San Francisco Public Utilities Commission Meeting - February 10, 2026

The San Francisco Public Utilities Commission (SFPUC) met on February 10, 2026, beginning at 9:45 AM, with a quorum present (President Arce, Vice President Leveroni, Commissioners Stacey and Thurlow; Commissioner Jamdar excused). The meeting included a land acknowledgment, approval of prior minutes, general public comment, a report on audited financial statements, approval of consent calendar, and major actions on the biennial operating and capital budgets, 10-year capital and financial plans, a water supply assessment, and a contract award for nutrient reduction at the Southeast Water Pollution Control Plant.

Consent Calendar

• Item 7: Amendment number one to specified contracts for project scheduling and cost control staff augmentation services was approved unanimously (4-0-1 excused).

Public Comments & Testimony

• General Public Comment:
  • Francisco DaCosta criticized the commission for not taking the precautionary principle seriously and alleged that three employees were traumatized, vowing to take the matter to the inspector.
  • Demetrius Williams (President, San Francisco Hyperlocal Building Trades Contractors Collective) expressed support for SFPUC projects but demanded local contracts and community benefits for Bayview-Hunters Point, noting billions are being outsourced.
  • Oscar James (native resident, homeowner) echoed the call for local contracts and training opportunities for youth.
  • Rhonda Sterling (Vice President, Bayview-Hunters Point Coordinating Council) argued that the SFPUC disparity study must drive real change, citing the Step 7 project awarded to PCL as an example where local firms are limited. She urged carved-out scopes of work and formal community engagement before procurement decisions.
  • Bob Hall presented testing data showing toxic chemicals (metals, DEHP) in runoff from artificial turf fields (Beach Chalet, South Sunset, Garfield Square), urging the commission to inform the public and stop spreading artificial turf.
  • Susan Mullaney requested testing of rainwater runoff from Beach Chalet and Minnie and Lovey Ward fields for PFAS (using EPA method 1621) and 6-PPD quinone (using EPA method 1634), citing toxicity to aquatic life and human health concerns.
• Public Comments on Budget Items (8-11):
  • Steven Rinaldi (Vice Mayor, Millbrae) opposed approval of the Millbrae Operations Center portion of the capital plan, arguing the alternative analysis was insufficient, the cost near $500 million was staggering, and the design abandons transit-first policy. He urged deferring approval until a proper analysis is done.
  • Tom Smagel (Bosca) noted Bosca's review of the 10-year CIP, supporting adoption but flagging significant future work (approx. $10.1 billion for reservoirs/dams) and emphasizing continued engagement with Millbrae.
  • Ann Schneider (former mayor, Millbrae; Bosca representative) detailed how the Millbrae campus project was not included in prior SFPUC documents and expressed concern that removing a revenue-producing property (Orchard Supply Hardware) would impact Millbrae's ability to pursue recycled water and hurt ratepayers.
  • Tom Williams (City Manager, Millbrae) requested removal of the Millbrae Operations Center from the budget, stating insufficient alternatives analysis and that closing OSH Hardware would cost jobs and lose revenue, directly contradicting SFPUC's mission.
  • Peter Jack Meyer (Policy Director, Yosemite Rivers Alliance) criticized the deferral of alternative water supply projects, claiming staff manipulated the commission and that the commission should lead independent of staff. He referenced a 2022 request for comparison of demand projections.
  • Dennis Williams, Jr. (Community-based developer, Fillmore CDC) urged the commission to enforce inclusion in contracting, asking for public reporting by race and firm size, direct contracting for Black-led firms, and early community input.
  • Dave Warner acknowledged the budget increases and lower demand projections, supported deferral of alternative water supply, and requested the commission change the planning process to have more influence earlier.
• Public Comments on Item 13 (Contract Award):
  • Demetrius Williams expressed support for the nutrient reduction project but stressed the need for community contractors to be engaged by PCL, referencing past fights with Sutton/Walsh and WebCorp.
  • Oscar James echoed the call for prime contractors to attend hyperlocal meetings and provide bidding opportunities.

Discussion Items

• Item 6 – Fiscal Year 2024-25 Audited Financial Statements: Deputy CFO Vivian Chen reported that external auditor MGO issued unmodified (clean) opinions on all three enterprise financial statements (water, wastewater, Hetch Hetchy water and power, clean power) with no material misstatements or internal control deficiencies. The Annual Comprehensive Financial Report was issued December 10, 2025, and the SFPUC has received the GFOA Certificate of Achievement for Excellence in Financial Reporting every year since 2009. Audit partner Annie Louis confirmed no findings to report and highlighted two new accounting standards (GASB 101) implemented in FY 2024-25. Commissioners thanked staff for transparency.
• Items 8-11 – Budget and Financial Plans: Presenters Ms. Dooney (for operating/capital budgets) and Erin Corvanova (Financial Planning Director, for 10-year financial plan) provided details:
  • Operating Budget (Item 8): Proposed $2,166,698,799 for FY 2026-27 and $2,344,066,873 for FY 2027-28. Drivers include debt service (~$687M), power purchase (decreasing slightly), personnel costs with 37 new FTEs (mostly temporary to permanent), and ongoing costs for new facilities and community programs.
  • Capital Budget (Item 9): Requests $1,163,787,041 (FY26-27) and $1,316,552,550 (FY27-28), with bond authorizations of $551.9M (water), $1,165.7M (wastewater), $138.2M (power). Commissioner Stacey asked about discrepancies between bond authorizations and capital budget; staff explained that bond authorizations include financing costs and overlapping Hetchy water/power/joint projects.
  • 10-Year Capital Plan (Item 10): Totaling $12,558,987,332 through FY 2035-36. Staff emphasized that $3.5B was cut from earlier versions to prioritize critical projects. Commissioner Stacey expressed disappointment in deferral of alternative water supply projects but acknowledged the tough trade-offs.
  • 10-Year Financial Plan (Item 11): Corvanova detailed assumptions: conservative water sales forecasts (adjusted down from baseline, factoring in conservation and population trends), expense growth (6% for fringe benefits), debt financing assumed at 3.5-4% short-term, 6% long-term, and aggressive pursuit of low-cost loans (e.g., WIFIA) but not counted on. Key projections:
    • Water: 7% rate increases for retail in each of next two years; wastewater: 15% and 14.5% increases.
    • Average customer combined bill projected to exceed affordability policy targets from FY 2034-2044, then return below due to income growth.
    • Customer Assistance Program (CAP) participants are projected to remain under 5% of income through 20-year period.
    • Hetch Hetchy Power: 7% retail rate increase next year; average bill projected to rise from $98 to $209 over 10 years.
    • CleanPowerSF: 20-25% rate decrease effective March 1, 2026, approved earlier. Commissioner Thurlow asked about conservatism in demand forecasts; staff explained they adjust down from planning department and wholesale customer projections to between low and baseline scenarios. Vice President Leveroni asked about the spike in water volumes; staff attributed it to housing growth assumptions, adjusted down. President Arce expressed appreciation for the work to reduce near-term rate impacts and buy time for long-term solutions. General Manager Herrera clarified that the Millbrae Operations Center is not being approved today; it will come separately later, and he provided a letter detailing ongoing engagement with Millbrae, noting that SFPUC does pay property taxes there.
• Item 12 – Water Supply Assessment for Mattson Block Project: AGM Steve Ritchie presented the assessment for a 3.5-acre block bounded by Market, Main, Mission, and Beale Streets. The assessment is a CEQA requirement, not project approval. Commissioners approved without discussion.
• Item 13 – Award of Progressive Design-Build Contract DB-141 for Southeast Water Pollution Control Plant Nutrient Reduction: Principal Project Manager Jignesh Desai presented the request to award to Jacobs/PCL SF Joint Venture (initial pre-construction services of $192.7M; total contract budget up to $1B; duration 4,850 days, pre-construction 1,460 days). The project is driven by a Regional Water Board nutrient permit after harmful algal blooms in 2022-2023. Procurement used 75% qualifications / 25% cost evaluation. Two proposers; Jacobs/PCL scored higher on written and oral proposals but lower on cost. A protest from Sunt Construction was denied. Commissioner Thurlow asked about the pipeline; staff noted it's the largest wastewater PDB in the country, only two qualified proposers. Commissioner Stacey asked about price differential; staff explained the cost component used a plug number for direct costs, and the higher technical score outweighed the price difference. President Arce noted the close score (4.4 pts out of ~1000). Commissioners discussed the importance of LBE requirements and asked about tracking actual outcomes. Algie from CMD confirmed LBE data is posted on the SFPUC website and closeout memos are in commission packets. President Arce requested a more aggregated user-friendly dashboard.
• Item 15 – Items Initiated by Commissioners: President Arce initiated a request to improve access to completed project LBE data (projected vs. actual), asking staff to report back.

Key Outcomes

• Unanimous Approvals (all 4-0-1 excused):
  • Minutes of January 27, 2026 (Item 3).
  • Consent calendar (Item 7).
  • Biennial operating budget (Item 8).
  • Two-year capital budget (Item 9).
  • 10-year capital plan (Item 10).
  • 10-year financial plan (Item 11).
  • Water supply assessment for Mattson Block project (Item 12).
  • Award of Progressive Design-Build contract DB-141 to Jacobs/PCL JV (Item 13).
• Directives:
  • General Manager confirmed commitment to continue engagement with City of Millbrae on the Millbrae Operations Center; no approval of that project today.
  • Staff to report back on improving public access to historical LBE compliance data.
• Next Steps: Rates for water, wastewater, and Hetch Hetchy Power will be adopted in spring 2026. The nutrient reduction project will proceed with pre-construction; construction will only commence after CEQA approval by the commission.