Come to order.

Can we please call roll, Ms.

Lanier?

President Arce.

Here.

Vice President Leveroni.

Here.

Commissioner Jamdar.

Commissioner Stacy.

Here.

Commissioner Thurlow.

Here, 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 ethno-historic territory of the Moekma Aloney 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 Moekma Loney tribe's aboriginal lands since before and after the San Francisco Public Utilities Commission's founding in 1932.

It is vitally important that we not only recognize the history of the tribal lands on which we reside, but also we acknowledge and honor the fact that the Moeq Maloney 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.

Item three, approval of the minutes of February 24th, 2026.

Colleagues, are there any corrections to the minutes of February 24, 2026?

Seeing none, can we please take public comment?

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

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

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

Ms.

Linair, there are no callers in the queue.

Thank you.

All right, colleagues, can I get a motion to approve the minutes of February 24th, 2026?

So moved.

By Commissioner Stacy.

Is there a second?

Second.

Um, Commissioner Jamdar.

President Arce.

Aye.

Vice President Leveroni.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy?

Aye.

Commissioner Thurlow.

Aye.

Item three passes item four.

General public comment.

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

Members present who wish to speak are encouraged to complete and submit to the Director of Commission Affairs a speaker's card located on the table to the left of the public gallery seating area.

Please note that each member is called to the podium to speak in the same order cards are received.

The Commission values civic engagement and encourages respectful communication of the public meeting.

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

Thank you.

Remote callers, please raise your hand if you wish to provide public comment.

First up, I have Mr.

Francisco da Costa.

My name is Francisco de Costa, and I come here from time to time.

It's time that we speak truth.

The indigenous people kept this land pristine.

SFUC is a disgrace to the human race.

On the top, like the roofs.

The water stinks.

And so all the reservoirs in San Francisco.

They are asking that we get inspection.

We already have the photographs.

We already have the sludge.

We already have the empirical data.

It is time to speak truth.

And not fool the San Francisco citizens and make them pay for the water, which at one time was pristine, was brought here pristine, but is not cared for.

Thank you very much.

Thank you.

Next I have Susan Mullaney.

I have something from the Crocker Amazon Park is in the Sunnydale drainage basin.

Crocker Amazon Park is in the Sunnydale drainage basin.

On this historic map of San Francisco Creeks, you can see a creek flowing through Hummingbird Farm.

There's also a natural spring on the hillside above Hummingbird Farm.

Heavy rain events in the city lead to overflow at the Sunnydale Tunnel.

The PUC investigated overflow problems citywide.

The report notes that the Visitation Valley Playground baseball fields provide a large open space for infiltration.

Obviously, the conversion of twenty acres of Crocker Amazon playground baseball fields into artificial turf is the opposite of their idea that baseball fields are great for infiltration.

So I ask you to oppose the artificial turf at Cracker Amazon since you do own that land.

Thanks.

Next is Tracy Swedlow.

And meet people in the neighborhood.

Crocker Amazon Park should serve all people, not just one activity of a private institution.

This proposal would also close large portions of the park during construction, removing access for well over a year.

It would also remove uh 100 mature trees.

Many of us grew up hearing the message of the Lorax of Dr.

Seuss that someone must speak for the trees and the environment before it's too late.

That's what I'm doing here today, and I hope you do too.

I urge you to be against that proposal.

Thank you.

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

Ms.

Lanier, there are no callers in the queue.

Thank you.

Item five.

The GM will provide item five report of the general manager.

Thank you, Ms.

Lanier.

Item five A is the FSFPUC quarterly budget status report.

Anna Dooning will be presenting.

Good afternoon, Commissioners.

I'm here today to report on the second quarter operating budget projections.

So these are budget projections through December of twenty twenty-five.

If you can pull up the slides.

All right.

In some, we're looking at positive operating results in power, clean power SF, and water, and currently projecting a modest shortfall in wastewater.

Importantly, all enterprises are meeting our internal policy targets.

So I'll walk through each enterprise and their results.

First in water, overall revenues are down, mostly driven by wholesale water sales trending below budget.

This is largely in line with prior year trends.

But at this point, recall this budget was set over two years ago.

So the budget for next year has been adjusted to account for these lower volumes.

Wholesale customers also tend to do a lot more irrigation.

So if there's wet weather as there was in the second quarter of this year, water usage tends to decline.

Other revenue shortfalls in water are due to no longer relying on build America bond subsidy.

But all of this is offset by debt service savings from a refunding last year, as well as some savings in personnel.

I'll move on to wastewater now.

Wastewater is currently showing a slight show shortfall driven by variance in usage or demand, and this is partially offset by expenditure savings in a few areas.

It's a modest shortfall at the moment, as an and as we get into the second half of the year, we're likely to see some more savings that will probably bring them out of this short deficit.

Moving on to power.

So power is projecting to end the year with over $1550 million in surplus due to both lower demand as well as lower power purchase costs from higher generation and lower distribution and energy prices.

I will note that this is not yet incorporate more recent changes to the energy market due to current events in the Middle East, so we may see some of those effects in later reports this year.

Finally, in Clean Power SF, we're also projecting a positive operating result.

Overall revenues are down, mostly due to the rate increases that you all approved and that just took effect.

I'm sorry, the rate decreases.

But this is more than offset by lower power purchase prices as well as a reserve that was set aside to build fund balance.

And that is some of the fund balance we're using to fund that rate decrease.

And my last slide here, as mentioned earlier, we are in line with both our fund balance reserve targets as well as our debt service coverage targets.

And with that, I can take any questions.

Thanks, Ms.

Dooning.

Questions, colleagues.

I had a a question on the slide with respect to the water savings of 29.5 million on the restructuring of the debt from the 2025 element.

Yes.

It sounds like that's a direct result of the work that Nikolai Sklarov and his team present to us on a regular basis and the work that they're doing to realize those kind of savings.

Is that a correct one?

Absolutely.

It kind of inference there that's that's what we get.

Yeah, that great.

That savings is a direct result of that team's work, looking for opportunities to refinance and find lower cost ways to finance our capital program.

Okay.

Great.

It's great to see that yielding that that savings there, nearly $30 million in savings because of their work.

Yeah, thank you for noticing that.

Any other questions?

Commissioner Jamdar.

Thank you, President Darcy.

Just a quick question.

Uh the savings on personnel.

I don't quite understand that.

Is that uh sort of decreasing FTEs, or how do you save on personnel?

Sure.

So every year we estimate the budget that's needed to sustain uh the cost of salaries and benefits for all of our employees.

We don't always get it exactly right because of regular attrition turnover vacant positions.

So savings are a result of usually vacancies or not filling positions as quickly.

All right.

Any other questions or comments?

If not, perhaps we can turn to uh public comment.

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

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

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

Ms.

Lanier, there are no callers in the queue.

Thank you.

Thank you, Ms.

Lanier.

Item 5B is HECHI Capital Improvement Program quarterly report.

Uh Katie Miller would be presenting.

If I could have the slides.

Good afternoon, President Arce and Commissioners.

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

And today I will share a summary of the HECHECI Capital Improvement Program for the past two quarters through December 31st, 2025.

Over the past quarter, our teams have been working collaboratively to update our quarterly reports so they meet the accessibility requirements of the U.S.

Department of Justice.

These changes to the reports include simplifying many of the tables and charts so that they are readable by accessibility software and removing some of the photos that may be difficult for the software to interpret.

Thus, the primary changes to the HECHECHI and water quarterly reports include that we remove pie charts and bar charts, we reduce the number of photographs and now are now including them in the executive summary.

We remove tables formally in sections five and six, but the data is still included in the project status reports.

And we combine sections 9 and 10 in closeout and completed projects.

We hope you will find the new formatting acceptable and easy to read.

As an overview, the Hetch Hetchy Capital Improvement Program includes 22 major projects that are funded by water power or joint water and power revenue and bonds.

There are two projects that benefit water customers only located along the San Joaquin pipelines.

There are seven projects that benefit power customers only at the hydropower facilities and power transmission lines, and the majority of the facility upgrade projects benefit both water and power customers.

These include 13 major projects at the dams, tunnels, and pipelines that serve both water and power production.

There are currently nine construction contracts underway for a total construction value of 275 million dollars.

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

$506 million has been spent of the $2 billion budget, and $47 million was spent during the first and second quarters for a total expenditures during 2025 of 102 million dollars.

The program is on track for planned spending.

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

For the new cost variances, the largest cost increase was forecasted by the Moccasin Penstock Rehabilitation Project with a forecast cost increase of 203 million dollars.

Only four of the 22 other projects had cost increases forecasted during the past two quarters, which is a testament to the greater confidence we now have in the true project costs for these projects.

All the forecasted cost increases have included in the fiscal year 27 to 36 10-year CIP that you approved in February.

As part of the revised project format, we hope to highlight projects and contracts that have completed major milestones.

During the past two quarters, two contracts reached final construction completion, one contract achieved substantial completion, the Warnerville project was granted notice to proceed, and the Cherry Dam Spillway construction contract was advertised.

And now for some project highlights.

For the Mountain Tunnel Improvements Project, significant work was performed both leading up to and during this most recent winter shutdown of the Hetch Hetchy water system from late December to February of this year.

During the shutdown, about 80% of the tunnel contact routing was completed.

Within the priest flow control facility, the second batch of two 72-inch diameter double disc knife gate valves were installed, and one of the two 72-inch sleeve valves was installed.

At the priest addit, 80% of the tunnel final concrete lining was constructed.

At early intake, the bulkhead door construction was completed, and at the Mauccasin water filtration plant, major construction work was performed on the building exterior structure.

And these photos on the left shows the tunnel grouting repair work.

This was performed in 24-hour shifts round the clock during the entire shutdown.

The right photo shows the two double disc knife gate valves located to the right in the photo, and the large red colored sleeve valve is to the left.

It was a pretty significant accomplishment getting those in.

The Moccasin Pennstock Rehabilitation Project is now forecasting a cost increase of about 203 million dollars, as I shared.

This was from the latest cost estimating and accounts for a full replacement project of either a pipeline or a tunnel or some combination of both.

During the past quarter, the SFPUC acquired a privately held property along the existing Pennstock alignment, thus form removing former easement restrictions.

Because of the acquisition, new tunnel and pipeline alternatives can now be examined within the current right of way.

This may lead to cost savings as well as operational efficiencies.

We are currently planning to perform geotechnical investigations along the current right of way over the next year to better understand constructability and costs of these alternatives.

And as I shared before, that this cost increase was included in the budget that was approved in February.

The moccasin wastewater treatment plant made significant progress constructing the sequencing batch reactor and other site utilities.

However, there were some construction setbacks, such as concrete defects, and these are now being resolved and may result in some delays to the overall contract completion.

The construction scopes for the Cherry Valley Dam spillway short-term improvements and the Eleanor Dam Bridge interim repair subproject were combined into one construction contract due to their remote but somewhat close proximity, hoping for lower construction bids due to lower mobilization costs and higher combined value for a contractor.

This contract was advertised in November with an engineer's estimate of $13.5 million.

Three bids were received, with the lowest bid being $8.7 million.

On today's consent calendar, you will be requested to award this contract.

The long-term project for dam safety to the Eleanor Dam continued.

And all forecasted costs and schedule increases were included in the 10-year CIP.

Although with these lower construction bids, we may achieve some cost savings on these interim projects.

Finally, two of our construction contract teams received awards for excellent partnering between the contractor and city staff.

The prestigious Silver Award was awarded to the construction teams for the O'Shaughnessy Dam New Bulkhead System contract and the Tesla Surge Tower contract, both received from the San Francisco Collaborative Partnering Steering Committee.

And we're very proud of our teams.

And with that, I'm happy to answer any questions.

Thank you, Ms.

Miller, and congrats to both those teams highlighted in the last slide.

Questions, comments?

Vice President Leverone.

Just curious on the uh 22 contracts total.

How many of those were progressive bid or were any progressive bid contracts?

Would you know offhand?

I know that the O'Shaughnessy Dam bulkheads contract was a progressive design build, and that was one of the ones that won an award, and we had significant cost savings on that.

We also have CMGC on is Jimmy here.

Okay.

Uh we have a the Moccus and Dam project construction contract will be uh CMGC construction management by general contractor.

And we are seriously evaluating progressive design build for some of the projects that come up.

Uh Moccusin Penstock is one that we're thinking about because we really think that getting that contractor engaged early will really help us with understanding the true costs and the constructability of the project.

Thank you very much.

Other questions, colleagues.

If not, perhaps we can turn to public comment.

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

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

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

Ms.

Lanier, there are no callers in the queue.

Thank you.

Mr.

President, item 5C is a wastewater enterprise capital improvement programs quarterly report.

Uh Bessie Tam will be presenting.

Good afternoon, President Arse and Commissioners.

Can I have the slides, please?

I'm Bessie Tam, the wastewater capital delivery director here to report on Q2 of a wastewater capital programs report.

As usual, the cover shows a photo of one of our projects.

This is highlighting the Channel Force Main in Jitai project with active construction happening near Caesar Chavez Boulevard across the from the SFMTA yard, so Caesar Shaffis and Indiana.

Very exciting project that's going to give us a lot of redundancy to our partial redundancy to our Channel Force Main.

Similar to the HECHI report, uh, we have also uh worked very closely to make our quarterly report accessible.

In addition, we took the opportunity to streamline and make some adjustments to re to the report that I will be talking about throughout the presentation.

So this slide didn't change from our previous presentation.

On the left side is our Westside Pump Station Reliability Improvement Project.

It's about 60 69 to 70% complete in construction.

Very exciting work showing the new flange coupling adapter with new piping and a 66-inch expansion joint with a 66-inch plug valve being lowered into alignment in that photo.

In the middle is one of our RR collection system sewer improvement project.

This is a various location, sewer replacement locating near 36th Avenue here.

Here the contractor is lowering a trench excavation into the trench excavation, a precast 48-inch wide concrete section to install a new manhole structure to access the sewer main at 36th Avenue.

And finally on our right is our BDFP, our biosolus digestive facility project.

Specifically, this is highlighting the work for our biogas utilization facility.

This is a transition slide.

On the left is what I had been presenting to the commission in the past, which highlights the SSIP phase one project.

So the dollar values and the counts by each category of project phase.

In this report, what you notice is that we are making a shift where we are reporting on all the capital projects, both in the SSIP phase one, other SSIP, as well as facility infrastructure.

This is in alignment with our rolling CIP concept.

So moving forward, what I'm going to be reporting on is the 127 projects in the capital project category.

So I'm going to move to the next slide, which is what you will be seeing a lot more of moving in the future.

And on the upper right hand corner, it also references the section in a quarterly report where this information can be found.

So again, on the left side shows the spread of the number of projects in each project phase, and then on the right highlights the expenditure.

So for all the capital projects, you can see we have expanded about 50% or more of the number of projects.

This is similar to what we've presented before.

So again for the capital projects, this is the cost performance overview.

What you might notice in this report is we have updated the current approved budget to reflect the mid-cycle budget, which is a hundred almost 165 million dollar increase for the biogas subproject that's under BDFP.

And then on the forecast cost for this quarter, similar to Director Miller's report, this matches the fiscal year 2736 10 yep that came before the commission on February 10th.

We are also going to be presenting and showing our R and R projects cost performance.

So we're making very good progress in the program.

And here are some of the highlighted major projects, SLV's treatment plant.

You can see in the photo on the right, there's a lot more buildings up for the biosolids digestive facility, drone footage of the site showing you know the all the facility that are up.

And currently we're at almost 90% completion on construction.

The Headworks project, the new Headworks project, we want we are very happy to forecast a slightly lower budget overall.

So we are forecasting about 10 million dollar cost savings because construction is almost complete.

And again, this forecast is already reflected in the forecast as well as the 10-year CIP.

We want to highlight the next the second um largest value project in the program next to BDFP, which is our mainstream nutrient reduction project.

Again, this is uh status as of December 2025.

And in the February 10th meeting, uh this commission actually already uh awarded the design bill contract, DB141 to Jacobs and PCL.

And with that, I'm happy to answer any questions you have.

Thank you, Ms.

Tam.

Questions from the Commission?

Anyone?

All right.

Thank you very much.

We can take public comment, Ms.

Lanier.

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

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

Commissioners uh just take things for granted.

Just take things for granted.

And we started a sewage system improvement project.

Okay.

There was a group of people who agreed that we would have quarterly or six months.

Presentations given to the taxpayer.

We started with six billion dollars.

Then it went to 15 billion dollars.

It's now going to be heading to 25 billion dollars.

Whose money is it?

Whose money is it?

The taxpayer is scapped out.

This presentation is talking about things in a general way.

But we know, for example, at Marine Street, there's a force main there that hasn't been repaired from the year 20 or two.

Irvington Tunnel.

We know what's happening over there.

We know what's happening in the reservoirs.

We know that there are still lead pipes all over the city and county of San Francisco.

Where is the taxpayer?

Where is the accountability?

Where is the transparency?

Thank you very much.

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

Ms.

Lanier, there are no callers in the queue.

Thank you.

Thank you, Ms.

Lanier.

That concludes my report.

Thank you.

Item six consent calendar.

All right, colleagues, any questions or comments around the three items on our consent calendar today?

Commissioner Stacy.

Thank you.

I had a question about 6A and 6B, the compensable delay amounts that were shown up in the three different bids.

There's an incredible disparity among the three bidders.

And I I know this may be some conjecture on your part, but I wonder what accounts for that.

6A, we had two that came in at $5,000 a day for compensable delay up to $60,000.

And then for the Cherry Spillway project.

We have one that comes in at $15 a day, another at $7500 a day, and the third at $225,000 a day.

So I I know that Sierra Mountain has done work in that area with the PUC before.

Maybe that's why they come in so low at compensable delay, they're familiar with the area and the work.

But I I just wonder why there's such a disparity.

And when you have a very high compensable delay, does that generally lead to more arguments or disputes about who's causing the delay and how long it lasts?

I the number, it's just very curious how different it comes in for the various contractors.

Good afternoon, Commissioners.

Alex Burns, Contract Administration Bureau.

So when utilizing compensable delay in our bids, it's a competitive bid priced item.

So yes, they can insert different amounts, but since it's part of the overall competition for the lowest price, the amount that they choose to use will is included on the list that you saw there.

Yeah.

And it will have effect on their overall bid price.

So while it can vary from bidder to bidder, um as it's part of the competition, it depending on if they choose to go extremely low or extremely high, it could affect whether they're low bidder or alternatively not the low bidder.

And the compensable delay is a you factor that in as a 10-day delay, is that what I'm remembering?

So each bid will have its own.

It's different.

Sorry?

Sorry, go ahead.

Apologies.

Each bid will have its own compensable delay amount duration.

So we'll announce that at the bid open.

And uh it could be 10, 20.

So each one should have a different volume that we times their compensable day rate by.

Yeah.

Does when somebody has a higher compensable delay number, does do you think that typically leads to more uh disputes in the contract about who causes the delay and how one is compensated for it?

Afternoon, Commissioners.

Uh Stephen Robinson AGM infrastructure.

Thanks to Alex for his response.

Um yeah, I I think because each contract is different, each contractor or proposer then is different and their interpretation of risk or what it means.

It's hard to say that it may necessarily lead to any more or less disputes or claims.

And it's really their own professional business and their business decision about how they approach the particular bid itself.

I see.

Thank you both for the information.

Commissioner Thurlow.

Thank you.

I actually am wondering about two items.

I think it's 6B and 6C, where the engineers estimates were significantly above the award amounts.

And you know, similar to Commissioner Stacy's point, there is also a massive range, um, kind of an expectedly large range in the bids received.

And so I'm wondering how how should we think about that?

Thank you, Stephen Robinson again.

Uh in general, it's a good thing that the ultimate bids come in lower, and especially if there's a if there's a multiple bidder market, I suppose, than response to particular request.

Um if there is a low number of bids, obviously there's competition in the market, they're being careful.

If there's a larger number of bids, presumably there's more interest in the particular work, and that could be seen as a good thing.

Um if there's a lot of range in the dollar amount and a low bid environment that we're talking about, that can raise some concerns and makes us think about um why the market's responding or how we want to procure the work in future for that type of work.

Um in a situation where the award comes in significantly lower than our own engineers' estimate, it does raise attention to that too.

However, the contractor is willing to enter into a contract by putting that bid forward, and we will hold them to it unless of course there is a justifiable change or some conditions of change in some way.

But um our processes should be neutral depending on whether or not the bid comes in high or low.

We manage things carefully as the contract progresses and the work is carried out.

And so it's not necessarily true that we see these contracts kind of escalate unexpectedly in cost over time if they come in substantially below what our engineers' estimate is.

There could be perception that that's the case, but I mean I'll argue it's not necessarily factual always that we could say that it will always ultimately lead to a relationship with a contractor where we expect things to grow.

Um it's something that we would pay attention to, um, but I said not necessarily that we would expect it to, but it can go that way.

Okay, great.

Thank you.

All right.

Any other questions?

Can we take public comment on the consent calendar, Ms.

Nair?

Remote collars, please raise your hand if you wish to provide comment on the consent calendar.

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

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

Ms.

Lenaire, there are no callers in the key.

Thank you.

Colleagues, can you get a motion to uh approve the consent calendar?

Motion to approve.

Moved by Vice President Leveronians or a second second.

From Commissioner Thurlow.

President Arce.

Aye.

Vice President Leverone.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacey.

Aye.

Commissioner Thurlow.

Aye.

Item six passes.

Item seven.

Authorize the general manager to execute a memorandum of agreement with the City of San Bruno to establish the operational rules for San Bruno's new Acapello Well No.

Good afternoon, Commissioners.

My name is Obzowie.

This one.

Okay.

Start this again.

Good afternoon, Commissioners.

My name is Obin Zoe.

I am the groundwater program manager at the SFPUC.

And I'm here presenting this request for an MOA with the City of San Bruno to allow us to utilize their new well SB21 as a shared facility.

Can I have the slides, please?

Yeah.

This is a quick.

Okay, so the SFPUC approved implementation of the regional groundwater storage and recovery project in August of 2014.

This project is based on an in-lew storage of groundwater and was developed in conjunction with our partner agencies, the City of San Bruno, City of Daily City, and Carl Water, who is the water provider for the city of South San Francisco.

The project is part of the water system improvement program and will allow us to provide a new dry year supply of groundwater to ourselves and our partner agencies.

It also gives us an emergency supply in case of earthquakes or some catastrophe.

The project, as I said, will provide additional supplies for both the PUC and our partner agencies.

And it allows us to conjunctively manage the basin along with our partners.

The groundwater basin within the southern portion of the of the bay is the Groundwater West Side Basin, and we will be managing that with our partners here.

The project has an operating agreement that requires the partner agencies to install groundwater wells that connect to their systems.

The PUC already installed a total of uh 13 wells.

Nine of the wells connect to our system, two connect to Daily City's system and two connect to Calwater system.

San Bruno, however, has not yet installed a well, and we do not have a well that connects to their system.

We had initially tried to work with the Veterans Association to install two wells at the Golden Gate National Cemetery.

Unfortunately, we were unable to come to agreement with the veterans.

And up until this point, we had also been unable to reach agreement with San Bruno on the location of a new well.

However, working with the San Bruno for the last couple of years, we were able to come to an agreement with them, and San Bruno has proposed that we use a new well that they are installing as a shared facility that would operate for them and also for the GSR project.

It is in the Southwest Side Basin and in San Bruno.

It's also close to a location of a previous well that they had that is going to be decommissioned.

So the project operates as on an in-lew storage.

During normal and wet years, the PUC advances ground uh surface water to the partner agencies.

This allows them to pump less groundwater and allows the basin to naturally recharge.

During dry years, San Bruno, along with the other partners would operate their wells, allowing us to pull that water back out and augment the lack of surface water that we would have in drought.

As part of this agreement, San Bruno would operate this new well as if it was a GSR project well to the benefit of both agencies.

This allows us to actually extract uh groundwater that is stored in the basin.

It will also allow us to get reimbursement for surface water that we already provided to them as part of the overall project agreement.

The new well will be constructed by San Bruno.

It's actually already been constructed by San Bruno.

Um and PUC will contribute about 38% of the capital construction costs.

And this is matching how much benefit we will be getting out of the well during use in dry years.

Phase one is was the construction of the well, which is done.

Phase two will entail construction of a treatment system as well as conveyance pipelines.

And that process is still in design.

They are about 35% design, but anticipate getting that done by the end of the year.

The request here is to approve this MOA with San Bruno so we can utilize this well as the shared facility, and I am here to answer any questions that the Commission might have.

All right.

Thank you, Mr.

Anzoe.

Questions?

Colleagues.

All right.

Unless they're oh, Commissioner Stacy.

Thank you.

I have a question about the veterans administration cemetery.

Was it a cost issue for them?

Was that um no, it wasn't.

Uh it was just an inability for us to for them to agree that we would have wells there.

They were concerned about the way this would look, potential impact on the interned folks and the families of us having additional infrastructure on the cemetery grounds, and we're not able to ultimately bridge that gap.

Yeah.

This seems like a great project and great use of that groundwater base, and it's too bad that we're limited uh in the number of wells.

My second question is sort of a general finance question.

The three parties to this are the PUC, San Bruno, and Cal Water, and Daily City, sorry, four.

So because it's a regional project, does the PUC's share then also get distributed among the regional customers?

Is that how this works?

The PUC's share of what I'm sorry?

Of the costs.

Um basically this is a PUC project.

And the way I'll back up a little bit.

The way we are kind of the way we kind of structure this is during the wet and dry seat periods when PUC advances what is the partners, they don't pay for that water.

Um during the dry season, though, with all these wells that we install, especially the two or the ones for the each partner agency that are connected to the systems, we get to build them for that water.

So this allows us to recover the money that we've put into it.

In addition, it gives us this new supplies so that our surface water supplies that would have been impacted during a drought situation have that less demand on them.

Um so that's how we are able to kind of offset the costs and get a benefit for our ratepayers.

I see.

Right.

It's funded by the wholesale customers.

It is funded by the whole by the entire region.

Thank you for the other explanation.

I think that's it.

Thank you, Commissioner.

Can we take public comment, Ms.

Lanier?

Remote collars, 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?

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

Ms.

Lanair, there are no callers in the queue.

Thank you.

Commissioners, can we get a motion to approve item seven?

Move to approve.

Motion from Commissioner Stacey.

Seconded.

Second from Commissioner Jamdar.

President Arsay.

Vice President Leveroni.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy?

Aye.

Commissioner Thurlow.

Aye.

Item seven passes.

Item eight.

Award contract number PRO.0327 H H W PNURC compliance and audit support to Archer Energy Solutions LLC.

Good afternoon, Commissioners.

My name is Adam Zirkowitz.

I'm the division manager for Hatchet Water and Power.

I'm also the SFPUC NERC compliance officer and the SIP senior manager for the SFPUC.

Thank you for the slides.

Overall, the SMPUC's NERC compliance program is responsible for the SPUC's compliance with the North American electric reliability corporation requirements.

As an owner and operator of power trans generation and power transmission system, the SFPUC has to comply with their oversight for reliability standards.

These standards oversee operation and planning as well as cybersecurity of all of the bulk electrical assets that we have.

Um that the SOPUC operates.

So some of the risks, so overall non-compliance really is about reliability of the electrical infrastructure for the bulk electro system electrical system, but as well as financial impacts potentially and oversight of our operational of the system.

So continued compliance is certainly in our best interest.

And when I'm talking about the bulk electrical system infrastructure, it's not just the power generation and transmission facilities that go from HECI, but as well as power enterprises infrastructure within the Bay Area, as well as water supply and treatments distribution system as well.

So the SFPUC NERC compliance program oversees all of the compliance within all of the enterprises.

Support audits, ensure the cybersecurity of all of the bulk electrical system assets that the SPUC has, develop and implement training programs, subject expertise, review our compliance processes on our procedural documents, and then support for new related standards.

So the request today is to award Pro 327 for a five-year duration not to exceed 11,600,000.

All of these progress all of these contracts have really made us a successful program.

So we're just requesting that we continue on with this next request uh next uh Pro 327 contract.

I'm happy to take any questions.

Thank you very much for the presentation.

Questions.

Vice President Leverone.

Thank you for the uh for the presentation.

Um with the fact that there could be penalties and we could have a breach in our security.

Is there a liability that is then pushed back onto Archer in this situation that would protect us from having to pay the penalties if that would incur and have any penalties ever been paid?

Yes, we have had noncompliance penalties before.

I can't quote um what those penalties have been in the past.

Okay.

Um so yeah, some of the reliability still falls onto us.

I I'm not familiar enough with the contract to say what their liability is for Archer themselves.

Thank you.

I can get that for you if you'd like.

Adam, this is the first time you've appeared in your new role, correct?

It is, yeah.

Okay.

Well, no, the second time I was here for the original budget.

Okay.

I just want to remind everybody that Adam has replaced Margaret Hanniford as the Hedge HETC division manager, and we are very happy to have him in that role.

And I just wasn't sure if we had a little crossover and take the opportunity to reintroduce you to Adam.

And uh he's gonna do a great job in that role, so I'd encourage you to get to know him because whenever you go up to up to Hedge HETCI, he's your host.

All right.

Yeah.

Welcome to have you any time.

Welcome to the new role.

Thank you.

Commissioner Stacy.

Thank you, and welcome.

It's nice to see you here.

It's a long drive.

Um I thought I heard you say that energy solutions is Archer Energy Solutions is the current uh contractor.

And so this is correct.

Okay.

And it's as needed, so it's up to 11.6 million dollars, rough, you know, about two or so million dollars a year.

And do you have you typically used the full amount of the contracts in the past?

Um the past contract, yes, we did use the entire expanse of it for a couple of reasons.

Um we had staff that um SFPUC staff that left the organization.

Uh, Archer picked up some of that work as needed portion of it.

Um we've brought on staff since, um, but that was one of the portions of significant cost is having to outsource some of that work with them.

Um otherwise, without that work, we would have stayed within the contract bounds.

And is this some is this a form of expertise that can be passed on by the consultant as you go so that eventually some of it will be brought in-house, or do you see this as an ongoing need?

I assume it's a fairly complicated set of restrictions with a lot of assets to keep track of.

Yeah, it's a good question.

Um aspects of that is there's very uh distinct skills, knowledge bases for those standards specifically on the operational side, and then on the cybersecurity side.

So there's kind of these very niche knowledge bases that we don't really leverage as a full-time type employee.

So I could see those sorts of expertise having to remain in a consultant world where we're um bringing some of those skill sets of how they're applicable to our actual assets to staff in-house.

Uh we've recently uh we're about to onboard one additional staff to support that program internally, and we have another one that we've been trying to onboard with some some challenges of onboarding, but um should have them on board in the next few months as well.

So bringing some more of that applications to our infrastructure in-house, yeah.

Great.

Thank you.

All right, unless there's any other questions, can we please take public comment, 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?

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

Ms.

Lanier, there are no callers in the queue.

Thank you.

Okay, can we get a motion to approve item eight?

Move to approve.

Motion from Commissioner Sacey.

Second.

From Vice President Leveroni.

President Arce?

Aye.

Vice President Leveroni.

Aye.

Commissioner Jamdar.

Commissioner Stacy.

Aye.

Commissioner Thurlow.

Aye.

Item eight passes.

Item nine communications.

Thank you, Ms.

Lanier.

We take note that we've received the communications listed in this item.

Item 10.

Items initiated by commissioners.

Colleagues, any items to initiate for further discussion in the future.

I've got one observation from a uh a meeting.

I accepted an invitation to last week in Baby Hunters Point, the Baby Hunters Point coordinating council.

And they were asking me one uh uh about a question I had asked maybe last month about how we type of um report out when we have our LBE contractor goals at the beginning of a project, how we kind of make the actual outcomes available when we have a project close out.

And I remember I started to go through the website and then I I kind of lost my way.

Not for a future agenda item, but I would be curious for my own edification and maybe something we could share out with folks how we as an agency um try to compile that information.

And if it is there and I just missed it again, then I'm happy to be pointing in the right direction.

But if not, maybe something offline we could figure out.

I think I'm gonna speak off the top of my head here.

We do give um very general big things about how we're doing on LBU, which we've reported out here quite frequently about what how we meet our goals.

But in terms of project specific project specific, I think that that's information that is compiled by uh another city department, if I am correct, isn't it?

Um Ms.

Bregman, I'm I'm I'm correct.

Am I not?

It's pr it's is it um?

Contracting management division.

Contracting management division that they report that information out.

We do our big how we're meeting our goals, but project specific, it comes from elsewhere.

We don't compile that.

Got it.

Maybe I could get some help to try to get it from them.

That might be Stephanie Tang might be the director.

But what we we could follow up with you and uh uh brainstorm about the best way for you to get that information.

Thank you, Mr.

General Manager.

And I know that we have to take public comment because this turned into a bit of a discussion, right?

Attorney Bregman.

Okay.

In an abundance of caution, we should take public comment.

Sure, why not?

It seems like we have a clamoring of members of the public ready to comment on this item.

Remote callers.

I'm wrong.

I don't have my glasses today.

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

Oh, I was wrong.

No one's present.

Moderator.

Ms.

Linair, there are no callers in the queue.

Thank you.

Item 11.

Item 11 is adjournment.

We adjourn at 229 p.m.

Thank you, everyone.