two awards, one of them which is the yearly award that you guys give out, the impact award of the year.

But what good is that for if the PUC violates every moral it stands on?

I was picked on and bullied by CDD managers and HR, reassigned three times with no explanations to the reason right.

This has been an emotional train wreck, physically, mentally, and all due to retaliation.

Those chairs represent people who are cold hearted and only seek pleasure in seeing others fail when it benefits them.

They are power-seeking individuals, monsters really.

These positions should be held by qualified paid people with dignity, those who uplift and motivate others to work, not bring them down or make them dread their next task.

Instead of inspiring growth, they create fear and resentment because they prioritize maintaining their power.

That's what CDD does to you.

Conrad Valencia King.

Hello, Commissioners.

My name is Conrad Valencia King.

I'm a proud graduate of Secretary Heart Cathedral High School.

Sorry.

Shortly after graduation, I was dead.

Then I landed a career job, record friendship PUC.

One of the happiest and proudest moments of my life.

That's my three months, ten years, things started off very positive.

However, after my father was falsely accused and placed on administrative leave, my experience changed dramatically.

From that point on, I began to feel targeted and harassed in the workplace.

Despite my dedication arriving early every day, perform my duties.

And I had a report, and I need to report to work and work boots.

I looked around the locker room, and I seen several employees walk in with tennis shoes, slippers, and crux.

Shortly after that, I was I was told a report to management office.

They handed me a piece of paper, informing me of accusations against me involving workplace violence and racism.

Seeing the smirks on their face made me feel frightened, humiliated and powerless.

Thank you for your comments.

My name is Shirley Thomas Box.

Just remember that.

I've been here, worked for five mayors.

Joe King and Malo at the hip.

If you weren't here in the early 70s, then you wouldn't know that.

If you're not a native San Franciscan, you would not know.

About Pastor King, you wouldn't know that this is really emotional.

I spoke with uh months ago, probably almost a year ago.

This has been going on for a long time, as the uh racist remarks that these people made towards my family, the kings, this is my family.

So you never know who's related to who in San Francisco.

Don't judge us by the melanin in our skin.

Because you just don't know how far their roots are.

And so for them to say, I spoke with a robelist or somebody.

She was an HR individual, I believe.

No, she was with the city attorney's office.

And I thought then that they would resolve this and realize that.

Don't make racist remarks towards someone who is black.

Who is Pacific Island?

Who has in San Francisco?

We're all multiracial.

Most of us are, if you track your roots.

And by the way, I just tracked myself to the the pit river.

They're a lonely as well.

10,000 years roots.

So don't worry.

You need to do right by these babies, because if not, this is only the beginning of what's gonna happen.

Thank you.

Steve Zeltzer.

Yeah, I'm Steve Zeltzer.

I'm with the United Front Committee for a Labor Party.

And I think that the this commission and the director of the PUC really are responsible for what's happened because what you have here is an example of systemic racism and a frame-up of workers accusing them of being racist and violent.

And the director of this agency said it's okay.

There was no independent investigation, and then they were told they could not reapply for a job with the city.

Was there any investigation by this commission?

And by the PUC, and we know the people of San Francisco know there's a long history of corruption in San Francisco at this agency.

At this agency.

People have stolen money, managers.

They've stolen from the people of San Francisco.

And the corruption was covered up by this agency and the commission who ran this agency.

Why?

Why is the corruption covered up?

It's because the politicians in San Francisco who appointed the director here did not want people to know what was going on in this agency.

That's why it was covered up.

So now this corruption is covered up.

People are not held accountable.

People have not gone to jail, really, some of the people who did this corruption.

And you go after black and Samoan workers here.

And unfortunately, the union as well.

Labor's 2621 did not stand up for them.

There is an issue of cronyism.

There's an issue of systemic racism, and it has to be addressed.

It's not going to go away.

And the people and the working people of San Francisco have a right to have justice in San Francisco.

The right to have jobs without being framed up, without being accused of racist and violence.

And you have a responsibility as commissioners to make sure that these people are got back on their job, are fully compensated, and the people who frame them up and lied, including their managers, be held accountable.

They should be fired.

Thank you for your comments.

Moderator, are there any callers who have their hand raised?

Ms.

Lanier, there are no callers with their hands raised.

Thank you.

Thank you, Ms.

Lanier.

Thank you, members of the public.

At this time, can we please call item five, Ms.

Lanier?

Item five, report of the general manager.

Thank you.

Ms.

Lanier, as a follow-up, commissioners, other things that we talked about, getting um uh reports on.

We're able to have uh the San Francisco's uh water supply planning, our process um here in Steve Richie will be uh presenting, uh good afternoon, commissioners.

Steve Ritchie, Assistant General Manager for Water.

Uh I'm here to talk about San Francisco's water supply planning.

Uh, and uh I'd be happy to answer any questions uh as I go through the presentation.

Uh but uh this will cover uh a lot of different things relative to how we plan for water supply.

Um, you know, first is an overview.

You know, our service is in perpetuity.

Uh it's 24-7, uh, it never ends.

Uh there's no end date to our operations.

We have to have them all the time.

Uh and every day, two point 2.7 million people uh rely on us uh for drinking water, for health, fire protection, uh, and all aspects of their daily lives and businesses.

85% of the supply comes from the Tualney River, with the remaining 50% uh from local watersheds and reservoirs.

Our daily operations emphasize high water quality and long-term water supply reliability.

Uh having junior water rights on the Tuomney River means that we have rights to very little water in dry years, but plenty of water in very wet years.

As a result, we're very reliant on stored water for our reliability.

Uh we engage in wise water use and regular planning.

Uh, we have very active conservation programs, both in San Francisco and through Bosca.

There are regional efforts that are always underway to promote conservation and the wise use of water.

We have among the lowest consumption per capita uh in the state.

Uh, we currently in San Francisco average about 41 gallons of uh residential use per capita.

Uh and uh in the wholesale area, about 55.1 gallons per capita per day.

Uh we also engage in uh particular uh angle on planning, this urban water management planning.

Every five years, all water agencies need to demonstrate that they have enough supply to accommodate anticipated growth over the ensuing 25 years, we really engage in smart operations and water supply planning kind of hand in hand.

Uh our management decisions and planning are guided by uh water first policy, uh experience and risk management.

First, with water first.

Uh, water supply is the top priority for us uh with our Hedgehog supply and hydropower generation is a secondary consideration.

We we like to generate as much as possible, uh, but never and putting water supply at risk.

Based on experience, we have found that there is plenty of water in normal years, but 1987 through 92 and the recent droughts we've experienced were very real and can be repeated or worse.

Our fundamental planning premise is that there will be a worse drought in the future.

And in risk management, that's that's one of the things that we do have to worry about.

How bad can conditions get, knowing that we cannot operate to zero storage at any point.

If we're at zero storage, that means there's no water for anybody.

So there's no cushion in that for the next potential dry years.

So we always have to have some water going into the next year.

The experience is sort of exemplified by what happened in the 87 through 92 drought.

This is a photograph of Hatchethi Reservoir in January of 1991.

And you can see that the water level is very low, and in fact, there's an island visible there in the middle of the reservoir, which I've never seen, and I hope not to see, because it is a very dry condition.

The next photo here is actually looking at the upstream face of the dam in March of 1991.

Uh, and there are red arrows here that point uh to where the uh intakes are, and basically all of the outlets below the dam, except for the very bottom one for canyon tunnel are dry.

So they're out of the water, that you can't suck any more water.

We were getting dangerously close to what we call dead pool conditions.

So our water, our level of service objective for water supply adopted in 2008 as part of the WISIP programmatic EIR, is to manage a specific eight and a half year drought planning scenario, 1987 through 92, followed by 1976-77, with no more than 20% rationing from a total system demand of 265 MGD.

One of the things that uh happened uh back in the mid-90s is we were in litigation with the irrigation districts, and uh this quote uh was taken from one of the depositions that was uh put together at that time as part of the litigation because the districts were arguing that we were too conservative in our water supply planning.

Uh and uh Anson Moran was the general manager at that time.

In the deposition, basically when considering all the factors associated with the city's entitlements to water, its physical system, and the dire consequences of just being wrong in the forecasting of the length of drought that may hit the city.

I cannot agree with any comment that the city's operation rule is overly conservative.

I keep going back to this comment because I think it really encapsulates uh how we have to think about water supply.

The consequences are too great for being wrong.

Some of the challenges we have ahead are the 2018 adopted Bay Delta plan.

Uh that is where there's an unimpaired flow and existing requirements or agreements may require up to 93 million gallons per day of impact to the regional water system supplies.

The number can be argued about, but certainly it's cons it would be significant significant.

The healthy rivers and landscapes program is an alternative currently being considered by the state.

It also contains greater in-stream flow contributions than current conditions, but less than adopted by the Bay Delta plan.

State actions in the area of curtailments and proposed legislation affecting our water rights have a potential impact on our supply.

Population growth, population will continue to grow, and one of the key things we have to deal with is that the evolving requirements on the state housing general plan elements put increased pressure on San Francisco and our wholesale customers to increase housing and the potential need for regional water system supplies.

And the lastly climate change studies indicate shifts to more precipitation as rain than snow and more extreme events as well.

So we're gonna have to deal with all of these things in the coming uh you know years ahead.

One of the things that we've done in doing in looking at that uh is the alternative water supply plan for the regional water system.

Uh it was requested by both the PUC and the Bosca board of Directors.

It's not an adopted plan.

It's not a plan to construct any particular project or projects, but it is a living planning document that gives decision makers information regarding potential future water supply issues and potential actions to augment the regional water system to retain our current appropriate risk management approach.

The catchphrase we've used with this is plan for our obligations, but actually build things for demands.

So some of these, some existing and potential obligations, is the supply assurance of 184 million gallons per day for the wholesale customers.

That adds to a combined total of 274 million gallons per day.

That is, you know, one way to measure our obligations into the future.

Demands are not at this level, but this is where you know things may end up.

And we'll talk about more on these in a future presentation.

The total regional water system demands that we have been looking at were 244 million gallons per day based on the 2020 urban water management plan.

And we're doing a new urban water management plan on that cycle coming up in the next year.

And we'll be using one or more additional sets of demand projections for further analysis, in addition to uh the projections that are legally required under the urban water management plan.

And as we're looking at uh what things we might do, uh the alternative water supply plan recommendations uh have started to narrow down into some particular projects.

Uh advancing the planning of purified water projects, both in the pure water peninsula project, which would be done in conjunction with uh Silicon Valley Clean Water and the South Bay Purified Water Project.

Uh and we'd also develop further supplies from existing and other projects, uh, the regional groundwater storage and recovery project and the Alameda Creek Recapture Project, uh, which are the last two uh WISP projects to be completed that will have some additional supply in them, uh the San Francisco groundwater project, which we're uh moving along with uh, you know, nicely in the city.

Uh Pure Water SF, which would be you know basically purified water in the city of San Francisco, and potential projects with the Turlock and Medestral irrigation districts.

So that's a quick once over of you know uh how we go about water supply planning.

You know, I could talk about this probably for hours, but I don't think that's a very good idea right now.

And I'd be happy to answer any questions.

Thank you, AGM Richie.

Colleagues, any questions?

Uh Commissioner Turlow.

Thanks, AGM and Richie.

Um I know this is the broadest possible topic, and so you won't be able to dig deeply into it, but can you comment briefly on how the interannual variability and snowpack and how you know sort of large shifts in precipitation to rain actually are impacting the planning and operations at this point?

Well, we are not currently seeing a large shift uh to precipitation as rain, excuse me.

Snowpack has been doing reasonably well.

The last three years uh remarkably have been almost exactly average, which is nothing's ever average, but but that last three years have been average conditions.

Average conditions on the 120 water mean or 12 river mean there's lots of water available for us, including the snow pack.

Uh what we are, you know.

I was just talking about this with staff earlier today, you know, modeling is a nice thing, but you know, keeping my mining the data every year every time we see get additional data to look at how things are shifting and what kind of things, because right now, a good example is this is a La Niña year.

Well, people say, oh my god, it's La Nina, it's gonna be dry.

Well, we did analysis, you know, not too long ago, and La Niñas are sometimes wet and sometimes dry.

El Ninos are sometimes wet and sometimes dry.

There's no pattern that is there explicitly, uh, no pattern to see.

So we're gonna stay on top of this constant constantly.

We do a lot of work uh analyzing how much water we do have and how it flows through the system.

Uh so yes, we do expect over the long term to see more precipitation as rain.

We're not seeing it immediately, but that doesn't mean it's not going to happen and and probably will happen.

As we get to more precipitation as rain, it will just mean we operate our reservoir differently because the inflows will come at different times.

Okay, so does that mean that there's no significant sort of capital planning required to address the potential for more variability at this moment?

We're gonna wait basically until we begin to see discernible trends.

Well, what we're doing is we have all these things we're looking at, and climate change was one of them, but you know, there's a number of other very real issues we have to deal with.

Uh and population growth may actually be the largest one uh if the housing elements really get all completed.

Uh so we need to worry about those, and that's why we are looking at all these all different supplies uh that if we can if we have to start backfilling uh or you know overcoming some shortfalls in our water supply that we are able to do it.

Okay, excellent thanks.

Thanks, Commissioner Thurlow.

Commissioner Leveroni.

Thank you very much.

Um it is a complex issue, and and I'm trying to get my arms around it.

And this question might not have an answer at this time, or if it might even not be possible.

But the question is is that we're at eight and a half year drought design, I guess that's what you call it.

And we've experienced some serious um droughts, and we were able to get through them with our excellent planning.

My question is is what happens if we changed it to uh back then, not now, but if we were able to see if we had a seven and a half year drought or a six and a half year drought design, would we have run out of water uh during those years?

Is that or would we have gone to zero?

Is that possible to calculate?

Yeah, I'll say the the eight and a half year drought sequence was a direct offshoot of the 87 through 92 drought.

That was when uh literally, you know, they got to the end of that drought.

They, I was not here at the time, and said, how do we plan for next year?

And they said, well, it doesn't pay to think it's gonna be a wet year.

We have to think it's gonna be a dry year.

So we should plan.

We should basically that would have been the cycle we were going through at the end is what if the next year is dry?

What if the next year is dry?

Uh since that drought, uh we have not had uh a drought of that duration.

We've had two significant droughts, but they were of a shorter duration.

Uh they were they were very deep, but they were short duration.

One of them uh, you know, one of the things, one of the things that we have a tool that we use is our water bank in Don Pedro.

That gives us four years of drought protection.

So the longest one of those was basically a four-year drought uh and water bank almost emptied.

Once water bank empties, then we're releasing water from our reservoirs uh to the districts.

Uh so that's that's as deep as we've gotten in the last few years.

Uh another couple of years of drought, you know, bridging between those two droughts, that would have put us in a scary situation.

Uh so you know, would we have survived?

Yes.

Would we have thrived and would we be able to be confidently be going in the future and do something different?

I would not advise it.

And do when we look at the drought design number, eight and a half or whatever it might be based on all the data that you've collected, um, do we change that number?

Is that like a five-year number that we maintain, or is it something that we review every year?

Um, well, basically what we do is we actually you know model the effects of different things using that as kind of the touchstone of how how it might work.

Uh the real the real you know uh uh point where it came into play was during the water system improvement program, programmatic EIR.

That was where we had to model the effects of all kinds of different changes in the system, and that's when we used that as the the modeling touchstone on how everything would perform uh so when we think about new changes we always think okay we're gonna model it against that drought and see how it would perform.

Thank you very much.

Thank you Vice President Leveroni Commissioner Stacey.

Thank you and thank you for this presentation I actually went back and listened to the August 2022 hearing or workshop that the commission conducted before I joined it was um interesting to remind myself of all of those issues many of which you've touched on today.

I I have a couple of sort of questions to make sure that I'm understanding um what you've told us and what I've um learned over the years.

The urban water management plans um with a prediction of 244 MGD that is an aggregate number for all of the users of the regional system plus San Francisco is that right?

Yes.

And that's 25 years out based on the individual urban water management plans that each entity is based on San Francisco's analysis of our system which the urban water management plan requirement is you take the planning numbers from the planning department and you say do you have the water supply for that amount I've said in the past that presents an outside envelope because a lot of things never actually materialize so generally you're probably not going to reach that level but state law requires that we show that we can reach that level if we have to for our wholesale customers they present us with their purchase projections that they're going to have they're going through the same urban water management planning process so it's informed that way.

And I know Mr Smegel is here from uh Bosca and he may make some comments that may help uh elucidate what they do uh in particular.

So when we think I I guess I think of the design drought not only as a stress test but also a management tool right where when we release water where where we move the water if if we're looking at uh 244 MGD rather than a 265 Mg G D, does that does that affect the way that the water enterprise would make decisions about how to manage for that design drought um not really um you know we're we're looking at uh again the design drought is like the stress test was is is a good word I know we use that a lot uh that it does you know when you're when you're trying to decide what to build or how to change the system uh that you would use this as a tool to help you understand the impacts so we would understand the impacts at 244 million gallons per day 265 million gallons per day uh if somebody wants to go beyond that at the time uh in the WISAPER we actually were looking at 285 million gallons per day uh so whatever the level whatever you know we can apply it to whatever uh whatever demand that would that we choose uh and see how it plays out I see okay thank you um and you you have the photo of the um hechechi reservoir that shows I think you said it was from 1991 that shows how low the reservoir got does the 8.5 year design drought is that with the assumption that we get to zero water that we get to that dead pool um situation the eight and a half year design drought basically does get us to in effect, dead pool.

So as an operational consideration uh two years before that or three years before that, you know, I or my you know successors need to have real concrete plans and what to do.

I was quoted in an article not too long ago that one of the things that I I I don't think about every night, but it does come to mind in mind time to time.

If what if we get into a biblical drought, you know, then eight and a half years is nothing then.

Uh so I I think that's the kind of thing that uh you know California needs to be thinking about in in some context, not as an immediate planning tool, but things can get worse.

We've seen them get worse, we've seen deeper, we've seen a huge flood in 1861-62, and you know, we could see a deeper drought uh in the future is uncertain.

Again, for for our planning purposes year to year, it doesn't pay to assume it's going to be a wet year next year.

Right.

You know, if it is, great, but if it if it starts to be dry, we're ready for it.

And just one more uh question about maybe a clarifying question.

The commission implemented that water first policy maybe in the early 90s is am I remembering that correctly?

Um yeah, it's always been around, but for sure at the end of that drought period, the 87 through 92, uh it became very clear that that was what we needed to do to protect our water supply.

And did that change the way that you managed the water that you weren't releasing water just to generate power anymore, but did that mean that the way that we were moving water from one reservoir to another changed?

Yeah, the biggest impact was on uh the amount of power generation that uh and the basic rule that you know don't generate power uh if it's going to adversely affect water supply.

A couple of years ago, the state had real uh problems, you know, meeting statewide electric demand, and so we did suspend the rule for a short period of time to help make sure that the state could meet the uh the power demands, but uh the rest of the time it's operated to make sure that we're not generating power at the expense of water.

Okay.

I think that's it for me now.

Thank you.

Thank you.

Thank you, Commissioner Sacey.

Commissioner Jamdar.

Thank you, President Thompson.

Thank you, President Darcy.

Uh so uh just following up on some of the questions, the the eight and a half year sort of design drought period will be reviewed at some point in the future, or is that for now set for a few years?

Um we have continued to utilize that ever since uh the end of the 87 through 92 drought.

Uh we used it particularly where it was really, you know, used in a big way was in the uh water system improvement program uh programmatic environmental impact report where you had to assess the impacts of all kinds of different uh uh measures.

And so that's where we used it uh at that point.

Uh you know, the commission could uh look at that and say, you know, let's do something different.

Um I mean we can always run many of scenarios of all kinds uh to look at things, but that as you know, basically our fundamental planning and operational tool uh, you know, uh we have you know continued to believe that it is the best one available.

Uh it's interesting to note that uh the state of California uh in the urban water management plans used to require everybody to evaluate a three three year long drought.

Uh and after uh one of the recent droughts, they extended that said, ooh, it's getting drier.

Everybody should look at a five-year drought.

I'm looking forward to the next iteration of that, which may be that everybody should look at an eight and a half year drought or ten or twelve, you know.

You know, it's in one level, yeah, you know, it it's it's just picking a number.

Uh this is one that we think is uh a reasonable approach because it doesn't go far beyond the historic drought, but it does uh say that we recognize that it can be worse than that one was.

Yeah, I guess uh I'm not a water expert, so forgive my uh questions, but uh I guess my concern is uh would that conservatism on the design drought here uh kind of if impact rates, you know, water rates a lot.

I mean, how much does it impact water rates to sort of shorten that uh you know, assumed design drought?

Um is that significantly?

Yeah, we have we have not done a specific analysis uh about that.

Uh and the design drought is just a planning tool.

You know, the decisions on what we spend our money on uh in terms of water supply, uh those are you know project decisions that the commission can make and uh you know it's you know they're all to some degree of risk.

Uh we could spend many billions of dollars uh and get zero risk.

Well, we're not gonna get zero risk.

Uh, but you know, the upcoming, upcoming uh uh budget process, I think will be a good place to understand, you know, some of those risks uh and what we're gonna choose because you know, I'll I'll tell you right now, knowing where the where the water uh capital program stands in draft now, you know, we've got too much in there, we're gonna have to cut it back a little bit or extend it out uh for a longer period of time.

Uh and that means that we're going to not do things that would be at least nice to do, but are they absolutely essential at this point in time?

Those are the kind of decisions we have to make.

Thank you.

Thanks, Commissioner Jamdar.

Thanks for the questions and dialogue.

Thank you, AGM.

Richie.

My kind of um question is touches upon some of the different questions that commission colleagues have asked.

And when I look at the design drought calculation and the methodology, I feel like there's two different filters by which you one can look at it.

I mean, I'm sure there's more, but one way to look at it is from a ecological conservation sense.

Um, we all have a ton of respect for for Andy Moran and the quote I cannot agree with any comment that the city's operation rule is overly conservative.

I mean, that's a wise one.

I think the the corollary I I threw this out here earlier in the year when we're having this conversation, another kind of lens from an ecological and conservation standpoint, and maybe even one was oneness with the land is taking no more than we need.

And I feel like that's kind of something we're trying to strike as a as a balance.

Um we want to get it right, obviously.

I have a question in a moment because I was also going to ask about rates, and my understanding, maybe kind of piggybacking on what Commissioner Jamdar had mentioned, is rates maybe the only direct implication potentially is to the extent to which we're building out alternative water supplies in order to meet certain targets in order to kind of be where we want to be in terms of our planning.

Is that is that the right way to look at how the design drought kind of planning process may have some implication around rates vis-a-vis the capital costs of reaching certain supply levels?

Yeah, uh I would say that uh, you know, many of the comments the uh commission receives is uh oh, you are using this planning tool, and because you're going to use it blindly and just build things to make those numbers fit, that's that's where you're making a huge mistake and you're gonna spend billions of dollars you don't need to spend.

I don't think that's the way the planning process ultimately works.

You know, you have to make choices on these.

Is how much risk are you willing to bear uh that you might you know get into that situation?

So I think those are the things that uh you know the commission will have to decide over time.

Uh one of the things that's very clear to all of us is that uh you know the the low-hanging fruit of water aren't there anymore.

You know, the the cheap water supplies, all new water supplies are gonna be more expensive.

So that's where you know it makes you sit up and really take notice.

Well, I appreciate that after maybe the meeting before last, the general manager and I had a really great conversation that made me feel really good about how we're gonna be able to have those kind of introspections during the budget process leading into rates and the conversations there.

I think for me as a ratepayer advocate on this commission and that rate payer advocate seat, but certainly I think everyone on this commissioner advocates for the ratepayers just thinking about how earlier in the year we saw our projected rates that would kick off next year with the first of four years in a row of double digit rate increases for San Francisco ratepayers, maybe not quite double-digit for regional who aren't paying the combined rate alongside the wastewater costs.

But I'm really hoping that when by the time we get to setting rates again, we're able to really have a have a process to find where we can at least slow down some of those increases.

You know, 10 years out, we get really, really close to our affordability target.

We got a lot of headroom there now in providing world quality water, I mean, literally world quality.

We had some folks from Germany were in town, and uh Paula Keho gave a presentation, and everyone there from around the world was saying that's the best water they ever had.

But at the same time, you know, affordability.

You know, this is seems like from what I understand the cost of capital projects being a big driver is something that I'm looking forward for us getting getting a chance and inviting the public to weigh in, you know, because at some point we all got to remember what what Andy Moran said.

We can't get it wrong, we can't run out of water.

We know that, and I know that you have my trust, and I think all of us here, you and your team have the trust that we're not taking more than we need.

The only question, maybe back to the conservation side is I remember one of the communications we got at one point was talking about valley water and valley water.

It maybe they were an agency, someone that used maybe the five year, the 87 to 92 kind of um drought scenario.

I'm wondering if there's if there's any kind of apples to oranges with any other agency that's using a different scenario than our in our eight year, or or we being more kind of predictive of the predictive of the trend that you just mentioned, which is the state is kicking out its kind of recommended baseline for drought planning.

Well, I think that trend is there.

Uh but uh when you look at water agencies, everybody's supply mix and conditions are different.

So everybody, you know, has to make their choices where they are.

Uh but one thing I know that is very, very clear.

Every water agency in California is facing affordability issues, water and wastewater agencies.

Uh, we all have the same the same issue of you know, we can't you know make our products unaffordable.

That that simply does not work.

Uh so I think that is very clear to us, and those are the kinds of discussions that we're gonna get into in the budget process of you know, there are some things that we're gonna propose doing, and there are some things we're gonna have a list of that we're not gonna propose doing because you know we'll have a problem with affordability if we do those.

Those are the kinds of discussions I think we'll get into, because there might be something on that list that people say, but that really seems like a good thing to do.

Okay, well, it's gonna cost you those kind of conversations that are that are not easy ones, but they're worthwhile having.

Thank you very much, AGM Ritchie.

Unless there's any other questions, we can go to public comment, please, Ms.

Lanier.

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

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

Commissioners.

Um in this discussion.

I know you said it's only for discussion, but it's they called Tom Smagel's name first.

Cool.

Tomel Mr.

DeCosta, do you mind if only since he submitted a card?

Would you would you uh could we please take comment from Mr.

Smigle Smigel who gave us a card and then we could hear from your comment?

Kindly.

Thank you, Francisco.

Uh thank you, President Arce and commissioners.

Uh Tom Smegel from Bosca.

I wanted to remind you all that uh Bosca's mission is a reliable supply of high-quality water at a fair price.

And we appreciate the planning that San Francisco PUC does to maintain water supplies and water quality.

And we think it's especially important to plan to meet obligations, even if our our short-term demands and drought impacts may seem smaller at the current time.

And I will add, as uh AGM Richie mentioned, we're all in the process of updating our demand studies.

Bosca's demand study for the region will be done in December, and I hope to bring that to uh SFPUC in a presentation in probably in January.

Uh so I look forward to doing that.

Um see has prudently investigated alternative water supplies, but it's important to note that the planning is there, but the execution is waiting for the demand to catch up.

So uh Bosca really supports the idea of planning for these potential alternative water supply programs with the understanding that they're not going to be built until there's an obvious need coming up for them.

Um, and so what you see in the CIP is a very small amount of that CIP is related to the alternative water supply program.

Most of the water CIP and the HECHI and regional water CIP have to do with water reliability.

Uh, and so I think you all have taken a uh trip up to Maucus and the uh the moccasin pen stocks are a huge risk to us if those fail.

And so planning for the execution of a replacement for those is vital.

That's the kind of thing that's the biggest part of the CIP, not the alternative water supply planning process.

So thank thank you very much.

Thank you.

Thank you.

Mr.

DeCosta?

Thank you for your courtesy, Mr.

DeCosta.

First and foremost, let me remind you, Commissioners.

You know, Don mentioned a dangerous people from whom you stole the land and the water.

You do not respect the indigenous people, and you will suffer for that.

Now, let me tell you, you hear some tales here.

You use clean drinking water to flush our toilets, millions of gallons.

You are supposed to replace the old pipes.

We haven't got data in the last five years.

You're not doing your duty, millions of gallons leach into the into the watershed and into the land.

Now, let's talk about the RECA Act.

Did ARECA Act mention Baswa?

Did Eureka Act mention IBM and all these computer firms that take millions and millions of gallons of water to do the coolant?

You are greedy.

And if you are greedy, you will fall flat on your face.

Commissioners, be realistic.

Don't try to bluff us.

Mr.

Richie, who tries his best, but his days are over.

Thank you very much.

Moderator, are there any callers who have their hand raised for item 5a?

Moderator, are you there?

Miss Linair, there are seven callers with their hands raised.

Thank you.

Caller, your line has been unmuted.

You have two minutes.

Thank you very much.

I'm calling from Redwood City.

Uh, we purchased our water from uh uh from the public utilities commission.

I was just at a meeting in Redwood City with the public service uh department, and uh Redwood City is proposing an increase in rates of twenty-one percent uh this coming year, and most of that, or at least half of that, is connected to the rate uh higher rates that they have to pay the San Francisco Public Utilities Commission.

So this is an affordability question for us.

And I don't think that Mr.

Richie's response response was adequate.

He said, for example, that you have to prepare for a biblical drought or possibly a biblical drought.

Most people who've looked at these figures determined that the possibility of the design drought of eight and a half years is about one in eight thousand years for that sort of sequence to occur.

So it's good to be to be prepared for water shortage, but the knock-on effects for people like me and Redwood City and all the other people who buy it, is ultimately we're going to have to pay for this.

So you can't just pick a number, you have to pick a scientifically intelligent number that is reasonable and not absurd, because finally we're going to have to pay for it.

The second thing I'd like to say is that one of the uh continual problems of SFUC is the demand projections, projecting all this demand.

Well, in the last ten years, demand projections have always been higher than uh what uh uh than have actually been the use of the uh of water, which means that you have to you don't get the same income, so you have to raise the rate.

So we're caught in a cycle of rate rate rises, and a lot of people are going to really resent that.

And I think that we need to do a better, uh more um aggressive study as to actually what the needs are going to be and also what the reality of a possibility of a long-term drought is, and not just pick a number out of the air.

Thank you.

Thank you, caller, for your comments.

Caller, your line has been unmuted.

You have two minutes.

Oh, hi, my name's Dave Warner.

Uh, my comments will be very similar, actually, to the previous callers.

Um, first of all, thank you all for your service, and thank you all for your trivic questions.

And I thought for the most part, uh A.G.M.

Ritchie gave very nice, clear answers.

Um, the second point is I would like to make that your um have a wide-ranging impact, and I haven't heard the SFPC uh quote a 50% rationing for a number of years, yet I think um it's been mentioned that Palo Alto did a $500,000 supply study because uh they were concerned about 50% rationing and then ultimately put that on the shelf.

And so that's an immediate impact.

If we didn't have the design drought the length it was, I think that idea of 50% rationing wouldn't um uh wouldn't be out there.

And then remarkably, again, with the previous caller, uh the Redwood City public works team mentioned the 50% rationing and their concern about that with the Bay Delta plan.

And again, if the design drought weren't the length it was, there wouldn't be this 50% rationing figure.

So it does have an impact on a lot of people's planning, uh, perhaps more broadly than you might imagine.

And then the last comment is um you've you made a number of comments about you know whether or not this is the appropriate drought.

And the one thing I think, and I really appreciate you reading all my letters, but I think the main thing is rather than speculating on whether this is the design drought's the right length, get the data, understand the probability, and that way make the judgment call then, as you would with most risk-based decisions on whether this is the appropriate length of drought.

Uh, thank you so much.

Thank you, caller, for your comments.

Caller, your land has been unmuted.

You have two minutes.

Can you hear me?

Yes, we can hear you.

Uh good afternoon.

My name is Mary Butterwick.

I'm a longtime resident of San Francisco.

2019, several members of the public, including myself, attended and testified at numerous SFPs submission to revisit its extremely conservative 8.5 year design drought, it's inflated water demand projection, and to support the Bay Delta plan.

Thus far, the commission has been on response to our concerns.

CDC estimates that implementing the state adopted flow standards in the top of me result in 93 MGD of impact to regional water system supplies.

To put the 93 MGD figure in perspective, look at water demand relative water supply.

SFPC demand has been under 200 MGD, 200 MGD equates to 224,000 acre feet per year.

On the supply side, average year with the Bay Delta plan in a PUC would still be entitled to 647,000 acre feet.

But use 224,000 acre feet, leaving 423,000 acre feet in storage.

So really, how significant is this?

Bear in mind that the Tuolumne is an ecological crisis due mainly to inadequate flow releases.

The TRVA is not the solution because it provides little in the way of new protected water.

This voluntary agreement is no substitute for enforceable flow-based water quality standards.

Thank you.

Thank you, caller, for your comments.

Caller, your line has been unmuted.

You have two minutes.

Hi, it's uh this is Martin Gothford, and thank you for your time.

Everyone, um, I'm a consumer of Tuolumne River water.

Regarding the SFPC water planning information provided earlier this year.

Thank you, commissioners, for asking excellent questions and driving the discussion with A.

GM Richie.

The eight and a half year design drought, an extremely unlikely event as stated by an earlier collar drive.

So water, a planning mindset of perpetual drought, thereby hoarding water behind reservoirs, starving the rivers of needed flow during crucial periods.

Typically a massive release than follows during wet years, largely unhelpful to the rivers and does not allow progress towards meeting requirements of the Bay Delta plan.

Surely we can do better at water management in that regard, and the discussion really doesn't address any of that, that I hope to hear in the future.

So as a consumer, I worry about driving capital investment because of this eight and a half year drought and debt surfacing means well into the future, leading to large and sustained uh increased water rates.

So anyway, thank you again for your time and for letting me be part of this discussion.

Thank you for your comments.

Caller, your line has been unmuted.

You have two minutes.

Hi, everybody.

My name is Mark Shahannikon.

I'm a resident of San Francisco, and of course, a customer of the SFPC.

Um I have a few points.

We have been at 265 MPD since 1988.

And we've dropped from our 2000 era peak by about 30 percent.

We were right around two, Zen, and now we're at 180.

Uh, include retail and wholesale for the SFPUC.

So there's a real tendency to overproject demand on the part of the SFC.

In every urban water management plan, they overprojected.

The 2020 plan, they've overprojected where we are now by about 20 percent.

Um, and so the it it feels a little bit like fear-mongling on the part of the SFP, not just the design drought, but the uh demand that attaches to it.

And we should actually we should be excited about drought.

We should plan for biblical drought because water demand comes way down in a drought and it doesn't go back.

If you go back and look at the numbers, there's a drop every time and it never goes back to where it was.

So it ends up being good for the environment.

Um, and then as other people mentioned, problematic for our fiscal posture because you're a fixed cost and fewer gallons to spread it over.

Um, and the thing that the commission may probably realize, but just to highlight it, I've got a screening kid here.

Um, is that there are a bunch of water agencies in Bosca, like the city of Hayward, for example, that have very little incentive to tamp down their demand projections, and they pass those on to you and you take them wholesale.

And so there's no real.

Thank you, caller, for your comments.

Your time has expired.

Caller, your line has been unmuted.

You have two minutes.

Hello, caller, are you still there?

Caller, your line has been unmuted.

You have two minutes.

Thank you.

This is Peter Dreckmeyer, policy director for Yosemite Rivers Alliance.

I did not change organizations, but Tuolame River Trust has a new name to reflect our expanded mission.

I hope you have a chance to review the email I sent yesterday, along with a letter I sent to you at the beginning of the year.

Today would have been much better than responding to all the issues we raised in that letter last time around.

But instead, I think staff was hoping to coast through with a fluff presentation and hope there weren't a lot of questions.

Thank you to all of you commissioners for asking very good questions today.

Regarding Mr.

Leveroni's question, the lowest storage got since the drought in the late 80s, early 90s with three and a half years worth of water and storage in 2015.

2016 was the average water year, and the SFTUC ended that year with five years worth of water in storage.

2017, the SFPUC was entitled to 14 years worth of water.

It's really important to know about uh San Francisco's water entitlement before making big decisions, and um and I'd love to share more information with you on that.

Um regarding Commissioner Stacy, you alluded to the 244 MGD projected demand by 2045.

Did you know that the SFC Finance Bureau is projecting 207 MGD of sales?

That's a big difference.

There was a question about impact on uh rate from the design drought and inflated demand projections.

This will be a great topic for a workshop.

I encourage you to organize one, invite us to present.

You won't be disappointed.

We haven't had any workshops initiated since General Manager Herrera took over.

It's time to hear from the public and give us more than two minutes.

Thank you very much.

Thank you, Coller, for your comments.

Caller, your line has been unmuted.

You have two minutes.

Yeah, can you hear me?

Yes, we can hear you.

Hi, my name's John Rose, the Pepe.

Um, I've uh been an angler my whole life, uh commercial.

Um just real briefly.

Um I went to the agenda and the access number on the agenda was wrong.

And it wasn't until I went to the TV that I saw the new access numbers.

So I don't know if other people have tried and they're not able to do it.

Um, I would um like to uh just as far as uh survival of the salmon.

Um, as people talked about the design drought, I would strongly suggest having a workshop around four or five years ago.

You had I believe four different workshops on everything, and it had the time for people to spell out their concerns for the commissioners to delve uh deeply into different viewpoints.

Um the other thing is uh probably not this year, but next year, if you have a chance, you should go up.

Um there's guided um and raft trips uh to look at the salmon uh.

Once again, thank you for your time and be well.

Thank you, caller, for your comments.

Ms.

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

Thank you.

Thank you, Ms.

Lanier.

Can we read the next item please?

And thank you, AGM Richie.

Thank you, and your team.

Mr.

Rara.

Yeah.

Uh Ms.

Lanier, uh, that concludes my report.

Thank you.

The next item is item six Bay Area Water Supply and Conservation Agency Report.

Hello again.

Uh may I have the slides up?

I only have a couple slides and I won't take too much of your time uh today.

Oh, I need to bring them up.

Um, I can do it without the slides.

You have it in your packet.

So um public has access to them.

That's fine.

I can do it without the slides.

So I just wanted to mention um uh two things.

One is an update on our financial review process.

Um in the water supply agreement between Bosca and the Bosca agencies and uh uh SAPUC.

There's a section 706 that allows us to review the financials.

When I started my work at Bosca about a year ago, we were a little behind on that, and I'm proud to say that with the cooperation of your staff and our staff and our consultants, we've caught up.

We completed two years of reviews in the last couple of months.

So we're now on schedule with that.

So thank you to the staff of SFPUC for that effort and getting us uh back on target.

Um the second thing I'd like to mention is that Bosca has two new conservation activities, and that was um uh referenced I think in uh Mr.

Richie's uh presentation about our ongoing conservation efforts.

There's two two big state efforts.

One is the non-functional turf ban, and we have partnered with uh uh with uh uh the California water efficiency uh partnership, CalWEP, to bring uh non-functional turf education materials to the Bosca member agencies, and I think uh uh San Francisco is most likely a member of CalWEP as well, would have access to that.

And there's a phased implementation of uh a ban on non-functional turf depending on the type of customer.

So starts with government agencies and I think moves to businesses later on with different deadlines uh after that.

So we're working on our water agencies in Bosca, uh promoting non-functional turf uh reduction, and that will of course save uh save water in the service area.

Uh the second is the California conservation program uh making uh conservation a California way of life, and we have partnered with Valley Water, um, so that all the Bosca agencies, some of which are uh co-members of uh Valley Water as well as SFPUC in terms of buying wholesale water.

Um we've partnered with them to hold 12 workshops on the new California conservation regulation.

So we're really excited about these programs.

It goes along with our continuing efforts to educate on conservation and uh continue to promote conservation throughout the service area.

So that's the end of my report.

Uh, happy to take any questions if anyone has any.

Thank you, Mr.

Smeagle.

Vice President Leveroni.

Thank you, Graham.

Thank you very much for your report.

Um just um a little clarification.

I wasn't clear.

On the um turf, is it a turf ban, non-functional turf ban?

If you can make it.

Sure.

So so there's been state legislation that requires if if turf so grass is not being used for active play or other activities, sports fields and the like.

If it's just part of a landscape plan where it's around trees and it's not being used, or for picnicking or whatever.

I mean, there's a lot of reasons to have good reasons to have turf, but if you have turf in areas on say uh a median strip, like the parking strip in between the sidewalk and the street, um this uh this legislation has a phased approach to try to get rid of that turf, and that's because turf uh takes a lot of irrigation water and other plants might be uh uh more conservation sensitive.

Okay.

And and just to follow up, and have there been, I'm just curious because I'm trying to do a little more research on the turf and non-TERF.

Is have there been studies on the turf that you were able that you might have available to that are showing, you know, um that they it may not be safe, not lawn, but the artificial.

Oh, Bosca does have a working paper I could send to you uh on uh on artificial turf.

Yes.

Um there's uh a number of agencies that have bans on this.

There are a number of other agencies that are promoting it, so it's kind of a double double-edged.

We do have uh you know, short policy uh paper, kind of one pager on it.

Uh I'd be happy to send it to the commission.

Thank you very much.

I appreciate that.

Thank you, Vice President Laborone.

The commissioners um I just wanted to comment on uh on a thank you because I think having had the chance to go to a Bosca meeting and and seeing you and hearing from the different agency constituents was really helpful to gain insight into the great work that you and your team do on behalf of two-thirds of the ratepayers within the water portfolio.

So thank you.

And I also um not to go back to a previous item, but just in providing feedback is really helpful as I really keep a laser focus on going into rate conversations, hearing your perspective on the trade-offs, and in particular where the decisions we'll be making around capital investments and expenditures.

Your hearing your opinion, I think it's really important.

Uh you know, the general manager, I really appreciate that he's um he's heard me and all of us you know know how important it is to us that it is as it is to him and and the team to have this conversation around rates.

We're all in this together, and I think you providing that feedback and as we get more and more deeper into the conversations, feedback from you, which is feedback from your constituents and other stakeholders, is going to be really key so that we kind of approach the finality and making those decisions and the impacts those are going to have that it's done as a as a collective, which is with as much input as possible.

So just thank you for for jumping in in these different important topics.

So thanks for everything you're thank you, all right.

Public comment, Ms.

Lanier.

Remote college, please raise your hand if you wish to provide comment on item six.

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

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

Miss Lonera, there are no callers with their hats raised.

Thank you.

Item seven, consent calendar.

Ms.

Lier, I'm gonna hand the gavel to vice president Leveronian and I'll be right back.

That's a scary thought.

Okay.

To please proceed to the next item.

So we're on item seven, the consent calendar.

Would you like to ask the commission if they have to Are there any comment on the uh consent calendar?

Seeing none.

Um, is there uh open to public comment?

Absolutely.

Remote college, please raise your hand if you wish to provide comment on item seven.

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

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

Miss Lanera, there are no callers with their hands raised.

Thank you.

If I can request a motion to on the consent calendar, motion to approve consent calendar, second, second, President Arcee.

Vice President Leveroni.

Aye.

Commissioner Jamdar, aye.

Commissioner Stacey?

Aye.

Commissioner Thurlow.

Aye.

Item seven passes.

Item eight.

Approve the terms and conditions and authorize the general manager to execute a purchase and sale agreement and associated exhibits for the acquisition of an approximately 41.14 acre property located at 10115 Moccasin Switchback Road in the unincorporated town of Moccasin in Tualamy County.

Uh great, thank you.

Um Vice President Lebroni and additional uh commissioners.

Uh, good afternoon.

My name is Josh Keene.

I'm the assistant real estate director of the SFPUC.

Um, so this is going to be very brief presentation regarding a proposed acquisition of approximately 40 acres of real property in Tualamy County.

Specifically, the property is adjacent to the SFPUC's sizable property interests in the town of Moccason, which is included in a map with the agenda item itself.

Um, as some of you may be aware, the SFPUC has long been interested in potentially acquiring this property, but it was never available for sale until actually earlier this year.

The property has historically been identified, mostly due to its proximity to existing SFPUC property uh as a strategic land acquisition by the SFPUC.

Uh, but that is not to discount the fact there are immediate benefits as well.

Through a series of existing easements, the SFPUC has existing infrastructure for water conveyance system and power transmission lines.

This would make access to those for repairs or maintenance instantaneously easier as far as it goes when we own all of the property associated with it.

The SFPUC also owns fee property embedded within the acquisition site, an additional fee property to the Northwest, creating direct access off Moccasin switchback road that does not exist now.

Through this acquisition, the SFPUC would immediately realize those maintenance benefits with the existing facilities and the ink the easements that they're currently under would extinguish and basically be fee owned property.

The property offers innumerable opportunities to improve access to and across the property through its adjacencies to the SFPC property.

This could serve as additional emergency egress pathways to major roads during future fires or other concerns as well.

On the real estate side, the proposed transaction consists of a negotiated purchase price of $525,000.

SFPUC staff has determined that the value to the SFPC is well in excess of that when combining the appraised value and the assemblage value I implied earlier.

And overall, we feel this is a great deal for the SFPUC.

On technical levels, a phase one environmental report was obtained to check for the condition of hazardous materials or any other concerns, and no adverse conditions were noted.

So which we would call that's a clean report for an acquisition.

The environmental review by the SFPUC determined that this acquisition is exempt from CEQA.

And from a timing side, if this commission authorizes this resolution, our expectation, just like the negotiation on this, is to move quickly to acquire the property within this calendar year.

Please let me know if you have any questions and welcome back, President Arce.

All right, Commission colleagues.

One thing you all got to know about Mr.

Keene having been around the block myself a little bit, he's literally one of the best we've got in town when he's presenting something he's really done his homework, as I've seen for about 10 15 years now.

Questions?

Commissioner Stacey.

I just really had a similar comment.

One look at the map at the very end of the item that was in our packet shows, you know, what an important acquisition it is.

And um the price seems reasonable, and I it could have gotten more hung up than it was, and I I think that it's a really uh it's a it's a good and an important acquisition.

So thanks for the work.

Great.

Thank you.

Thank you, Commissioner Sacy.

Uh, another questions, colleagues.

Feel very confident this is uh a great deal for the agency and the ratepayers and stakeholders.

So thank you, Mr.

Keene.

Can we have public comment before we take a motion?

Ms.

Lanier?

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 callers who have their hand raised?

Ms.

Lanier, there are no callers with their hands raised.

Thank you.

All right, colleagues can get a motion to approve this item.

Motion to approve.

Motion from Vice President Leveronians or a second.

Second.

Commissioner Sacey.

Can we have a roll call, Tiffany?

President Arce?

Aye.

Vice President Leveroni.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacey?

Aye.

Commissioner Thurlow?

Aye.

Item eight passes.

Thank you, Ms.

Lanier.

Thank you, Mr.

Keene.

Thank you.

Thanks for the words.

Item nine.

Approve the form of installment sale agreement for a drinking water state revolving fund loan for the Sonol Valley Water Treatment Plant Ozenation Project in an amount not to exceed $54 million and authorize the general manager to execute any other necessary agreements to complete the transaction.

Hi, good afternoon, Commissioners.

May I have the slides, please?

Oh, Steve.

And now, may I have the slides, please?

Thank you.

Commissioners, I'm Alexandra Gannell and the loans and grants director serving under Nancy Home in Business Services.

The item before you today is a request for you to approve the form of the installment sale agreement with the uh for drinking water state revolving fund loan for the Synol Ozone project for an amount not to exceed $54 million, and to authorize the general manager to execute agreements necessary to complete the transaction.

I'm going to be really brief and just give you a high-level overview of the SRF program, talk about just general terms of the loan, and then I'll take any questions that you have.

So the State Revolving Fund Program is a US CPA program, but in California it's administered by the State Water Resources Control Board.

So each of the 50 states get their federal funds every year, and each of the 50 states has an administration administering body, and in California, that's the State Water Resource Control Board.

This SRF program has a drinking water and a clean water SRF, so they provide low cost financing for drinking water and clean water or wastewater projects.

The interest rate is set at one half of the GO bond rate.

And grant and principal forgiveness are occasionally available, though not for this particular loan at this time.

So SFPC has a long history with the SRF program in California.

We currently have two water enterprise loans.

One is the Westside Recycled Water Project, and the other one is the Mountain Tunnel Improvements Project.

The West Side Recycled Water Project has a grant component.

It has a 176 million dollar loan plus a 1% at 1% interest rate and a $15 million grant on top of that.

And that was executed at the time back in 2017 at the time to cover the full cost of the project.

Mountain Tunnel similarly executed in 2022 to cover the full cost of the project, no grant component on that one, just a 238 million dollar loan at 1.1%.

As I said, we have many SRF loans, more on the wastewater side.

There are nine executed financing agreements.

They total $570 million.

Some of those are partial financing.

Some of those cover the complete costs of the project or were intended to at the time when they were executed.

Some of them have grant components as well.

So this particular loan is a partial loan.

And so they've capped the total amount of funding for large projects at $50 million.

And so we are getting the maximum amount that we can per project.

The project itself, I think, is estimated around $326 million.

And so the water enterprise capital improvement program will cover the remaining portion of the cost of the project.

If that becomes available, as I mentioned, the interest rate is anticipated to be 1.9%.

It's a 30-year repayment term.

It starts one year after construction completion.

It is going to be paid out of the net revenues of the water enterprise, and it is on the same lien level as our other two water enterprise SRF loans, which is the senior lien level, as well as the revenue bonds.

Loan administration, I won't go through all the loan administration requirements, but what I will mention is that as I said before, these are federal funds.

Even though they're administered by the state, they are passed down to the state, and then the state passes them along to the bar individual borrowers.

So federal requirements come along with these funds.

And those could be anything from the environmental requirements, the environmental crosscutters, the contracting requirements, it could be around labor, the domestic preference requirements on materials, and there's regular progress reporting that's required.

There's noticing that's required.

We have worked across the organization, infrastructure, finance, accounting, and everyone to ensure that we have processes in place to be compliant with those requirements.

Last thing I'll just note is this is a reimbursement loan.

So we incur the costs, we provide expenditure documentation to the state, then they reimburse us once we've made those expenditures.

And SB 450 requires that we uh provide a good faith estimate with issuance of debt, and so it is prepared by our capital finance team, and it is here, and it's also in your packet.

So thank you for your consideration of this item.

Uh, happy to take any questions that you may have.

Thank you.

Great presentation.

Vice President Leverone.

Thank you.

Um, uh I think the loan grant is a loan is approved and in in place, and that would we, and there's a large balance above the 52 million.

Am I understanding that correctly?

Yes, so the way that it works is right now, first you as our uh governing body approve and authorize the general manager to execute based on the form of the loan agreement that has been negotiated by our legal council, and then we receive the agreement, it gets executed, and then at that time we would then start submitting reimbursements to the state for costs incurred, and then in terms of the remaining costs of the project, those are just part of the financial plan and the regular issuance of debt that goes with the water enterprise capital plan.

Okay, all right.

So okay, so is it is something that the when we submit the money is at the state that would reimburse us.

It's not something that we're at a stage where uh we get it approved here, but we wouldn't get money from the state possibly.

Is that is that a I see what you're where you're going.

So the way that the um that um California's program works is that they do just like all the other 50 states are going to get their money every year from the federal government in the president's budget.

So that's called the capitalization grant.

It comes every year, and then um states can either take that money and loan out that out directly, or they can take that money and they can invest it and they can issue revenue bonds, and then they can use those revenue bond proceeds to then provide financing to borrowers, and so that's called a leverage program, and California's program is a leveraged program.

So the the funds that we're receiving are the funds that are rotating through their program from a variety of sources, and so in terms of the money that comes in today for them from the capitalization grants, those are not that's not the money that they are loaning out directly for this loan.

This loan was selected in last year's intended use plan based on the funds that they have projected that they have available based on their investments.

So the funds are going to be encumbered when we execute the loan with them, they are available for the state.

And and would it be that we have to start this year or if if it went into 26, is that an issue at all as far as the usage of these funds?

Thank you.

No, it's not an issue.

Yeah, and the project is as uh as Steve said, the project is well under construction.

So we are accumulating expenditures that are eligible, the state has funds that they have um intended to provide for this project in their current intended use plan, no matter what happens in 2026.

Thank you.

Commissioner Stacy.

Uh thank you.

I am wondering if you can explain in the packet.

It the the staff report says it's a $50 million loan, but the approval is for up to $54 million.

What's that?

What accounts for that discrepancy?

Interest cost.

So the approval is not to exceed, including the cost of the interest that we'll accumulate, okay.

And that we will need to repay, that is the total amount of debt that we are forecasting.

Thank you.

I also, you know, when I started reading the staff report, I thought, wow, seems great.

Why would we ever say no to you know a loan that's so much lower a rate?

But then as I continued to read through your staff report, there are elements to this that can drive up costs to some extent.

So I am guessing that it's, you know, once again sort of a balancing act because it's a reimbursement, PUC is going to have to finance it, and then I assume you can use the loan money to uh pay back whatever form of financing you needed up front to pay, and then maybe buying American or buying domestically can also be more expensive at times, not always.

And the interest payments begin immediately.

So as soon as we draw the funds, we've we start paying back the interest on that.

Is that right?

But it's it still sounds like the interest rate is so much lower that it's a valuable tool in the sort of finance toolbox.

Yes, I there are multiple considerations when we evaluate projects in the CIP for what's going to be a cost effective um option under the SRF program or any of our other loan or grant programs.

There's no such thing as free money, even if it's a grant.

So yes, um, we we do have to weigh all of those um additional um costs and administration that may come with these funds.

Thank you.

Sure.

Commissioner Thurlow.

Thanks, President Arce, and thank you so much for the presentation.

I'm curious about um what happens in the case of construction delays, um, and our prior experience with reimbursable funds like this if if there are hiccups in the project that make things take longer or change.

Um, so many of these, I would imagine we have some experience.

And do you anticipate that to be any different for this project given the current funding environment?

Does that make sense?

Yes, okay.

And so the state revolving fund, they are very uh used to having projects and and borrowers where delays or cost overruns occur.

It's not a unique thing.

And so when that occurs, they do have mechanisms for us to adjust the terms of our loan.

It could sometimes be needed, a formal amendment might be needed, or just um a notice to them and they'll um they can accommodate it.

And as we think about the financial planning side of this, it's just a longer period during which we're paying interest before we can get reimbursed.

Is that a way to think about it or no?

No, not necessarily.

I mean, as Steve was just saying, this project is already under construction.

So it is very possible, depending on how much uh how much costs we've incurred by the time that we execute, that we could likely draw right away the entire amount of the loan.

Um that's great.

Yeah, I mean, for the larger projects like Mountain Tunnel, that's it takes longer to draw on that loan, obviously, because it's a larger loan, but at 50 million, it is possible.

And and of course, all this is done in conjunction with the capital financing team and determining what is the optimal source of financing based on the different opportunities within their portfolio.

But if it is an optimal time to draw, and we have it expenditures incurred, we would.

Great.

Thank you so much.

Sure.

Vice President Leveroni.

One more time.

Thank you very much.

Thank you, President Orsi.

Um the repayment doesn't start until after the project is completed, or is there interest payments made during that?

And then principal and interest payments after.

I was just not clear on that.

Yes.

So it's interesting.

Uh there are a few differences between the clean water and the drinking water.

And on the drinking water side, you do have to make interest payments prior to completion of construction, whereas on the and this is a drinking water SRF loan versus our clean water SRF loans, where you do not start paying repayment of principal and interest until after one year of um after substantial completion.

But interest payments are to be made prior to substantial completion for a drinking water loan.

Thank you.

Sure.

Commissioner Jamdar.

Thank you, President Darcy.

And thank you for the presentation.

I have a general question about the federal requirements.

How do we plan for that just across projects?

Is that something we already do?

Davis Vicon, I imagine, but Buy America, Build America, and some of the other uh sort of federal requirements.

Is that something we already sort of comply with?

And so when this sounds like obviously a great uh sort of financing mechanism to bring in.

Is that fairly uh sort of across the board that we follow those federal sort of requirements just in case funding like this becomes available?

So no, not across the board.

So it's important that we work closely with infrastructure and with finance teams and with the enterprises to understand what projects they have that are coming up that will be good candidates for different sources of financing and the requirements that might be associated with that financing because oftentimes we do have to make a decision whether we're going to make an investment into complying with those cross cutters before we have an agreement executed because we're already going to have to go out to bid, we're already in design, we're going to have to look into what whether those materials are going to be available from a domestic source.

And so all of that is done much earlier prior to seeking even submitting an application.

Conversations are had with funding partners well in advance about the potential for candidate projects.

So all this planning happens and implementation happens in the development of the project.

Yeah.

Under the leadership of our executive team who decides when a project should be deemed a candidate project based on evaluation of the potential of getting funding.

Thank you.

I was just wondering in light of the points that Commissioner Stacy made about some of the conditions of the loan, potentially impacting costs.

Generally speaking, does this revolving fund loan program generally provide a uh kind of lower cost funding solution for us when compared to other more traditional funding?

So one half of the uh geo bond rate, it does model favorably compared to the interest rate that we model for our revenue bond uh tax exempt revenue bond financing.

Um the state will tell you that generally what they say as a grant equivalent and what they publish and their intended use plan is that for every hundred million dollar loan, you could equate it to a 20 million dollar grant.

That's their very rough borrower estimate.

So then, in this instance and every other situation where we can access this form of capital to invest, that results in decreased capital costs and therefore potentially ratepayer savings in the long run.

That is the goal.

I mean, the reason I ask is just because being obsessed with what are our trade-offs and what are our options around the the rates?

You know, the state being a state that probably looks for opportunities to have programs like this when the when the funds are available, and uh, you know, state leaders that that care and want to help invest creates opportunities at the state level and maybe even the federal level.

I don't know, I guess that's my question.

In this federal administration, or maybe more likely past federal administrations, do we see similar programs where we have access to a fund like this or evolving loan fund with a lower cost of capital that helps us to get the work done and maybe develop some increased savings for the ratepayers?

Yes, we do.

We have federal loans.

We have our water Infrastructure finance and innovation act loans or WIFIA loans directly from the US CPA.

We're very active in that program.

We are one of their largest borrowers as on the wastewater side.

Um there are other new programs that are coming uh forth that we are applying for from the Army Corps of Engineers.

Um we are very active with the state in um supporting their uh needs to continue to grow and develop their program through all the work that our external affairs team does to advocate for these programs.

Well, I think in light of what AGM Ritchie said earlier that these considerations around rates and affordability are not unique to us, but they're being experienced by agencies up and down the state.

We would like to think that our state and federal leaders who have the authority over larger geographies will put skin in the game with us when they have the ability to create increased sources of funding like this so that we can continue to draw upon, draw upon them to do what you're doing here, which is deliver great value to the ratepayers and get work done that needs to get done.

So thank you.

Thank you.

Alright.

Unless there's any other comments, Ms.

Lanier, can we turn to public comment?

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

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 with the hands raised.

Thank you.

Thank you, Ms.

Lanier.

And can we get colleagues uh motion to approve item nine?

Move to approve item nine.

Motion by Commissioner Stacy.

There are second.

Second.

Vice President Leverone, roll call, please, Ms.

Lanier.

President Arce.

Aye.

Vice President Leverone.

Aye.

Commissioner Jamzar.

Hi.

Commissioner Stacy.

Aye.

Commissioner Thurlow.

Aye.

The item passes.

Item 10.

Approve the forms of one revolving credit and term loan agreement with the BMO bank in the aggregate principal amount not to exceed 150 million.

Two BMO fee agreement.

Three, form of issuing and paying agent agreement, four, form of amendment to the dealer agreement in support of the wastewater interim funding program, and five form of the offering memorandum.

Good afternoon, President Arcee, Vice President Leveroni, Commissioners.

This is a nice piggyback to the last discussion you just had as we talk about the different ways that we save money for ratepayers.

But before I begin, our environmental compliance and city attorney teams have asked me to just read a brief note for the record about a non-substantive change that staff is proposing for this item.

The change would clarify the proposition E certificate process and the California Environmental Quality Act sequence status of the projects to be funded through this credit facility agreement by adding the same details into the resolution that are provided in the staff report.

The director of commission affairs has distributed the updated staff report and the real solution to the commission and public copies are available here today.

So if I could have the slides, please.

As we do periodically each year, we come back to you frequently for credit facilities for our interim funding program.

And this is uh the newest of those.

As you know, our interim funding program is designed so that we can delay when we issue our bonds to save ratepayer funds.

We first use this program to be able to release funds that are put on the controller's reserve after you have for you and the board of supervisors have approved those uh costs as part of the budget.

And so rather than issuing bonds early, we can leverage these credit facilities that we acquire at a much lower cost than issuing uh bonds.

In addition, as projects begin to spend money, for example, for the projects that will ultimately be funded in part by the SRF, these uh facilities can then be used for our commercial paper program, and we can borrow small amounts as we need them and then take those out with larger bond transactions.

And all of these are designed to lower the cost for our ratepayers.

As you may recall, our interim funding program was previously authorized for wastewater at $750 million.

We went to the Board of Supervisors following your approval to expand that capacity, $950 million across all three enterprises, $500 million of that for wastewater.

We already acquired the facilities for power and water, and this will be our first leveraging of that new authorization for wastewater.

These facility that we will bring to you today will be used to release uh funds on controllers reserve uh later this year, this calendar year.

So as you can see, we have a diverse group of banks already with providing us different forms of credit facilities.

We went through a solicitation process with our municipal advisors at Baxter McCarley Berry, not only for this facility, but for some additional facilities that we will be returning to you in January for those approval.

In fact, our bids were so strong for credit facilities that we've taken advantage of the opportunity to accelerate some of our renewals for this coming spring.

We've had very advantageous pricing and candidly that is because we are issuing a lot of bonds and financial firms uh want to be part of our program.

Um we do that solicitation through a pool that is maintained by the airport that that becomes the city's uh pool, and then we issue a mini RFP through that pool.

I'm very excited to be able to share with you that out of this process, we've selected BMO Bank, which is a new bank to our program that offers us uh diversity in our program so that when investors buy our commercial paper, they are diversifying across multiple banks.

Certain banks in the market place issue a lot of credit facilities, and then the investors become full on those credit facilities.

This will be a three-year facility and it will cost us 31 basis points, that's 0.31 percent.

And again, back to the advantage of this program, we can fund those controller uh reserve releases based on uh demonstrating that we have these credit facilities for which we're paying 0.3 uh one basis points, uh rather than issuing long-term bonds and uh incurring much higher interest costs.

Excuse me.

While we have the ability under the proposed documents to extend these facilities for up to nine years, it has been our typical practice to re-RFP at each renewal and take advantage of the very aggressive pricing that we see.

But should uh market conditions change, we do have that uh capability.

Again, we only pay for the uh fees for the credit facility, we don't pay for interest until we actually uh issue uh commercial paper.

Uh you should be aware that should our rating ever be downgraded, the wastewater rating of the SFPUC, our pricing uh would increase uh based on a schedule in the RFP.

But based on current pricing, we in fact just had a conversation with one of our dealers today on another roll.

Uh we're seeing interest rates on commercial paper of about uh 255 to 260, depending on the number of months we go out.

You add 0.31 plus the dealer fees, and are all-in costs for commercial paper is less than 3 percent.

So it becomes a very efficient tool for our borrowing.

So our recommended action today is uh a full package of documents for this, including the form of the revolving credit and term loan agreement, the form of the fee agreement with BMO bank, the issuing and paying agent uh form of agreement, uh amendments to the dealer agreement, and then the offering memorandum that is used to market uh the paper to investors, and with that I'm happy to answer any questions.

Right.

Thank you, Mr.

Sklarov.

Questions?

Vice President Leveroni.

Um let me just understand, we um we were previously authorized for $750 million.

Yes.

And then were there another $500 million added to the $750?

Yes, so a million to a billion two fifty?

So the Commission approved that $500 million uh to advance that to the Board of Supervisors.

The Board of Supervisors uh approved it, and the mayor signed it just shortly before Christmas last year.

Okay.

Uh and we've we've leveraged that the expansion of capacity for the other two utilities, and this is our first opportunity to use it for wastewater.

Okay.

And so then we're going to add $150 million to that, so we'd be at about one, was that one four?

Right.

And so we we will expand with this facility, and then we intend to come back to you in January for some additional uh facilities as well.

And the impact of acquiring these facilities now is going to allow us to defer when we issue bonds for wastewater.

Right now, the 10-year plan that you saw in February calls for bonds to be issued this fiscal year.

This will allow us to defer that borrowing even further out.

Okay.

And I will comment your point three one.

Um you did an excellent job in negotiating on that one.

Uh that's uh an excellent rate.

The um and it's uh um a mix of a revolving credit and term, so when we draw down, does it then move to a term situation uh until we take it out with possible bonds?

So this this facility is in place, and we we can point to that to for the controller immediately as being available for uh the purposes of uh releasing appropriations from reserve.

But the that facility will be used for issuing and backing the commercial paper that we issue against that, um, and then under those documents should, for example, the paper not be able to roll in the marketplace due to a market event, then then there are provisions for terming it out.

I know the timing is always a difficult situation, but you did an excellent job on your last issuance when you went out to the bond market to replace some of the debt with the bonds and and uh we're able to save a considerable amount of money.

And uh hopefully we'll be able to do the same again when you know, always difficult to time the market, but you seem to this last time do an excellent job.

And the nice thing about this commercial paper is that we can choose the term, and it's always up to 270 days.

Typically we go out into the market for about 30 to 60 days, depending on what's happening with interest rates.

Okay.

And um there's a a catch-all on our bond rating uh that has an in in flux on the rate that we would be paying BMO.

What is it are you able to say what the range could be from point three to up words of?

Um I it is it is a schedule in in the uh uh memo, but it's it's by each rating notch that our rating would go down, it's a slight adjustment in the fee.

In other words, they have priced their facility, assuming our current ratings, but if our ratings go down, then they're taking potentially more exposure.

Okay.

Thank you.

Thank you, Vice President Leverone.

Any other questions or comments?

Well, thank you, Mr.

Sklar, for the work you do, because um it's almost like in like in a game of football, it can be, you know, short yardage gains, but incrementally they all add up to big savings for the ratepayers when you're able to reduce, like Vice President Leveroni said, go out there and get great interest rates.

So appreciate the work that you and your team do.

Thank you very much, President.

All right.

Thank you, Ms.

Lanier.

Can we take public comment?

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

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

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

Ms.

Lenar, there are no callers in the queue.

Thank you.

All right, colleagues, can we get a motion to approve item 10?

Motion to approve.

From Vice President Leveroni.

Uh, could could we be clear that the motion that or the resolution that we're moving to approve is the corrected one that staff submitted to us today?

Great call.

Um Deputy City Attorney Brigman, do we need to make an amendment to conform what's in front of us to the clarified language?

Okay.

So to clarify the motion made by Vice President Leveroni is to approve the resolution as it exists in our packet, which includes the clarifying language.

Can we get a second from Commissioner Stacy?

Roll call, please, Ms.

Lanier.

President Arce.

Aye.

Vice President Leverone.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacey?

Aye.

Commissioner Thurlow?

Aye.

Item 10 passes.

Item 11.

Approve amendment number one to contract number PRO.0138B Engineering Services for Dams and Reservoirs with GE Consultants Incorporated.

Thank you.

May I have the slides, please?

Okay.

Good afternoon, Commissioners.

My name is Tedman Lee.

I'm civil design division manager with the SFPUC's Engineering Management Bureau.

So I'm here this afternoon to request approval for amendment one to contract Pro 0138B engineering services for dams and reservoirs.

So a little bit of background.

After the Oroville Dam spillway failure in February of 2017, the California Division of Safety of Dams, D SOD, sent orders to all the dam owners in the state of California to conduct condition assessments of their spillways that are under DSOD jurisdiction.

So in response to that, we advertise contracts Pro 0138A, B, and C in late 2019 for all of the dams and reservoirs from Hedgehogie all the way down to the city.

So PRO 138B covers the dams in the Hetchy region, Cherry Dam, Elinor Dam, and Early Intake Dam.

Also shown on this map are Moccuson Dam and O'Shaughnessy Dam, which are covered under PRO 138A.

So we have our local dams, PRO 138C, which covers San Andreas, Pilar Citos, and Turner, which are not shown on this map.

So the Pro 138A design consultant for Moccason Dam and O'Shaughnessy Dam is HDR Inc.

They have a potential conflict of interest now for continuing design services due to their lead role as part of the HDR Stantec joint venture in Pro 205 water Capital Program Management Contract.

So therefore, we are recommending that the Moccasin Dam and O'Shaughnessy Dam scopes be completed by the Pro 138B consultant, GEI consultants, since the work falls within the same geographic footprint and is similar in nature as work scope in PRO 138B.

So at the time of PRO 138B advertisement, the capital plan for the projects shown on the left is a mix of 138B and 138A now.

Had a budget of 213.1 million dollars primarily for assessments.

And as DOD as DSOD analyzed and repaired Oroville, they imposed additional restrictions and requirements and analysis on the dam owners in the years that followed.

So we've since completed these need assessments for several of these facilities, and these assessments have helped us better define our project scopes.

So in the latest capital plan, we have significantly increased this budget to 626.7 million to reflect updated needs.

Kind of a XL table here.

This slide shows the projects in 138B and the left, the current phase of each project, the current plan budget, and our proposed amendment one modifications.

The original contract is an 11 million, 11-year pool type contract where we list a selection of predetermined projects that this contract will support.

And you can see that on the left.

Amendment one on the right side asks for an additional seven million dollars with no additional time to continue engineering design for Moccasin Dam.

And we plan to fund the planning and design of O'Shaughnessy Dam through the Pro 138B unassigned balance.

So we have a 4.7 odd million.

I can't see it.

3.

And so we're going to use 2 million of that to fund the O'Shaughnessy planning and design.

So now I'll kind of go over some of the dams, the two dams, Moccasin and O'Shaughnessy, and show you more specifics.

In 2018, a storm event nearly overtopped Moccasin Lower Dam and caused significant damage.

You can see the floodwaters in the main spillway, which is sort of in the middle there, and the auxiliary spillway, which is on the top of the picture.

The floodwaters came within one foot of overtopping this dam.

As part of the planning work for this project, we determined that the best solution would be a new side channel auxiliary spillway, lining the spillway chute and building a new stilling basin for energy dissipation.

This photo shows the physical model that was built by Northwest Hydraulic Consultants in Vancouver, British Columbia, British Columbia, which was used to verify our hydraulic modeling results.

This project is currently at the 35% design phase, taken there with H or by HDR through Pro 138A.

O'Shaughnessy Dam and Outlet Works Phase 2.

We're in the planning phase for both the drum gates and the slide gates sub-projects.

This photo shows the drum gates in the up position.

They can be lowered if we want to discharge water from the reservoir into the spillway.

For the isolation butterfly valve and needle valves, this work has not yet started.

This photo shows a 1922 drawing of the general arrangement of the O'Shaughnessy Dam system where the needle valves regulate the flow being released from the dam.

And back to the spreadsheet.

So beyond this amendment, as these projects continue to develop, we anticipate that we will need to find other means for contracting capacity to do this work.

And we could be using as needed consultants, or we could be issuing new RFPs, or we could perhaps come back for another amendment on Pro 138B.

So from a funding perspective, as these projects move through condition assessment into planning to design, we update the scopes and we update the budgets, and that's taken into consideration in the 10-year capital planning process.

Alright, so that concludes my presentation.

Happy to answer any questions.

Okay, thank you.

Thank you, Mr.

Lee.

Question from Vice President Leverone.

Thank you very much.

Thank you.

I was getting a little confused just myself.

A, B, and C, we had different contracts.

Correct.

And here we're asking for an increase of $7 million, which I think I understand, which I do understand.

Was there anything in the other contracts that would have allowed for that $7 million not to be as such a large increase since we're changing we're because of the conflict of interest?

Were there any funds that would be able to be moved over from A or C?

So contract A, we want to remove the scope from contract A, the description of the scope.

But in terms of the capacity, the contract just allows us to spend $7 million or the capacity, $11 million worth of capacity.

But we did not intend to reduce the capacity for A, we just plan to move the project scope over.

The capa I mean the funding, the $11 million allows us to spend the eleven million dollars, but the actual money is funded through the project charge codes.

Okay, so so but each contract had its had its own design budget.

Is that am I?

Uh yes.

So it's 11 million dollars for contract A, eleven million for B.

So I think your question is because we're adding seven million dollars to B, are we subtracting seven million dollars from A?

Thank you.

Right?

Um so the answer is um no.

We're re we're reducing the scope of A, but leaving the capacity alone.

Okay.

Because those dollars are needed or have been spent.

Uh there.

Well, with HDR, we're not having them do any more design work, so we would not be using that capacity through new task orders or through new design task orders.

We perhaps could use them for planning level work because that that's allowed.

Thank you.

All right, Commissioner Stacey.

I I had the same question that Vice President Leverone had.

What I so I want to make sure I understand.

There is still going to be this PRO.0138A contract with Moccasin Dam and O'Shaughnessy Dam still within that contract, but for different work other than planning and design work.

Is that what you just said?

No.

Uh we're removing all of Moccasin Dam and O'Shaughnessy Dam scopes from Pro 138A.

There is um there's an in-stream flow release project that is just finishing up as performed by HDR.

Uh that's the construction is pretty much done.

We're waiting for like as built drawings.

So there's still some cleanup work for HDR to perform under 138A.

It's just this design work for Moccasin and this future planning and design work for O'Shaughnessy that we would like to move that scope to 138B.

And in moving that scope, you're not moving the any funding with it.

You're asking for an additional seven million dollars for Moccasin Dam.

I'm asking for, yeah, um, we're asking for seven million dollars of additional capacity.

So the permission to spend seven million for these projects.

The actual dollars would come from the projects, the project codes and budget.

I see.

Oh, I'm sorry.

Thank you.

Hello, Commissioners.

Daniel Sanchez from the PSFEC's contract administration bureau.

Um I think what Tedman is trying to say is that the eleven million dollars in each contract is uh a max capacity that could be spent.

So we're not going to be touching the contract amount under A, but the scope will change, so they will no longer be touching that scope for Moccason Dam, but the we're not changing the amount because those are as needed contracts, and we don't need to spend uh spend that if if it's not used.

So I think that's what we're trying to say here.

We're gonna leave the uh amount of A untouched, but the scope will be removed.

And so we're we're adding the seven million to B that will be allocated to Moccasin Dam, and the two million that's going to be allocated to O'Shaughnessy, is already in the contract for B.

Is that the seven million?

I can understand that correctly.

If I'm understanding it correctly, the seven million for the uh moccasin dam is what we need because we the we don't have that uh capacity under B.

But I think you mentioned that for the O'Shaughnessy, we're gonna use some leftover uh untouched money that's already under the original 11 that was given to B.

That's what I thought.

I just wanted to confirm that I understood that correctly.

Thank you both.

Thank you, Commissioner Sacey.

Okay, Ms.

Lanier, can we take public comment?

Remote college, please raise your hand if you wish to provide comment on item 11.

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.

Thank you, Mr.

Lee, for the presentation.

Colleagues, can I get a motion to approve item 11?

Move to approve.

Motion by Commissioner Stacy.

Second.

Second from Commissioner Jamdar.

Can we get roll call, Ms.

Lanier?

President Arce.

Aye.

Vice President Leverone.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacey?

Aye.

Commissioner Thurlow?

Aye.

Item 11 passes.

Item 12, communications.

Any discussion on any of the communication items.

Thank you, Mr.

Lee.

No.

Okay, then can we hear the next item?

Item 13.

Items initiated by commissioners.

I have one, and it was because the I had the chance to catch up just before the meeting with the mayor's new director of the Department on the Status of Women.

And she indicated Dr.

Diana Oroce, and she indicated that she would love.

She would love the opportunity to partner with the PUC on a round table conversation about women's views on water access, and maybe even specifically some of the experiences of single mothers, working mothers around water and utilities and stuff.

I think she's looking for opportunities to partner, and I I said, sounds like a great idea.

She also commented on the fact that our commission is made up of six sixty percent women, and the policy, the department on the status of women has a goal to help advocate for at least fifty-one percent women on the city's commissions, and she took note of the fact that we're at 60 percent.

But it was just uh what I'm initiating is more forwarding and sharing an offer to partner from the new director of the commission on the department on status of women.

Alright, chat, thank you, GM Herrera.

That's all I got.

Can we hear the next item is Lanier?

The next item is adjournment.

Adjournment.

All right, we're adjourning at 3 44 p.m.

Thank you.

Thank you, everyone.