Will you please call roll?

President Arce?

Here.

Vice President Leveroni.

Here.

Commissioner Jamdar is excused.

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 ethnohistoric territory of the Moekma Loney Tribe and other familial descendants of the historic federally recognized Mission San Jose Verona Band of Alameda County.

The SFPUC also recognizes that every citizen residing within the Greater Bay Area has and continues to benefit from the use and occupation of the Mowak Maloney 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 Moekmaalone people have established a working partnership with the SFPUC and are productive and flourishing members within the many greater San Francisco Bay Area communities today.

Item three, approval of the minutes of April 28 and May 12, 2026.

Colleagues, are there any corrections to these two sets of minutes?

Commissioner Stacy.

Understood.

Thank you, Commissioner Stacy.

Any other comments?

Seeing none, can we please take public comment, Ms.

Lanier?

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

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

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

Ms.

Lanier, there are no callers that wish to be recognized.

Thank you.

Colleagues, can we get a motion to approve the minutes of April 28th and May 12th?

Motion to approve.

Motion by Vice President Leverone.

Second.

Second by Commissioner Thurlow.

President Arceus.

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.

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

Please note that members are called to the podium to speak in the same orders that cards are received.

As we prepare to take public comment, I want to remind the public 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 please refrain from the use of profanity.

Thank you.

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

Mr.

Francisco de Costa.

I would suggest that one of the things we do for this commission is to take a pledge to speak true to power.

So we come here, and we see that uh and we try our best to speak true to power, but we're getting no response.

And if you do a needs assessment on the water department, you y'all won't be shocked to hear that one employee was shot in the head.

And this this type of things are not brought to our attention.

Another Latina woman was digging in the trench in the Portrayo Hill on a slope.

Somebody ordered the tow person to take the car, the car slipped down, and she got killed.

Another Indian who was a security guard, he got killed.

Why am I saying this?

I'm saying this because the water department does not have standards.

No standards whatsoever.

And there's three people or three employees that were fired.

Well, fired illegally.

And right now there are three reservoirs, filthy stinking reservoirs, that your commissioners are allowing that water to be distributed to the citizens of San Francisco.

Again, we have three reservoirs that were inspected by OSHA.

That y'all have done nothing about.

Thank you very much.

Thank you.

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

Ms.

Ram, there are no callers that wish to be recognized.

Thank you.

Item five, report of the general manager.

First up, we have our quarterly audit report for fiscal year 25-26, and that will be Ireland Blackwood.

All right.

Good afternoon, commissioners.

My name is Irella Blackwood.

I'm the audit director for the SAPC.

Thank you for having me here today.

Um may I please have the slides.

Currently, we have uh 35 different audits that are in various stages and is being actively tracked and participating with the audit bureau.

17 are completed.

We have nine that are in progress and nine that are forthcoming.

Next slide.

In the third quarter, three audits were completed.

Critical infrastructure protection and operations and planning reliability standards audit governed by the Western Electricity Coordinating Council, the fiscal year for 2024-2025 single audit, and the phase three of the revenue bond oversight committee audit.

At the end of the third quarter, we had a total of six open recommendations across two different audits.

Two of the open recommendations are in the public integrity assessment procurement audit, and four of the open recommendations are in the Mission Valley Revenue Lease Audit.

In the fourth quarter, we expect to complete the citywide payroll audit.

So no long-term improvements.

Let me know if you have any questions.

Thank you for your time.

Thank you, Ms.

Blackwood.

Any questions, comments from commissioners?

Okay, seeing none, can we take public comment on the quarterly audit and performance review report, Ms.

Nier?

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?

Seeing none.

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

Ms.

Ram, there are no callers in the queue.

Thank you.

Deputy General Manager.

Next up, we have the quarterly budget status report for third quarter of 25-26, and that will be Anna Dooney.

All right.

If you can pull the slides up, just have a few.

Good afternoon, Commissioners.

Um, Anna Dooning, budget director, and I'm here today with the third quarter budget update.

So here's the top line summary.

We're seeing positive operating results for all enterprises and Clean Power SF.

Altogether a steady improvement from our second quarter projections.

So starting with water, we're estimating a net operating surplus of nearly 12 million dollars.

Overall revenues are down due to lower wholesale water sales and the loss of a federal bond subsidy, but this is offset by a bond refunding from last year as well as some expenditure savings.

Moving on to wastewater, we're projecting a net surplus of $6.6 million.

Sewer service charges are down just slightly, which is in line with retail water trends, and this is all made up by higher than budgeted interest earnings as well as expenditure savings on power.

Overall, revenues have improved since the last quarter, though remain slightly below budget due to lower demand and retail sales.

On the uses side, there are significant savings in power purchases due to increased generation as well as lower power supply costs.

Finally, moving on to Clean Power SF.

Revenues are down due to the rate decrease that went into effect in March, but this is offset with savings and power purchases as well as a general reserve that was budgeted to build up reserves.

And I'll also add that despite the conflict in Iran, electricity costs in California are actually down a bit, which is reflected in our power purchase savings.

This is due to the fact that California has significant natural gas reserves, and importantly, the state now has an abundant supply of renewable energy sources.

That's the type of power that we purchase.

And finally and importantly, we are currently exceeding all of our financial policy targets.

And that is it for Q3.

Thank you, Ms.

Dooning.

Should say Director Dooning.

Questions for Director Dooning?

Vice President Leverone.

On the um volume on water wholesale revenues are down budget due to lower volumes.

Yes.

And also the same with wastewater offset by lower volume usage.

Is that a um a timing issue?

Or is there certain points in the year where the volume is what we budgeted or higher?

Or is it are we seeing a trend now again where lower volumes are kind of continue to occur?

So two things throughout the year, there's a different amount of water volumes, largely due to weather patterns.

So we do see differences in trends at different points in the year.

That's not necessarily what is reflected here.

On the sewer side, we're like one percent off.

So that's mostly on budget.

On the water side, wholesale revenues.

So this is from our wholesale customers.

We have seen a slow decline from what we had previously estimated and the amount of water they are buying from us.

Remember the budget now, this budget that we're currently looking at was set over two years ago.

So we've sent we've been seeing this trend over the last two years.

We've now corrected for that in the upcoming budget.

Um so I think you'll likely see less variance in the quarterly reports for next fiscal year.

Um, but that is a trend that's been happening for a couple of years now.

Thank you.

Any other questions from the commission?

Seeing none, can we take public comment, Ms.

Lanier?

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

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

Seeing none.

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

Ms.

Rant, there are no callers in the queue.

Thank you.

Deputy General Manager.

The 2015 Power Bonds refunding results will be presented by Nikolai Skolarlov.

Good afternoon, Commissioners.

This will be a very brief uh presentation to come back to you with results of the financing that you approved on April 14th.

If I could have the slides, please.

And perhaps to give away the punchline right at the beginning, we were very pleased to be able to deliver about $8.5 million of savings based on this refinancing.

As you'll see in a moment, that was even higher than what we were expecting when we presented this to you originally.

I'll try to go through these results very quickly, but this is a relatively small financing of about $26 million.

And because it's relatively small, we again did this as a direct purchase, where we RFP'd banks uh responded and uh responded that they would purchase it directly without an offering document, the POS that takes so much time and expense to put together, and a bond rating.

And Barclays uh was the firm that uh won that bidding and uh successfully priced this.

It's a about an eleven and a half uh year uh average life for this transaction.

As you'll see on the chart here, this shows you interest rates over 30 years, but this is a primarily short transaction.

Interest rates were about the middle of the range for most of the curve based on what they'd been for the past year.

Um but the savings here come based on uh the rates compared to when these bonds were issued in 2015, and we were also able to release the debt service reserve fund as part of this refinancing.

Um the results were we we got a very low all-in interest rate of about 3.74 percent based on uh the market at the time the bonds were sold.

This simply summarizes those results for you.

So when we look at financing, we also measure present value of savings.

We were always looking at the time value of money and converting that in today's dollars.

Those savings are 3.8%, which represents 12 uh percent uh savings, as you know by our policy or commission adopted policy, we uh can complete refundings based on the 3%.

So this is well in excess of the savings by policy.

We did have an independent uh report prepared by an independent uh advisor to uh demonstrate that the pricing was fair as as again required by policy.

We have will also present uh the savings results.

Uh we have presented the results uh to the board of supervisors as required uh by law.

Um again, when we came to you, we were projecting savings of 9.2 percent in the push and pull of the news cycle with uh news about the Iran uh war.

Uh we happened to hit the market on a favorable day and got better than anticipated uh results.

As you can see, this is a small part of the debt service for power.

We also have 2,021 and 23 bonds, but these savings will offset uh future borrowing costs and provide some further flexibility in the budget.

And with that, happy to take any questions.

Thank you, Director Sklarov.

We have a question from Vice President Leverone.

Excellent results.

When we pick the figure 30 million, is that just a when you look at the amount of refinancing available, you look at the 30, we hit 26, almost 27.

Is that because the market didn't want to go any higher?

Or was it just those were really the availability?

It was it was 27 million.

No, 26 was all that we needed to issue in order to refund the outstanding amount because we also were able to apply the former reserve fund that's no longer required.

Okay.

And because we also benefited from premium in the marketplace.

In other words, we issued 5% coupons at a lower yield, and that provided that meant the buyer was paying us a premium for it.

Thank you very much.

Very good job.

Any other questions?

Okay.

Then we can take public comment.

Thank you again.

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?

Seeing none, moderator, are there any callers who have their hand raised for item 5C?

Ms.

Ram, there are no callers in the queue.

Thank you.

Um thank you, Ms.

Linair.

Nothing further to report.

Thank you.

Item six, consent calendar.

Colleagues, is there any discussion on the three items which we find on our consent calendar today?

Commissioner Stacy.

Thank you, President Arce.

I had a quick question on 6A.

Um, we are extending the Brisbane and Guadalupe Valley municipal improvement districts through December of 2027.

I assume that the contract calculates how much they pay us based on a formula.

So as the PUC costs go up, so would the amount that they pay in the meantime.

Is that is that a correct assumption?

Yeah, that's correct.

Uh Joel Prater, Assistant General Manager for Wastewater Enterprise.

Um is correct.

Those rates would increase so that the the our higher costs as they go up overall are born across the across the board, whether it's our in-city customers or or otherwise.

Great.

Actually, one clarification to uh we're extending it through December 2027 or when a new contract comes online, whichever comes first.

Thank you.

And I I also had a question on 6B.

It's really a general question about contract protests.

Um I saw that there were two different protesters on this contract, and um I understand that both the PUC contract division as well as the city chief administrative officers contract management division, they take a look at the protests and assess the validity.

Is it also correct that the the city attorney may be consulted as well?

So that that gives me uh a lot of comfort.

I just wanted to confirm that that my understanding was correct.

Um, I'm with the contract administration bureau at the PUC.

So we do confer with city attorney, we work with our contract and monetary division depending on the nature of the protest, and then come to a determination.

Great.

Thank you so much.

Any other questions, colleagues?

Seeing none, can we take public comment on the consent calendar?

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

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

Seeing none, moderator, are there any callers who have their hand raised for item number six?

Ms.

Ram, there are no callers in the queue.

Thank you.

With that, can we get a motion to approve the consent calendar?

Move to approve.

Motion by Commissioner Stacy.

Second.

With the second by Vice President Leveroni.

President Arce?

Aye.

Vice President Leveroni.

Aye.

Commissioner Jamdar is excused.

Commissioner Stacy.

Aye.

Commissioner Thurlow.

Aye.

Item six passes.

Item seven.

Approve the terms and conditions and authorize the general manager and or city's director of property to execute a purchase and sale agreement and easement deed with associated limousine operators of San Francisco Incorporated.

Hi, Commissioners.

Good afternoon.

My name is Dina Brazil, and I'm the right-of-way manager at the SFPUC.

May I please have the slides.

So I'm here today to seek your approval of a purchase and sale agreement for the acquisition of easements for a subsurface sewer tunnel for the Folsom area stormwater improvements project.

And first, a bit about the project itself.

What we refer to as the Folsom area is the low-lying intermission neighborhood 17th and Folsom.

It was developed atop historical waterways and creeks and has historically flooded during storm events.

Our existing stormwater system doesn't have adequate collection collection capacity to meet the needs of the area.

So we developed the project to add capacity and help alleviate the flooding.

The project also complies with a 2021 California Regional Water Quality Control Board cleanup and abatement order required requiring remedial action on the part of the SFPUC to abate threats of sewer overflows in certain low-lying areas of San Francisco, including the Folsom area.

The project proposes to construct a 12-foot interior diameter wet weather conveyance tunnel depicted here in purple.

The tunnel would be approximately 3,800 linear feet long, running along Alameda, Daharo, and Barrie Streets, between Florida Street and a point near the intersection of 7th and Barrie.

It would convey wastewater flows to the channel pump station where they would then be sent to the Southeast plant for treatment.

For the most part, the tunnel manages to avoid private property, staying mostly within public city streets and Caltrans right-of-way.

The tunnel would, however, cross between or below three privately owned commercial properties within a vacated section of Alameda Street between Florida and Bryant in the red circle shown here.

Alameda Street used to run continuously between Harrison Street to the west and Dejaro Street to the east, but unfortunately for us now, the portion of Alameda Street that lies between Florida and Bryant was closed and abandoned in 1946 at the request of the Rainier Brewing Company, which owned all the property on either side of the street.

The Rainier property was eventually subdivided in 1975 into the parcels we see now and sold to separate entities.

As shown here, our tunnel would cross beneath the three properties along the centerline of what was Alameda Street and now functions as the property boundary between the property to the north and the two to the south.

The tunnel will be installed by horizontal directional drilling, which is a trenchless method with minimal impact.

The tunnel would be approximately 27 feet deep at this location.

While the SFPUC wouldn't require the use of the surface of the properties, we do need property rights in order to install the tunnel below the properties.

We therefore need to acquire a tunnel easement.

Additionally, our engineers determined that we need an additional zone of protection for the tunnel to ensure it isn't structurally compromised by future development of the properties.

We've named that secondary area the restricted development easement.

The restricted development easement would not limit excavation within its boundary, but it would limit the maximum allowable structure loading and require SFPUC's review and approval of future development plans.

The loading restrictions could potentially require costly engineering solutions in order to maximize development.

At this time, we're still negotiating with the two property owners to the south, though we've reached tentative agreements.

We're just working through the forms now, and we hope to have something to present to you for consideration and approval in the coming months.

Right now, the purchase and sale agreement before you is for the acquisition of an approximately 4,500 square foot tunnel easement and an approximately 3,400 square foot restricted development easement on the property located at 1398 Bryant Street.

The seller is associated limousine Operators, Inc.

The negotiated purchase price for the two easements is 1,454,926.

At this property, we are also compensating the seller for the loss of driveway access at Florida Street.

The tunnel would be bored from east to west, and its exit point is on Florida Street, shown very approximately here in red.

The main driveway access to this property is on Bryant Street.

However, the tenant here is a landscaping and maintenance company, and they have a small fleet of vehicles and equipment, and they use that back entry for circulation for their fleet.

And our construction activities would impact the tenant's ability to use that Florida Street driveway for about six months.

Um, but those specifics would be worked out between the landlord and the tenant, and our purchase price actually covers any future compensation that may be paid to the tenant.

I'm now ready to answer any questions you might have about this acquisition.

All right, thank you, Ms.

Brazil.

Questions from Commission Vice President LeBroni.

So that it's just a one-time payment.

That's going to be there that gives us the easement in perpetuity.

Absolutely.

Yes.

Other questions?

Commissioner Thurlow.

Yeah, this is a very, thanks for the presentation.

This is a probably a very basic question, but the entire system that's being developed for the Folsom project is combined the entire way.

Is that right?

It's like a combined or is I because one thing that was a little confusing for me when I was reading it is sometimes some parts of the infrastructure were described as stormwater, and some were described as sewer as wastewater.

Yeah.

It's a combined system.

Yeah.

Okay.

Do you want to elaborate?

Joel operator, Assistant General Manager for Waste for Enterprise.

To clarify, it's part of the combined system.

All the equation would be all, they're all joined to our combined system.

These specific upgrades, though, will most likely provide the most benefit during heavy rainstorms.

Okay.

So while there will be some sewage flowing through it on a daily basis like today, when we see the heavier rain events is really where we'll see the advantage of these stormwater management tunnels and pipes that we're adding.

Okay, that's perfect.

That makes sense.

Thanks.

Seeing none, can we take public comment, please, Ms.

Lanir?

Remote callers, please raise your hand if you wish to provide comment for item seven.

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

Seeing none, moderator, are there any callers who have their hand raised for item number seven?

Mr.

Ram, there are no callers in the queue.

Thank you.

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

Motion to approve.

Motion from Vice President Leveroni.

Second.

The second from Commissioner Stacey.

President Arce.

Aye.

Vice President Leverone.

Aye.

Commissioner Jamdar is excused.

Commissioner Stacy.

Aye.

Commissioner Thurlow.

Aye.

Item seven passes item eight.

Approve an increase of 418 calendar days to the existing duration contingency for contract number HH-1005.

San Joaquin Pipeline Valve and Safe Entry Improvements Phase 1A with Sierra Mountain Construction Incorporated.

Good afternoon, President of Asea and Commissioners.

My name is Jimmy Leon.

I'm the project manager of San Joaquin Pipeline Baffin Safe Entry Improvement Project.

I'm here to seek your approval to increase the duration contingency for the contract, 1,05.

San Joaquin Pipeline Waffen Safe Entry Improvement Phase 1A.

By 418 calendar days for revised duration limit of 1,506 consecutive calendar days with no increase to the authorized contract amount.

This contract, HS 1005, is part of the larger San Joaquin Pipeline VAP and Safe Entry Improvement Project.

The San Joaquin Pipelines are critical transmission facilities that deliver Hathachu water across the San Joaquin Valley to the Bay Area.

The pipelines have been in surface ranging from 14 to 1949 years.

They require periodic entry for inspection, maintenance, and repair.

Safe and reliable isolation is essential to protect staff contractors and the water supply system.

The original Phase 1A contract focusing on pipeline number two, the scope included replacement of underrated valves, installation of removable spool pieces, and related improvements at several key facilities, including Tesla Portal, Oakdale Portal, and the Emory, Rosel, and Pelican Crossover.

In 2023 and 2024, the commission approved contingency increases that allowed this contract to procure additional large diameter valve for phase two, including nightgate valves intended to support safe pipeline isolation.

This valve was procured and tested under this contract, and later installed under a separate phase two construction contract.

Following installation, field operation and commissioning identify leakage and resiliency performance concerns with the phase two night gate valves at the crossover.

Staff take this seriously.

We initiated additional engineering review, operation evaluation, coordination with construction management, and discussion with the contractor to determine an appropriate path forward.

This will require extended time to ensure that our decisions were informed, collaborative, and protective of both personnel safety and system reliability.

This is a time-only request and does not add funding to the contract.

I respectfully request the commission's approval of the proposed 418 calendar day increase to the duration contingency for contract HH 1005 with no change to the contract amount.

I'm happy to answer any questions that you may have.

Okay, thank you, Mr.

Leon.

Questions from the Commission?

Commissioner Stacey.

This may be a difficult question to answer today, but in August of 2024, the Commission approved additional funding for more quality assurance in the field.

Now you're extending the time because you've found that there were some further difficulties, maybe as a result of that, more robust quality assurance, maybe because of other things.

Was it a and again, this may be premature to answer?

Were there manufacturing issues with these parts?

Was it a kind of a system making sure that the system fits together better?

What is the and then and you said you were working out a path forward with the contractor, right?

I just I guess I'm looking for a little more information on the manufacturer to our specs and they have been tested in the factory to our standard that we specified.

So the contractor has fulfilled their requirements.

And the problem we find is after we install them on site, put it in operation.

We find the situation is different from what we envisioned at the beginning.

So that's why we have to have further discussion to coordinate with our operation people as well as the designer to see what will be the best path forward.

As this time, we're still working on the details.

But at the same time, we want to be able to close out this contract because the contract have uh fulfilled it.

They have requirement.

Thank you.

And I I really appreciate this strong attention to safety.

It's really important.

Thank you.

Thank you, Commissioner.

Any other questions?

Okay.

Thank you, Mr.

Leon.

Can we take public comment?

Remote callers.

Please raise your hand if you wish to provide comment for 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 for item number eight?

Ms.

Rand there are no callers in the queue.

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

Move to approve.

Commissioner Stacey moves.

Second.

Commissioner Thurlow seconds.

President Arceus.

Vice President Leveroni.

Hi.

Commissioner Jamdar is excused, Commissioner Stacy.

Aye.

Commissioner Thurlow.

I item eight passes item nine.

Approve an increase of 15 million to the existing cost contingency for contract number HH-1000R, Mountain Tunnel Improvements Project with Mountain Tunnel Constructors Incorporated.

Can you please pull up the slides?

President Arcee and Commissioners, good afternoon.

My name is Randy Anderson, and I'm the project manager for the Mountain Tunnel Improvement Project.

Today I'm here to request an approval to increase the construction cost contingency for contract HH 1000R.

This request is for 15 million due to unanticipated changes and anticipated cost increases above the approved cost contingency amount.

I will also give you a brief update on the project to show you some of the outstanding progress that has been made to date.

This is the overview of the Hetchetchy Regional Water System.

I'm sure you've seen this map many times.

It's showing the location of Mountain Tunnel.

The Mountain Tunnel is a critical and non-redundant component of the system, which conveys water to 2.8 million residents over four counties.

The system also generates over a billion kilowatt hours of clean hydroelectric power annually.

The mountain tunnel is 100 years old and is presently being rehabilitated and updated.

The construction contract had a notice to proceed of January 2021 and a final completion is tentatively set for December of 2026.

This is a six-year construction contract contract with five winter shutdowns of the water flow in the tunnel to allow rehabilitation work to take place inside the tunnel.

We have completed all five winter shutdowns.

Work is approximately 90% complete, but a few issues remain to finish the last 10% of this critical project.

This is uh just showing the project scope of work for the 19-mile long tunnel.

The remaining work now is focused at the priest reservoir for the flow control facility and the priest addit tunnel.

All other project work has been completed or will be completed by June.

These photos are showing the work completed and the ongoing work at the flow control facility building.

They are presently working on completing the roof, as you can see in the upper left photo, connecting permanent power to the building, connecting power from the building over to the addit, and uh running a fiber optic communication line to the priest-control tower, which is going to feed into the moccasin control center.

The yellow beam that you see is the recently installed movable gantry crane beam for future maintenance needs.

The large opening you see with the roof beams will allow any of the valves to be removed in the future if needed, and will also be the entry point to install the last remaining sleeve valve.

The building also houses significant electrical and control equipment that will operate the valves, ventilation system, lighting, gantry crane, among other items.

This shows the critical equipment that's been installed in the bottom of the 150 foot deep shaft, including the four double disc night gate valves called DD KGV, and one of the sleeve valves.

The other water train has a temporary removable spool piece.

That's the uh the one on the on the left side of the photo.

All hetchy water is presently being conveyed through these two trains.

The second sleeve valve is on site and will be installed when the spool piece is installed where the spool piece is presently once we have the permanent power connected to the building and our communication lines installed over the priest reservoir.

The double disc knife gate valves were utilized in our last shutdowns to stop the water from priest reservoir from entering the tunnel on the downstream side.

They will also be used when we put in the second sleeve valve.

This feature allows the priest reservoir to remain full for valve installation, valve maintenance, and future shutdowns.

This is the priest added, and we're nearing completion on this.

This is the 1,000 foot-long addit that connects to the mountain tunnel that provided access during our in tunnel construction, and it will be used for future maintenance access.

You can see the large bulkhead door on the right side at the end of the addit, and the entry, the portal that has the year stamped 2026 on the photo on the left side.

This is an example of the demolition and repair of the concrete lining, which was done during the shutdowns.

I am happy to report that all the lining repair has been completed for the 11 miles of tunnel.

To put that in perspective, that would be a similar distance between this building here and downtown Oakland inside that horseshoe tunnel.

So it's it's quite a feat of work that's been accomplished during the shutdowns.

We have successfully upgraded the inside of the tunnel, resulting from 100 years of concrete deterioration and met our project objective of another 100 years of service for the tunnel lining.

I would now like to discuss the reasons why the contingency needs to be increased.

There are four main buckets that are driving the need to increase the cost contingency.

The first one is related to changing the contract shutdown date for shutdown number five due to operational requirements for water supply from Hetch Heshi Reservoir.

We had a late start, and then we were called for an early finish with that shutdown number five.

The second bucket is related to electrical upgrades, design changes, uh getting the uh the fiber option optic communication requirements, and this has delayed the installation of the final sleeve valve and initial commissioning of the system.

The third bucket is related to an ongoing delay to perform the final commissioning of the valves due to additional work that is needed from the D-scoping of South Fork.

We are planning to issue a notice to proceed for a JOC to install pressure sensors in Big Creek and Second Garodi shafts so the inside tunnel pressure can be constantly monitored to ensure that the South Fork location remains within operating pressures.

This work will push out the final commissioning and already has of the system, and we may need to slightly extend substantial and final completion to accommodate this JOC work.

The final bucket is required to fund additional change orders from previously completed work that are presently being evaluated and negotiated with the contractor.

This page shows the contract financials, including the original contract amount and contingency, the contingency increase and contract reduction.

The commission approved in January of 2025, modification number 17.

Change orders approved to date, modifications one through 16 and 18 through 27, the current total contract amount, the remaining contingency, and the requested additional contingency of 15 million, and then the proposed total contract limit of 165.17 million.

I would be happy to further discuss any portion of the presentation or take any questions.

Thank you, Mr.

Anderson, and thank you because I think for all of us who've had the chance to be up there and and see the project and see the work with with you and with the team know that we're going into areas that haven't been seen in in some cases for 100 years, and so I think I at least speaking for myself could could completely understand the the nature of finding unexpected needs with respect to this really really important project.

So uh questions from commissioners?

Commissioner Stacy.

Thank you.

I really I want to echo what President Arce just said.

Um there are some really tricky locations uh along this work.

And uh I I appreciate that taking out the South Fork scope of work isn't a simple deletion that you've really got to think about how to make the system work and keep that operational in the meantime until we move forward on on that specific project.

But that was a I toured it maybe six or seven years ago.

It's a really tricky location and very difficult work to be done.

I also just wanted to say I really appreciate how detailed your presentation is with explaining the need for the additional um funds for the contract.

It's very helpful.

Thank you.

Thanks.

Vice President Leverone.

Um, just for my I was just a little confused.

It's a 19 mile long tunnel.

And then I I heard there's 11 miles.

The uh additional eight, was that done previously or am I just missing some?

No, it was just in a different geological formation that didn't need the concrete lining.

Okay.

It's in it's in more solid granite and that that eight miles that doesn't have the the concrete lining.

Okay.

Okay.

Um and then on modification number 17.

Was that a re reduction of 15 million?

Uh on your yes, modification number 17 was um taking out the South Fork and and some added road work, and so we did a contract reduction for that.

And at the same time, I I uh the Commission approved additional contingency of 13 million.

Okay, okay.

And so overall uh from day one to what we're looking at now completion, pretty close to completion, about a 26 million dollar increase from day one of the contract all the way through.

And so right now we're at about 26 million in contingency, and then it would be 15 million more for the request today.

So what about 41 million?

Okay, I'm missing a number of so the original contract amount was I want to call it 139.

Yes, and then total proposed contract bottom line there, it looks like to be 165.

So are we going 15 above the 165?

I don't think so.

No, so the original contract was was 138.

Okay, okay.

We we uh and and we had 10 percent contingency.

So that put it the cost limit at 152.

Right.

Um we added another 13 million in contingency, and we took away fifteen point seven million in the construction contract.

Now we would be adding 15 million, which would get us to 165.

Got it.

Thank you.

Perfect, thank you.

All right.

Any other questions?

Can we take public comment?

Mr.

Anderson.

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

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

Seeing none moderator, are there any callers who have their hand raised for item number nine?

Ms.

Ram, there are no callers in the queue.

Thank you.

All right.

With that, can we get a motion to approve item nine?

Motion from Commissioner Stacy.

Second.

Second from Vice President Leverone.

President Arcee?

Aye.

Vice President Leverone.

Aye.

Commissioner Jamdar is excused.

Commissioner Stacy?

Aye.

Commissioner Thurlow.

Aye.

Item nine passes.

Item 10.

Approve an increase of 360 calendar days to the existing duration contingency for contract number WD-2895, San Francisco Zoo Recycled water with Masset Engineering.

Good afternoon, Commissioners.

Barbara Palacios, project manager, Infrastructure Division.

The item before you is requesting your approval to increase the construction duration contingency for contract WD two eight nine five San Francisco San Francisco Zoo Recycled Water.

Additional time is needed to complete the project due to the procurement of long lead electrical equipment.

This includes a power meter load center, which was changed through a design revision mid construction.

And it also addresses electrical and instrumentation work that was part of the base contract that is also delayed.

Any questions?

All right, we have no questions.

Is there any public comment on this item?

Ms.

Rand or Ms.

Remote Callers, please raise your hand if you wish to provide general.

Sorry, if you wish to provide comment for item number 10.

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

Seeing none.

Thank you.

All right, that being the case.

We want to get a motion to approve item 10.

Move to approve.

Motion from Commissioner Stacy.

Second.

Second from Commissioner Thurlow.

President Arceus.

Aye.

Commissioner Thurlow.

Aye.

Item 10 passes.

Item eleven, communications.

The commission takes note of the communications that we have received.

Item 12.

Items initiated by Commissioners.

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

None.

Item 13, adjournment.

The meeting is adjourned at 2 21 p.m.

Thank you all.