San Francisco Public Utilities Commission Regular Meeting - May 26, 2026

The San Francisco Public Utilities Commission (SFPUC) held a regular meeting on May 26, 2026, starting at approximately 9:30 AM and adjourning at 2:21 PM. Commissioners present: President Arce, Vice President Leveroni, Commissioner Stacy, and Commissioner Thurlow; Commissioner Jamdar was excused. The meeting included approval of prior minutes, general public comment, reports on audits and budgets, a bond refunding announcement, and multiple contract approvals related to water and wastewater infrastructure.

Consent Calendar

• Unanimously approved three consent calendar items (6A, 6B, and 6C) with no public comment and a vote of 4-0 via roll call. Commissioner Stacy requested clarification on item 6A (extension of Brisbane and Guadalupe Valley municipal improvement districts through December 2027 or new contract) and on item 6B (contract protest review process, confirming city attorney consultation).

Public Comments & Testimony

• General Public Comment: Francisco de Costa addressed the commission, stating that the water department lacks standards and has allowed unsafe conditions. He cited three employee fatalities (one shot, one killed in a trench incident, a security guard killed) and three reservoirs that he described as "filthy stinking" and distributing unsafe water, claiming OSHA inspections have prompted no action. He urged the commission to "speak true to power." No other public comment was offered on agenda items.

Discussion Items

• Item 5A – Quarterly Audit Report (FY 2025-26 Q3): Irella Blackwood, Audit Director, reported that of 35 audits tracked, 17 were completed, 9 in progress, and 9 forthcoming. During the third quarter, three audits were completed, and six open recommendations remain across two audits (public integrity and Mission Valley revenue lease). No long-term improvements were noted. Commissioners had no questions.

• Item 5B – Quarterly Budget Status Report (Q3 FY 2025-26): Anna Dooney, Budget Director, presented positive operating results for all enterprises and CleanPowerSF. Water enterprise projected a net operating surplus of nearly $12 million, with revenues down due to lower wholesale water sales and loss of a federal bond subsidy, offset by refunding savings and expenditure savings. Wastewater projected a net surplus of $6.6 million, with slight revenue decline offset by higher interest earnings and power savings. CleanPowerSF revenues were down due to a March rate decrease, offset by power purchase savings and reserve build-up. Dooney noted that despite conflict in Iran, California electricity costs are down due to natural gas reserves and abundant renewable energy. All financial policy targets were exceeded. Vice President Leveroni asked about declining water volumes; Dooney responded that a downward trend in wholesale water purchases has been observed for two years and was corrected in the upcoming budget.

• Item 5C – 2015 Power Bonds Refunding Results: Nikolai Skolarlov reported that a $26 million direct-purchase bond refinancing (with Barclays) achieved $8.5 million in savings, exceeding the original projection of 9.2% savings. The all-in interest rate was 3.74%. Present-value savings were 12% (3.8% in present value terms), well above the 3% policy threshold. An independent advisor confirmed pricing fairness. The results were presented to the Board of Supervisors. The savings will offset future borrowing costs. Vice President Leveroni praised the results.

• Item 7 – Folsom Area Stormwater Improvements Easement Acquisition: Dina Brazil, Right-of-Way Manager, presented a request to approve a purchase and sale agreement for a tunnel easement and restricted development easement at 1398 Bryant Street (Associated Limousine Operators, Inc.) for $1,454,926. The project aims to construct a 12-foot diameter, 3,800-foot wet-weather conveyance tunnel to alleviate flooding in the 17th and Folsom area, complying with a 2021 Cleanup and Abatement Order. The tunnel would cross beneath three private properties along a vacated section of Alameda Street. The needed easements are for a tunnel (4,500 sq ft) and a restricted development easement (3,400 sq ft). Construction by horizontal directional drilling is minimally invasive. The seller is also compensated for loss of driveway access for about six months. Two other property owners are still negotiating. Commissioner Thurlow asked whether the system is combined stormwater/sewer, confirmed by Joel Prater (Assistant GM) as part of the combined system, primarily benefiting heavy rain events. The item passed unanimously.

• Item 8 – Duration Contingency Increase for San Joaquin Pipeline Valve and Safe Entry Improvements (Contract HH-1005): Jimmy Leon, Project Manager, requested a 418-calendar-day increase (new duration limit: 1,506 consecutive calendar days) with no increase to the authorized contract amount. The contract is part of a larger project for pipeline isolation improvements. Leakage and resiliency concerns were identified with phase two knife gate valves after installation; staff are conducting engineering review and coordinating with the contractor. Commissioner Stacy asked if the issues were manufacturing-related; Leon clarified the contractor met specifications, but site conditions differed from expectations. The extension allows time to determine the path forward. The item passed unanimously.

• Item 9 – Cost Contingency Increase for Mountain Tunnel Improvements (Contract HH-1000R): Randy Anderson, Project Manager, presented a request for a $15 million increase to the construction cost contingency (new total contract limit: $165.17 million). The project rehabilitates the 100-year-old, 19-mile Mountain Tunnel (critical water supply for 2.8 million residents and hydroelectric power). Work is 90% complete, with remaining focus at Priest Reservoir. Four drivers for the increase: (1) changing the date of winter shutdown #5 due to operational water supply needs; (2) electrical upgrades and fiber optic communication delays affecting final sleeve valve installation; (3) additional work from de-scoping the South Fork project (pressure sensors needed in shafts); (4) evaluation of additional change orders. Commissioners expressed appreciation for the detailed explanation. Vice President Leveroni clarified the contract history: original amount $138M, 10% contingency, then +$13M contingency, -$15.7M for South Fork de-scoping, now +$15M, bringing total to $165.17M. The item passed unanimously.

• Item 10 – Duration Contingency Increase for San Francisco Zoo Recycled Water Project (Contract WD-2895): Barbara Palacios, Project Manager, requested a 360-calendar-day increase due to long-lead electrical equipment procurement and design revisions mid-construction, affecting a power meter load center and instrumentation work. No questions from commissioners. The item passed unanimously.

Key Outcomes

• Approvals (all unanimous, 4-0):
  • Minutes of April 28 and May 12, 2026 (Item 3).
  • Consent calendar (Item 6) – three items approved.
  • Item 7: Purchase and sale agreement for Folsom area easements ($1,454,926).
  • Item 8: Duration contingency increase of 418 days for San Joaquin Pipeline contract (no cost change).
  • Item 9: Cost contingency increase of $15 million for Mountain Tunnel contract (new limit $165.17 million).
  • Item 10: Duration contingency increase of 360 days for Zoo Recycled Water contract.
• Reports received: Quarterly audit report, budget status report, and bond refunding results were presented and accepted without vote (informational).
• Communications (Item 11): Noted.
• No items initiated by commissioners (Item 12).
• Meeting adjourned at 2:21 PM.