San Francisco Public Utilities Commission (SFPUC) Regular Meeting — December 9, 2025

The SFPUC Commission met with President Arce presiding (Commissioner Thurlow excused) and opened with a land acknowledgment recognizing Muwekma Ohlone stewardship and partnership with the SFPUC. The Commission approved prior minutes; heard extensive public comment—dominated by Millbrae concerns about proposed redevelopment affecting Outdoor Supply Hardware (OSH) and other businesses, plus comments on artificial turf/microplastics and worker safety/retaliation allegations; received multiple quarterly financial and capital updates; adopted new hydrant-use rules for temporary water supply; and approved several real estate and contract contingency actions. The meeting ended with a closed session and a reported settlement recommendation, then adjourned at 4:34 p.m.

Consent Calendar

• Approved unanimously (4-0) (Thurlow excused).

Public Comments & Testimony

• Millbrae campus / OSH and other businesses on SFPUC-owned land (El Camino Real)
  • Steven Reinaldi (Millbrae residents/ratepayers): Asserted the process was “deeply flawed,” citing an RFP starting in 2023 and Millbrae engagement only recently; opposed demolition of a “profitable business” and argued ratepayers should not subsidize new office space while losing jobs and local revenue; cited ~7%/year wholesale water rate increases for 5 years, claimed ~33% San Francisco office vacancy and ~20% peninsula vacancy, and stated the business provides 50 jobs.
  • Anne Schneider (former Millbrae mayor; BOSCA board member): Opposed removal of OSH and other businesses, emphasizing Millbrae’s limited commercial land and reliance on sales/property tax; stated Millbrae has the largest number of people in San Mateo County without cars; urged lease extensions and alternatives; invited commissioners to tour Millbrae.
  • Ken Smith (Millbrae resident) and Santana Thiamfrivet (Millbrae resident): Expressed opposition to losing OSH; urged alternative design (e.g., building up on SFPUC side) and asked for community inclusion.
  • Remote callers (Millbrae residents/representatives): Multiple speakers opposed loss of OSH and requested engagement and reconsideration; one caller described the project as $428 million, stating $16 million (4%) had been spent; several repeated the 50 jobs figure.
  • Gina Pappin (former Millbrae mayor): Stated the development process lacked transparency; referenced a letter from Assemblymember Diane Pappin; urged a “win-win” and argued the project is not too far along to change.
  • During BOSCA item (later in meeting):
    • Anne Schneider reiterated her position that there was “no communication.”
    • Councilmember Steven Reinaldi (Millbrae) stated he learned SFPUC anticipated “breaking ground in October 2026,” asked to scale back, and emphasized Millbrae is ~3.2 square miles with ~10% zoned commercial.
• Artificial turf and microplastics on SFPUC land at Crocker Amazon Park
  • Bob Hall: Opposed Rec Park proposal for “20 additional acres” of artificial turf; cited an “8- to 10-year lifespan,” microplastic shedding, and stated DTSC estimates 2,000–3,000 pounds of plastic blades shed per field per year; cited Coastal Commission statement of up to 300 million fibers annually from a single field; stated there are already “roughly 200,000 pounds” of plastic turf in place (context: speaker describing existing turf).
  • Susan Mullaney: Opposed adding turf; referenced SFPUC’s 2022 contaminants-of-emerging-concern drinking water report, stating Chapter 9 (micro/nanoplastics) documents risks; asserted groundwater in the Westside Basin is blended into drinking water and is exposed because “four Rec Park artificial turf fields drain into it,” stating each field is “40,000 pounds of microplastic” (as characterized by speaker).
• Workplace safety / retaliation allegations (public commenters)
  • Francisco DaCosta and Steve Zeltzer (United Front Committee for a Labor Party): Alleged inadequate transparency/accountability and described claims of retaliation against workers raising confined-space safety concerns; Zeltzer cited a separate city OSHA fine of $26,000 (as an analogy) and asserted SFPUC should investigate OSHA complaints.
• Agency governance/technical requests
  • Eileen Bogan (Coalition for San Francisco Neighborhoods): Urged the Mayor to transfer AWSS from SFPUC to the Fire Department; argued SFPUC is misstating “primary” vs “initial” water sources in a committee document.
  • Peter Drekmeyer (Yosemite Rivers Alliance): Requested a workshop on the Tuolumne River Voluntary Agreement scientific basis; stated a peer review found “major flaws” in a fish model; also requested better audio/teleconference quality.

Discussion Items

• Approval of Minutes (Nov. 10, 2025)

  • Approved 4-0 (Thurlow excused).

• General Manager Report — Quarterly Audit & Performance Review (Q1 ending Sept. 30)

  • Presented by Nancy Hom (CFO) on behalf of the Audit Director.
  • Reported 7 audits completed in Q1; 13 audits in progress (stated breakdown: 7 performance, 4 financial, plus 1 revenue leases and 1 revenue bonds); 5 audits upcoming in Q2.
  • Warehouse inventory spotlight: total variances about 1.5% of inventory units and under 0.5% of inventory value; noted industry high-performance accuracy benchmark of 97–99%.
  • Recognized a “never-before” 100% perfect count in the wastewater enterprise.
  • Stated inventory assets total $14 million (FY 2024–25 context).
  • As of Sept. 30: 16 open recommendations across 2 audits (remaining open pending follow-up schedules by external offices).

• Budget and Capital Plan Progress Update (ahead of January budget hearings; approval expected February)

  • Presented by Anna Doening (Budget Director).
  • Finance issued July instructions to limit operating growth and to reduce overall CIP—particularly water and wastewater—by nearly $1 billion.
  • Initial operating increases described as about 2.5% on a $2 billion operating budget (examples provided rather than full line items).
  • Initial 10-year capital proposals totaled nearly $16 billion, characterized as not financially sustainable; teams deferring projects, revisiting timelines, reducing scope, and reprioritizing.
  • Noted pressures: debt coming online (example: biosolids debt service next year), regulatory demands, legacy infrastructure, and high local construction costs.
  • President Arce emphasized Mayor Lurie’s stated top priority of affordability and encouraged broad stakeholder engagement and transparency on tradeoffs.
  • Commissioners asked about: mayoral budget instructions (to be shared), long-term planning horizon (moving toward 20–30 years beyond the 10-year plan), budgeting for emergency breaks/repairs, effects of deferrals on rates vs cost escalation, refinancing opportunities, and whether AI is used to predict main breaks (staff response: not currently).

• PUC Quarterly Budget Status Report (Q1 operating results)

  • Presented by Anna Doening.
  • Water & Wastewater: slight shortfalls attributed to lower volumes; water demand down due to “a much cooler summer than normal.”
  • Power & CleanPowerSF: reported positive operating results with savings driven by lower demand and lower power purchase costs; CleanPowerSF also cited reserve budgeting contributing to projected savings.
  • Stated all enterprises were meeting financial policy targets at the time of reporting.

• Water Enterprise CIP Quarterly Report & WSIP Quarterly Report (Q1 FY 2025–26)

  • Presented by Katie Miller (Director, Water Capital Programs).
  • Water enterprise CIP: 52 projects, combined budget $4.1 billion; about 38% spent to date; $162 million spent in the past two quarters.
  • Reported construction spending rising to $93 million in the past quarter (compared with $47 million per quarter average in the prior fiscal year).
  • Forecast cost increases of about $88 million over approved budgets at that time.
  • Project highlights:
    • Sunol Valley Water Treatment Plant Ozone Project: stated as $326 million budget; clarified a slide typo and reported $64 million spent; noted completion of critical tie-ins before a 100-day Hetch Hetchy shutdown starting “later this month.”
    • Southern Skyline Boulevard Ridge Trail Extension: about 93% complete; on track for completion “by this summer.”
    • Main replacement: referenced work supporting a seismic-reliable pipeline route to San Francisco General Hospital.
    • Lead component services: 1,365 galvanized services replaced over two years; 167 replaced in the past quarter.
  • WSIP: $3.8 billion total budget; stated 99% complete with $59 million unspent; 4 projects remaining (with 1 active in planning and 1 in construction).

• Wastewater Enterprise CIP Quarterly Report (SSIP Phase I)

  • Presented by Bessie Tam (Wastewater Capital Programs Director).
  • SSIP Phase I: $4.7 billion, advanced from 76% to 77% completion.
  • Noted cost variance drivers including incorporating biogas elements into the BDFP project and updated estimates for flood resilience projects.
  • Reported advertisement of the Southeast Plant Nutrient Project as a major effort to reduce nutrient impacts to Bay water quality.
  • Noted Headworks ribbon cutting in September 2025, transitioning into testing/closeout and operational turnover.

• Progressive Design-Build (PDB) Contracting Update

  • Presented by Steven Robinson (AGM, Infrastructure) and Jignesh Desai (Principal Project Manager).
  • Explained PDB phases (pre-construction and construction) and the four planned Commission actions: contract award, CEQA project approval/MMRP adoption, planned contract modifications (described as phased approvals, not typical change orders), and final closeout.
  • Discussion focused on cost control without an upfront fixed price; staff emphasized “design-to-budget,” risk allocation, schedule efficiencies via overlap, and the need for active owner involvement.

• BOSCA (Bay Area Water Supply and Conservation Agency) Report

  • BOSCA reported that the water supply agreement amendment approved earlier in April 2025 by SFPUC was approved by all 26 wholesale customers by December 2, 2025, making it effective.
  • The amendment addressed minimum purchase requirements for four South Bay agencies unable to meet minimums due to conservation: Milpitas, Alameda County Water District, Sunnyvale, and Mountain View.
  • BOSCA referenced receiving Assemblymember Pappin’s letter regarding Millbrae and encouraged continued communication.
  • SFPUC staff (AGM Steve Ritchie) stated he was scheduled to present to Millbrae City Council on January 13, 2026; clarified the referenced RFP was issued September 2024 for CM/GC construction and involved NDAs; stated SFPUC had met with Millbrae staff multiple times and was preparing a response to the Assemblymember.

• Public Hearing: New Rules and Regulations for Hydrant Use for Temporary Water Supply (Item 8)

  • Presented by Bill Tien (Division Manager, SF Water Division).
  • SFPUC stated it owns/operates all hydrants and cited 8,952 low-pressure hydrants in San Francisco.
  • Temporary hydrant permits described as revocable and for up to six months for construction, filmmaking, special events, and mobile sanitation.
  • Issues described: unmetered hookups, lack of backflow prevention, improper tools causing hydrant damage, and public safety hazards from hoses across sidewalks/intersections.
  • Commissioner Stacey asked about program scale: staff stated about 300 meters are out “at any one time.”

• Real Estate Agreements: Daly City Vista Grande Drainage Basin Improvement Project (Item 9)

  • Presented by Dina Brazil (Right-of-Way Manager).
  • Purpose: increase drainage capacity to reduce Daly City flooding and restore hydrology benefiting Lake Merced; includes wetland treatment, a larger tunnel, and infrastructure enabling controlled stormwater diversion into Lake Merced and an inlet pipeline to prevent lake overflow.
  • Commission authorized execution of multiple agreements (subject to Board of Supervisors approval): quitclaim of existing tunnel easements; conveyance of five new easements; a 50-year license for an SFPUC inlet pipeline; and an amendment to a mitigation-site license.
  • Noted mitigation license term extension by 5 years to “just over 10 years” total; agreements to be paid at fair market value based on MAI appraisal.
  • Environmental review referenced: EIR/EIS certified Dec. 2017; Daly City addendum adopted July 9, 2025.

• Real Estate Easements: Lower Alemany Area Stormwater Improvements (Items 10–12)

  • Presented by Dina Brazil.
  • Project includes ~6,350 linear feet of 10-foot diameter tunnel and ~1,000 feet of 13' x 7' box sewer; designed to manage stormwater for a 5-year, 3-hour storm level of service and to comply with a 2021 Regional Water Quality Control Board cleanup and abatement order related to sewer overflow threats.
  • Easements needed under three residential properties (installed >50 feet deep via trenchless method).
  • Negotiated purchases:
    • 499 Gavin: ~693.2 sq ft, $32,000
    • 495 Gavin: ~298.2 sq ft, $25,000
    • 491 Gavin: ~9.2 sq ft, $2,500
  • CEQA: categorical exemption determination March 25, 2025; Notice of Exemption filed Sept. 10, 2025 and posted Sept. 11, 2025.

• Contract Contingency Actions

  • Item 13: Sunol Long-Term Improvements — Alameda Creek Watershed Center (WD-2794B)
    • Requested: +$500,000 cost contingency and +910 calendar days duration contingency; construction started March 2020 and reported ~97% complete.
    • Remaining issues included exhibit installation corrections and addressing leaks/cracks (gutter cracks, aquarium/exhibit leakage) plus a two-year maintenance period beginning at substantial completion.
    • If approved, contract duration could extend to 3,033 calendar days, ending by June 2028.
  • Item 14: O’Shaughnessy Dam Drainage and Misc. Improvements (HH-1015)
    • Requested: +$1,000,000 cost contingency and +382 calendar days duration contingency.
    • Staff stated extensions were needed due to site conditions and to schedule work in late summer when spring runoff subsides and supply wells can be drained safely; revised contract cost limit stated as $6,814,550.

• Closed Session (Items 18–20)

  • Commission voted to assert attorney-client privilege for the closed session matter.
  • Upon return, the Commission announced it was recommending that the Board approve the settlement referenced in Item 18.
  • Commission then voted not to disclose closed session discussions.

Key Outcomes

• Minutes approved (Nov. 10, 2025): 4-0 (Thurlow excused).
• Consent Calendar approved: 4-0.
• Adopted new hydrant-use rules and related customer water-service rule amendments (Item 8): 4-0.
• Approved Daly City Vista Grande drainage basin improvement project real estate agreements (Item 9): 4-0.
• Approved three subsurface sewer tunnel easements for Lower Alemany project (Items 10, 11, 12): each 4-0.
• Approved contract contingency increases:
  • Alameda Creek Watershed Center (Item 13): 3-0 (President Arce stepped away for the vote; Thurlow excused).
  • O’Shaughnessy Dam improvements (Item 14): 3-0 (President Arce stepped away; Thurlow excused).
• Closed session actions:
  • Asserted attorney-client privilege (vote recorded as unanimous among present members).
  • Announced recommendation for Board approval of a settlement (Item 19).
  • Voted not to disclose closed session discussions (Item 20): 4-0.
• Next-step signals (no formal vote):
  • Staff stated SFPUC AGM Steve Ritchie was scheduled to present to Millbrae City Council on Jan. 13, 2026 regarding the Millbrae campus project; public commenters sought pause/scale-back and more engagement.
  • Commission confirmed intent to schedule informational presentations in 2026 on the Bay Delta Plan/Healthy Rivers and Landscapes topics (as raised under Items Initiated by Commissioners).