Francisco Public Utilities Commission will now come into order here.

Vice President Leverone?

Here.

Commissioner Jambar?

Here.

Commissioner Stacy.

Here.

Commissioner Thurlow.

Here.

You have a quorum.

All right.

Let's go ahead and take a look here at our first item.

But before we do, 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 Alone tribe and other familiar 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 Moek Maalone 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 Mowek Maloney 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 minutes of May 26, 2026.

Okay, colleagues, are there any corrections to the minutes of May 26, 2026?

No.

All right, seeing none, can we 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?

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

Oh, sorry, Miss Ms.

Ram.

Yes.

Ms.

Ram, there are no callers in the queue.

Thank you.

All right.

Thank you, Ms.

Ram.

And so with that, can we get a motion to approve the minutes of May 26, 2026?

Motion to approve the minutes.

Moved by Commissioner Jamdar.

Second.

Second from Commissioner Stacy.

President Arce?

Aye.

Vice President Leverone.

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 Commission's jurisdiction and are not on today's agenda.

Members present who wish to speak are encouraged to complete and submit 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 members are called to the podium to speak in the same order that cards are received.

Thank you.

I want to remind members of 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 refrain from the use of profanity.

Thank you.

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?

We have Mr.

Francisco de Costa.

We are living in very dire straits.

I have a lot of documentation.

Y'all don't seem to understand that confined space needs training.

Most of y'all have not read the policy.

Most of y'all don't know that y'all have a recent policy.

Confined space cases are very difficult.

And if y'all are charged, y'all will have to pay a big fine.

I know it's not your money, it's taxpayers' money.

Let me tell you, Commissioners, when I fight for the employees, I win.

So I don't want to be rude.

I got empirical data.

I got the best employees.

I'm talking to OSHA.

OSHA agrees with me, and that's all I'll say.

You have time to do the right thing.

Our employees must be treated as human beings.

Our employees must be treated with respect.

Thank you very much.

Thank you, Mr.

DeCosta.

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

Ms.

Ram, there are no callers in the queue.

Thank you.

Item five, report of the general manager.

Thank you.

Uh Ms.

Ram.

Item 5A is the annual uh capital financing plan report from Nikolai Sklarov.

Good afternoon, Commissioners.

I never dreamed that the capital finance plan would bring a standing room only audience.

I'm joined today by my uh colleagues on the capital finance team.

They're the ones who look like they just walked out of one of the wedding parties uh here dressed in suits.

So uh we all appreciate the opportunity to present the plan.

Historically, this plan has been presented to you during the fall.

This year we've worked very hard to bring it to you before the new year begins.

Each year you adopt a uh 10-year uh plan in February.

What we need to do each year is break that down for how the timing of those financings will work during the course of the year and how they'll fit in with everything else that we do in our capital program.

If I could have the slides, please.

As you know, we have considerable amount of debt already in place, uh, approximately 11 billion dollars, as well as uh federal and state loans that we have yet to draw upon.

And you've approved significant financing plans in the future.

In addition to the exciting business of issuing new bonds and coming before you, there are a lot of other things that our our team also works on.

In particular, we're continuously monitoring with the help of our municipal advisors and investment bankers the opportunity to refinance the debt that's already been issued in the past uh to further reduce our rates.

We also manage three commercial paper programs and a large interim funding uh program that across three enterprises is 2.45 billion.

Together, those uh programs each allow us to reduce the cost to our ratepayers by first uh adopt uh implementing contracts with our lowest cost form of financing, which is credit facilities, then paying for those costs on an incremental basis, not by accelerating bonds, but instead doing small batches of commercial paper, and then only issuing the commercial paper when we truly need to, and thereby managing uh our rate impact.

As you know, in uh February you adopted uh these 10-year plans for debt financing.

As the year progresses, we continuously monitor not only how contracts are being let, but also how cash is being spent.

And we adjust the timing as much as we can to reduce the impact on ratepayers.

So, for those of you who may recall, our financing plan, for example, called for a very significant $931 million wastewater bond at the end of this year.

We've managed by accelerating our Whitfield loan draws and based on the spending to defer that until next year, so that will uh not appear in rates for one year uh longer.

In addition, we've managed to design the financing itself in a way that further defers that uh financing into the next calendar year.

Those are the examples of the way those 10-year plans can be adjusted to further reduce rates and come to you with recommendations for financings that have even less uh rate impact.

This is a quick depiction of our outstanding debt.

Of course, we borrow at very low uh cost by maintaining high ratings as provided for in the city uh charter, and one of the important activities of our team is to help manage that rating uh process, and we will be again coming before the rating agencies in the next month.

Uh this outlines some of the work that we do as the year progresses.

We obviously are continuously monitoring uh interest rates.

As you know, this year interest rates have been extremely volatile, and frankly, we don't have the luxury of waiting for our financing.

I would think of our three enterprises as giant furnaces that we're continuously trying to keep the engines uh running on.

Uh, but as you can see pretty dramatically with this chart, from the beginning of this year to just this past month, the outlook for rates has changed very dramatically, and so we are modifying our plans to the extent that we can to further reduce those interest rate impacts.

So let me quickly outline what we've got planned uh for you.

Uh we later in this agenda, we will present the last financing of last year's plan, which is a refinancing opportunity, but in the new year, we will come back to you on July 14th with disclosure training uh with our disclosure council in anticipation of a very full uh agenda on July 29th.

At that meeting, we will come to you with the first uh wastewater bonds.

We've been able to reduce the size of that first waste wastewater bond in the summer and defer the bulk of the bonds until approximately January to further reduce our rate impacts.

We will also come to you at this time with refinancing opportunities, both for interest rate savings as well as risk mitigation.

On that same agenda, we'll come to you also because you are dark in August, it's a full agenda that uh meeting uh with various credit facilities that we need to renew, and we will also implement uh or propose to implement the last 125 million dollars of capacity that the Board of Supervisors approved at the end of 2024 for our wastewater enterprise.

In addition, uh we have financings for wastewater.

Our uh loans and grants team has been working uh together with us on uh SRF uh financing that will be coming to you, as well as a small financing for water.

This is intended to refinance outstanding commercial paper, not in order to give us more capacity to let contracts.

The next bond financing of 1.1 billion dollars is scheduled in fiscal year 2028, and rather than accelerating that, we've come up with a plan with our municipal advisors for a small refinancing of commercial paper that will provide the capacity for uh contracts to be let and avoid accelerating that bond transaction.

We and lastly, on this uh plan, we are continuing to work on uh debt policy updates.

Uh specifically what we're doing, the SFPUC has historically had a very long debt policy because it merges policies with procedures, and we will come to you with a document that we think you can and ought to, based on best practices review each year of a policy, and the procedures uh will remain but will remain as a separate document.

But we have a number of updates that need to be made uh to uh conform with best practices and just changes within the organization.

Uh one of the important themes this coming year is going to be uh continuing to mitigate risk.

We'll talk a little more about that later in this uh agenda around the build America bond subsidy and how we propose to continue refinancing those obligations just as you approved for the water bonds last year.

We're also continuing to study expansion of financing tools, especially around how um uh the alternative water supply program could potentially be financed.

How we might be able to uh facilitate uh lower rates for clean power SF as well.

Uh our green bond program uh continues.

Earlier this year, we and the entire uh uh market were surprised that Sustainalytics, which has been verifying our green bonds, withdrew abruptly from the market, they are uh division of Morningstar, but it's giving us an opportunity to reevaluate best practices on green bonds, and we will be coming uh back to you to propose uh additional changes.

And then the last thing I'd uh add to that is that part of our green bond program is our green bond reports, and we will be updating those to demonstrate the impact uh to the marketplace of the investments that you are approving and making uh to each of our enterprises.

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

Thank you, Mr.

Sklarov.

Questions from the commission?

Uh Vice President Leveroni has a question.

Thank you for your thank you very much for your report.

It's always very interesting, as you could tell by the as you mentioned, the the throngs that came out to listen to you, and I can understand why.

Um couple of questions.

One is um uh the total if we did use the entire availability of funds that we have, does that push us out to 13 or 14 billion?

If am I because I what I was looking at was that we have access, though we haven't drawn down of 1.7, 212, and 333.

So it's about 2.2 billion of um funds that we have accessible to us.

Is that am I wrong with that number?

So there are a couple of things to bear in mind.

Um is you approve uh projects, and then those go to the Board of Supervisors and are put on uh controllers reserve and then released as we demonstrate the ability uh to enter into those financings.

But as we sell into the marketplace, the relationship of interest rates to the coupon on the bonds can also result in in premium to us, and that's what we're seeing now, so that we're often able to issue bonds with proceeds that are in excess of the bonds that we're issuing, and so reducing the size of what our borrowing actually ends up being.

Okay, thank you.

And then you've done the last two times that I've been on the commission, you've been able to uh achieve some significant in my mind savings.

I think one time was fifty-five uh million, and then another probably I think thirty-three or somewhere in there, 30 million.

But it seems that that money then gets, well, it's a savings and very warranted.

Does that then get pushed back in to be used on other projects or is it a true re reduction in in the dollar amount?

So uh, Commissioner, what what happens is when we are refinancing bonds, we we are uh producing savings in each of those future years, and that becomes a layer of availability that is then used for new new projects without uh without um raising rates as much as they would have otherwise been.

Um so it's it's always to the good, uh, but unfortunately it doesn't produce a sudden drop in our bills.

Okay, and with that in in mind that we're you know doing that and successfully thanks to to your hard efforts.

Um, is there um, so when we approve items, are are we at some point looking possibly at increasing the unused dollars so that we could end up going to a twelve billion dollar or thirteen billion dollar um outstanding debt, uh or is it always kind of like saying the next couple of years that we're looking at at that 11.9 12 billion dollar uh level of borrowing?

Unlike most other agencies, we don't come to you with a project and a financing at the same time, right?

And so you will always approve uh the projects, uh and then we are trying to simply finance it the most efficient way possible, but uh we're not we're not looking to redeploy that specifically.

Okay.

And then last question on the SP with the um the AAA negative, um is that something that we think might I'm sure we're working on to turn to a stable, but what's your thoughts on that?

Uh uh your very uh very perceptive question um because we have the wastewater bond on the agenda for July 28th, in anticipation of that.

We are working very actively right now on preparing to present to the rating agencies those bonds, and we expect that the general manager, our CFO, and others will all be uh part of those presentations.

Thank you very much.

Very helpful.

Thank you.

Any other questions?

Okay, Ms.

Ram, can we take public comment?

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

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 5A?

Mr.

Rabb, there are no callers in the queue.

Thank you.

And thank you, Mrs.

Klarhoff.

Thank you.

Uh Mr.

President, item 5B is a wastewater enterprise capital improvement program quarterly report.

Bessie Tam will be presented.

Good afternoon, Commissioners.

I'm Bessie Tam, the Wastewater Capital Programs Director.

Um, here to talk about the quarterly report.

May I have the slides, please?

Great.

Uh this is a photo of um our C cliff number one pump station showing an underground palm station vault being installed underground.

Um always we want to highlight some of the construction projects that are underway right now.

On the far left is our Channel Forcement Inter Thai project that's continuing on at the intersection of um Indiana and the Caesar Chaves.

Um fantastic project that's going to be uh providing a dry weather bypass for our Channel Force Main uh project, uh force main asset, rather.

Um in the middle is another C Cliff uh project, is C Cliff number two, Pump Station Force Main Project.

Um here the contractors are welding uh HDPE high density polyutherine pipe for the force main industry.

And last but not least on our far right is our new operation engineering and maintenance building that's under construction at the South East Treatment Plan.

This is the familiar pie chart with our commission.

So currently in the $9 billion program that we have, you can see about half of the program budget has been expanded.

And we are proceeding with the remaining 4.4 billion dollars, and the projects that you see here.

The forecast cost that you see here in this quarterly report does match the budget that was presented to the commission in February of this year.

Similarly, for an RR program, there are no variances over the reporting period.

And again, the current forecast cost reflects what you have already approved in the February budget.

In this past quarter, we've been busy.

You can see we have achieved 17 milestones in various projects throughout the program.

And then so moving on in the next section, we're highlighting a couple major projects at the Salvies plant.

The BDFP project, the Biosolus Digester Facilities Project continues.

The two major contracts that are remaining under this project is the CMGC, the construction manager general contractor contract, and you can see the progress here.

We also have a second contract that we let out, which is a design built project for the biogas utilization.

And that one we have achieved 100% design.

And because it's a design built, the contractor already started some of the construction work, including the installation of the underground utilities and electrical conduits.

Our new headworks project is really at the closeout phase right now.

We are called forecasting a slight cost savings in the overall project that is uh, you know, as we are winding down on the all the contracting and closeout work.

Um one of our new large projects that's coming up in the program is the Salvi's plant nutrient reduction project.

Uh the progressive design build contract was awarded uh to JCUS PCL joint venture with um approving the preconstruction services earlier this year, and we are proceeding towards issuing NTP for the Progress Progressive Design Builder, and they have been great in terms of already coming on board and engaging and partnering with city staff to get this project going.

And with that, I just wanted to let you know Nikolai and I work very closely together, and he always reminds me to make sure I spend the ratepayers' money wisely, and we definitely you know do that.

So I'm gonna open up to any questions for the commissioners.

Thank you, Director Tam.

Is there a questions from the commission?

Uh Vice President LeBroni.

Just a comment.

Thank you very much.

Even though you said it's a small savings to me, $10 million is significant.

So thank you very much for um going through and and saving that uh project money.

Thank you.

Commissioner Stacey.

Thank you, and thank you for the update.

When we get these quarterly updates, the question that always comes to my mind is where did we start and where are we now?

And that's a longer trend.

And I know that uh certainly you and Mr.

Robinson have uh and probably Ms.

Miller too have told us that often the budget that we start with is when we have the least amount of information about a project.

But the variances that you show are really in these quarterly reports, are really variances from a project budget that we may have been amending in the past.

So the variance really is just from the current approved budget.

That's my understanding when I look at the quarterly report that you give us.

So it doesn't necessarily reach back and tell us where we started relative from the beginning.

And I'm not sure how informative that will be, and certainly when you come to us with amendments, we see that in your staff report.

So that's helpful.

But it's always just a question in my mind.

It's really important to see these quarterly reports, but I I'm always interested in being reminded in how intense is the upward pressure because it is generally an upward pressure on budgets.

But I really I appreciate every amount of savings that you show us.

I know you work really hard on maintaining those savings.

I just wonder if there's a report that I'm not thinking of that might show me that sort of macro picture and not necessarily the project by project reports that we get when there are amendments.

Yeah, and and um Commissioner Stacy, what I'm hearing is uh you're correct, the variance that we show compares what is the current forecast on our projects, right, rolled up into the sub-programs, what is the rolling capital or R, against the latest budget that the commission and oftentimes the board has approved.

So currently the comparison is with what the commissioners have, and the board has previously approved in the mid-budget cycle, yeah.

Um, what I'm hearing your questions are like where where do we start in the kind of the beginning of their project, and for many of our projects, we're you know decades, right, in the making.

So and so your questions are where where do we start kind of on the project level and then maybe rolled up into the program and where are we now, right, comparing to that?

The the challenge is that because we have the rolling 10-year CIP, so where as we move along with adding projects from the program perspective.

Now, for the project's perspective, um, we do implement best practices in terms of re-baselining the projects.

Us we get better different definition of the projects.

So from a project to project perspective, we could, you know, find that information on the project level.

On the program level, it's going to be a little bit um challenge more challenging to compare apples to oranges because we are initiating new projects to meet the needs for you know wastewater enterprise.

So I think we can certainly think on that, maybe have more conversations and see what we can what we can do.

Thank you.

I really I appreciate that, and I I don't mean to create more sort of uh paperwork for you.

It would just it's a question that comes up as I go through the quarterly reports, and I really appreciate that you go project by project and you talk about issues and challenges project by project, so that gives us a sense of you know what they have been and and what they currently are this quarter.

Um thank you for the report.

I had a specific question about the nutrient reduction project.

Uh I assume that we will be um that is sort of a project that will evolve as we get more information about what what further reductions we may have to take in the future with the permitting process as it moves through on the regional and state level, and so the numbers that we're seeing now don't necessarily take that into account, but that it has the potential to sort of evolve and remain flexible.

And may I ask when you said reduction?

Do you mean the nutrient reduction?

Nitrogen in terms of the nitrogen reduction.

Yeah.

I was just using the name that I saw in the report.

But it is nitrogen, certainly, but I thought there could also be other reductions that we uh Joel Prater, Assistant General Manager for Wastebury Enterprise.

Um the new shear reduction project at Southeast right now is going to address nitrogen because that's what um is in the current iteration of the permit, the basin plan permit.

And so we have targets that we know we need to hit um within the current window.

Uh the project is addressing those targets, but we we anticipate that potentially in the future those pro those limits may be dropped, perhaps based on science and future future iterations of what's going on in the base.

So we have tasked the project team with giving us a project that can be modified in the future if need be to address those more stringent limits or even population growth, and as that changes, and so that's one of the main objectives that we have the project team looking at is those potential for future changes.

But we do have current targets in place for the current iteration of the next nine years from now.

That's you've answered my question very well.

I just was sort of looking ahead as to what might change, and that's good to know.

We're trying to anticipate that.

Thank you.

Thank you, Ms.

Tam.

Thank you.

All right.

If there's no other questions, can we please take public comment, Ms.

Ram?

Yes.

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

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

Mr.

Francisco de Costa.

Commissioners, at one time we had uh project manager Karen Kubik.

We miss a lot.

You commissioners should make every effort to involve the people of the Bayview, that this huge projects are being conducted, and where we were promised that every six months the people, the community would get some sort of a report.

The two uh I know Steve very well, Steve Robinson, and I know uh Ms.

Stang um pretty well, you know, from time to time I talk to her.

Very uh diligent project managers who are doing their best.

What we need to pay attention to is in the times we are living, the tariffs that have impacted us, and uh El Nino, which will bring heavy floods to our area and will impact a lot of our environment.

Some areas of the world will have heavy floods, and other parts of the world will have a surge of fires, commissioners are living in the year 2026.

Well, citizens should be informed.

Yeah, going backwards where some people are making decisions, and they think they know it all when they don't know it.

Remember, we started with six billion, yeah.

Now $15 billion.

Thank you for your comment, Mr.

DeCosta.

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

Ms.

Ram, there are no colours in the queue.

Thank you.

Thank you, Ms.

Ram.

Uh item 5C is always something that's a little bit uh uh melancholy.

It's celebratory, but it's melancholy because we are are celebrating people's longtime contribution to the PUC.

So today we have four employees.

Uh we're doing an employee retirement recognition for 25 plus years of service.

And uh I know that uh Nikolai thought all those people were here for him, but let's be real, they weren't.

We know why they're really here, and it's to celebrate the great work done by four stellar uh employees.

So I'm gonna go through them uh individually, Commissioners.

Uh and they are um, you know, they demonstrated the highest form of commitment and pride in public service, and today we honor and congratulate them for their exceptional contributions.

So I'm gonna go through them uh each individually, uh, invite them each to come up and say a few words and uh then uh ask them to remain for uh a photo photos after we complete uh all four.

Our first uh honoree is Terrence O'Sullivan.

Whereas over the course of a 41 year career, Terrence O'Sullivan has served the SF Public Utilities Commission with distinction for 38 years, focused on helping the agency achieve its clean energy objectives, and with past recognitions, including a San Francisco Board of Supervisor Certificate of Honor, SFPUC's O'Shaughnessy Award, and commendation by the San Francisco Municipal Green Building Task Force, and whereas Terry was a key member of the SFPUC's Bureau of Energy Conservation in the 1980s and 90s, whose published energy policy work including, quote, an energy plan for Mission Bay, close quote, energy planning for economic development and the sustainable city, bolstered San Francisco's reputation as a national leader in energy policy and planning, and whereas Terry has been a dedicated innovator and contributor to the evolving clean energy field, including being project lead for San Francisco's adoption of the nation's first commercial building energy retrofit ordinance and authoring numerous published reports, including two peer-reviewed papers for the respected American Council for an energy efficient economy, and whereas Terry developed and managed energy programs that supported essential San Francisco public facilities, both large and small, including San Francisco General Hospital, the Port of San Francisco, the Salesforce Trans Bay Transit Center, and many others.

And whereas Terry was a key contributor to San Francisco's innovative approach to increase the scale and efficacy of municipal building energy retrofits, this initiative built on streamlined energy engineering and job order contracting for energy upgrades to create the foundation for SFPUC's still active direct install municipal energy retrofit program, which has served as a model for other public agencies across the state.

Whereas Terry has been a leader in the SFPUC Power Enterprises Energy Program Planning and Policy, including as technical lead for Hedgehog's energy efficiency targets and for the utilities energy savings reporting to the California Energy Commission, also as frequent uh budget and reporting lead for Powers Energy Efficiency Programs, and as lead staff for developing HECHI's energy program priorities as part of the then newly formed customer programs team, and whereas Terry has maintained his focus in productivity for clean energy programs throughout his long career, including developing and managing Hetch Hechi Powers Upgrade for Savings Incentive Program, Hechechi Powers Green Tariff known as Hethechi Power Premium, Clean Power SF's peak day partners, and pivoting to clean clean transportation, SFPUC's largest current customer program, EV Charge SF, and now therefore be it resolved that this commission hereby expresses its profound gratitude and appreciation for Terry O'Sullivan's many contributions to the SFPUC, the city and county of San Francisco, and the wider natural environment we all share.

We wish him all the best in his retirement and future endeavors.

Congratulations.

Kerry, please say a few words.

Thank you to the uh the commission, and the general manager for continuing this uh this tradition of honoring longtime employees and thanks to friends and former colleagues who made time to be here today.

Uh and thank you for the opportunity to um to say a few words in this honored setting.

Uh way back in 1979, as a undeclared college major in an environmental engineering class, I was introduced to the daunting concept of global warming, but also uh renewable energy and energy conservation, and it felt amazing.

The it was why wasn't everybody talking about this?

Um, so I was 19 years old and uh found my purpose and my career, and five years later, I had the opportunity to begin work as a research assistant for the then still new uh Bureau of Energy Conservation uh founded here in the SFPUC, and that began 41 years in what today is called the clean energy field, with all but three of those years here at the SFPUC.

Uh it's a career that spans almost the entire history of San Francisco's clean energy program, and I'm really grateful to the SFPUC and to the City of San Francisco for providing me an opportunity to work on this fascinating and important work for all these years, and it's been uh a gift to have a career um serving, excuse me, the public and this planet, and over those 40 years of observing uh SFPUC's uh clean energy program, I've witnessed some some highs and some lows.

Uh one high point was that in the 1990s, and this was referenced um uh San Francisco had one of the leading clean uh energy offices in the country, uh as a city energy office.

We had a young talented team with a great leader and mentor, uh, and that office developed innovative programs like the commercial energy conservation ordinance and the energy and economic development plans, and along with Austin and Portland and San Jose, some of the foundational work in what would become urban sustainability.

Um, the leader of that team, John Deacon, is here today, and I'd like to honor him and recognize him as a true hero of San Francisco's uh pre-national program.

Also here today is another unsung hero, Christine Vance, who is my work partner for 20 years in the 90s.

Our um analysis showed that San Francisco's uh uh then current energy budget and methods would require 30 years just to install 1995 technology into our municipal buildings and Chris spent the rest of her career dedicated to how to scale up municipal energy retrofit through federally funded grant funds and many years of effort.

Uh Chris led the development of what became that first municipal uh energy retrofit program based on job order contracting.

We presented to two major uh conferences, and at one point during the Gavin Newsom years, uh we had more than a hundred multi phase uh energy retrofit projects under development or construction.

And SFPOC's current energy program team led by Daniel Young is as strong as those innovative and productive teams of the past.

And the related distributed energy resources program is likewise packed with talent and capability.

So with whatever standing I have based on my experience here to request or advise this commission, I would urge that the SFPUC continue its commitment to the public and to the planet by supporting these programs through what are undoubtedly difficult times ahead.

Thank you for this honor.

Next we'd like to recognize Glo Chrysostama with the Customer Service Bureau for her 37 years of service and we have an honorary resolution that I'd like to read.

Whereas Glorina Glow Chrysostama provided over 37 years of exemplary service to the city and county of San Francisco since January 1989 and whereas Globe began her career with the San Francisco Water Department now known as the San Francisco Public Utilities Commission and the Customer Service Bureau as a temporary meter reader and ascended the ranks to a water services inspector in 1992 a senior water services inspector in 2008 new installations and capacity charge manager in 2013 and as chief water service inspector since 2018 and whereas as chief water inspector service inspector GLO is responsible for field services operations of all types for consumer water services meters connections and fixtures including the field testing and repair of meters and determining illegal uses of water supply water quality pressure noise damage and other faults and whereas during her tenure GLO assisted in updating the customer the customer care and billing system and leading the new service connection process improvement project she was also part of the core team during the conversion from manual to automated water meter project as well as automation of field service work order management system and meter reading automation and whereas in each of her roles GLO was an exceptional leader.

She performed her duties and responsibilities effectively and efficiently possessed strong work ethic maintained a positive attitude was well liked and respected by her staff and peers she consistently produced high quality work with admirable dedication and whereas on July 1 2026 GLO will retire from SFPUC after 37 years of exemplary service now therefore be it resolved that this commission hereby expresses in sincere appreciation and gratitude to Glorina Chris Stoma for her contributions to the SFPUC and be it further resolved that this commission wishes GLO a long and prosperous retirement.

Congratulations thank you for the kind words and thank you for keeping that short I'm going to keep this short because I'm not much for words but um thank you for the opportunity I've been very fortunate to work with such wonderful people here at the PUC throughout my career I'm very grateful and blessed CSB field services will always be my extended family.

Thank you.

Thank you.

Next we'd like to recognize Howard Fung with the infrastructure bureau for his 26 years of service whereas Howard Fung has served the city and county of San Francisco with distinction for over three decades initially with the San Francisco Public Works Bureau of Engineering with the last 26 of those years dedicated to the San Francisco Public Utilities Commission's infrastructure division and whereas Howard began his career his career in the SFPUC's project management bureau as a junior project manager and rose through the ranks as regional project manager and ultimately concluding his impeccable journey as bureau manager, demonstrating integrity and excellence at every stage.

And whereas Howard demonstrated unparalleled expertise and institutional knowledge and capital project delivery and steadfast dedication to public service, and whereas Howard's unwavering commitment to delivering quality earned him both respect and affection from colleagues across the organization, and whereas Howard consistently brought balance, kindness, and steady judgment to conversations that occasionally featured strong personalities, and whereas under Howard's leadership, the SFPUC's project management bureau has evolved significantly, supporting implementation of the comprehensive 10-year capital improvement plan, which has grown from millions to billions of dollars in essential infrastructure investments, and whereas throughout his tenure, Howard has mentored countless professionals and always had his door open to the team where he shared his knowledge of municipal project management practices and the intricacies of San Francisco's capital project delivery process.

Whereas Howard not only served as acting deliver acting capital program director in addition to his day job on multiple occasions, but also carried out the demanding roles simultaneously for extended periods with unwavering resolve and without complaint.

And whereas Howard's masterful stewardship of the SFPUC's project management bureau has positioned the agency for continued success in delivering critical infrastructure improvements that will benefit San Francisco residents for generations to come.

Now, therefore, be it resolved that this commission hereby extends its deepest gratitude to Howard Fung for his exemplary service, his lasting contributions to the city's infrastructure legacy, and congratulate him on his well-deserved retirement.

Many uh many people that know me, I'm not a big speech person.

Um I started here 35 years ago, had a full head of hair and a young buck, uh, ready to jump in and do all the work that that uh you know uh was required.

I I've been um blessed and fortunate to work for such a world-class organization, uh, which talented, talented people, many of which are behind me here.

Um I um want to look back.

Uh I've uh been able to uh work on some wonderful projects, uh probably worked on every local water pump station, storage tank, reservoir, worked on many of our wastewater treatment plant facilities and pump stations and all the EFWS uh plants, uh, pump stations and reservoirs in the city as well.

Uh I think if you look back, if I look back, um, I see that we work here uh to do the little concrete things, you know, to deliver water, drinking water, fire protection, take care of the toilet flushing, uh, and bring the lights on in the city.

So I think uh I've been blessed and fortunate to work with just wonderful people, and uh I'll leave it at that.

Thank you.

And last but not least, uh Mr.

President, we have a special retirement recognition uh to celebrate today in honor uh our very own Assistant General Manager Barbara Hale with the Power Enterprise for her 21 years of service.

So whereas Barbara Hale exemplifies what it means to be a true public servant, dedicating more than 35 years to public agencies, including the last 21 at the San Francisco Public Utilities Commission, where she was the first ever assistant general manager for the power enterprise, and whereas Barb has been a pioneer in advancing climate action and clean energy, launching Clean Power SF, our community choice aggregation program, which now celebrates 10 years of delivering cleaner energy at affordable rates to more than 385,000 residents and businesses in San Francisco, and whereas BARB's long-term vision enabled significant capital investments and expansion of power infrastructure, which helps strengthen system reliability, advance clean energy goals, and ensure the long-term resilience of San Francisco's publicly owned power system, and whereas BARB has led the power enterprise in the most recent effort to expand the benefits of public power to all San Franciscans through ownership of the electrical grid in San Francisco, pushing the project further than ever, and establishing a solid, a solid foundation to achieve the historic goal of full public power in San Francisco.

And whereas Barb's leadership has extended beyond San Francisco, helping to shape energy policy and public power practices across California by serving as the first president of the California Community Choice Association, being a founding member of the Association of Women in Water Energy and Environment and the California Community Power Agency and providing board leadership on the California Municipal Utilities Association.

And whereas Barb's distinguished career has been defined not only by her professional accomplishments, but by her exemplary leadership and integrity as a thoughtful mentor, trusted advisor, and selfless steward of the public good, whose dedication and generosity of spirit have inspired staff at all levels and left an indelible mark on colleagues, communities, and the SFPUC.

And whereas Barb's leadership has laid a durable foundation for the future of public power in San Francisco, positioning the power enterprise to continue advancing equity, sustainability, and innovation for generations to come, and guiding the organization through periods of significant change and complexity with clarity, resilience, and sound judgment.

Be it therefore resolved that this commission hereby expresses its deepest appreciation and profound gratitude to SFPUC Assistant General Manager Barb Brahale, Clean Energy Advocate, pioneer, and environmental champion, for her many contributions to the SFPUC Power Enterprise and the City and County of San Francisco.

We wish her all the best in her retirement and her future endeavors.

And I would just like to add on a more personal note what a pleasure and honor and privilege it's been for me to work with you hand in glove for the last five years.

I uh more directly than I did when I was city attorney.

When I was city attorney, we had the benefit of Barb's wisdom in the city attorney's office and the energy team, and uh coming to work with her now more directly.

I can't tell you how impressed I had have been by her smile, her uh her wit, her integrity, and just um what a wonderful person and leader you are to work with.

It's been an honor and a privilege to work with you for these last five years.

Thank you, thank you all, thank you all.

Uh it's really been an honor and a privilege to be an employee of the city and county of San Francisco, to be a steward in a long list of stewards of the Hetechi Water and Power System, uh, to be able to establish a program as impactful as Clean Power SF, where all San Franciscans get 100% greenhouse gas-free electricity every day without having to think about it, and for the privilege of being able to work with, lead, support, coach, and learn from uh such a strong staff at the at the PUC and in particular for me at Power Enterprise.

So thank you to the general manager and past general managers I've worked with as well.

Uh, thank you to the City Attorney's Office, who's always there to help uh make sure we identify our our legal risks and have strategies to overcome them.

And thank you, Commissioners, to you who sit here and to those who are here in your seats before you over my 21 years.

Uh, it's it's really been uh um uh you know a rewarding experience.

So thank you very much.

Commissioners, I'm gonna invite the individual um uh retirees up um for pictures, but before I do that, if you'd like to say any words, please feel free.

Colleagues, Commissioner Stacey.

Uh I just wanted to say thank you to all four of you for your many years of service.

It's so important to the city and to the planet, the work that you've done.

And I imagine it must feel really gratifying to look back on your work and to know that you made a difference.

And you all did in really important ways.

So thank you for your service and enjoy retirement.

I recommend it highly.

Commissioner Jamdar.

Thank you, President Arce.

Also wanted to reiterate, thank you so much.

That was so moving.

I respect uh so many of you and uh you know, learned so much from you, AGM Hale, particularly over the years.

So, really uh grateful to be here at this moment and wish you all the best and uh you know enjoy the time to skate up.

Thank you.

Vice President Laborone.

I also like to echo thank you very much uh listening to your backgrounds being fairly new on the commission, but uh the stewards that you were for the SFPUC over all those years, we were very, very fortunate to have you, and so I want to thank you for that service uh and being the stewards that you were uh and the jobs that you did.

Thank you very much.

Commissioner Thurlow.

I just want to second what everyone has said and say that it is in some ways it's kind of terrifying to think of all of this expertise um leaving the PUC.

Um when you think about you know, roughly a hundred years of incredible accomplishments at this agency.

So I know that you've you've trained the next generation of folks who will lead as you enjoy your retirement, but I just want to say that I absolutely appreciate how much you've done, and it was really incredible to hear about today.

Thank you, Commissioner.

I I would like to uh again join the commission and thanking you for all of your service and and joining the celebration with the honorees, the contributions that you've made here will continue with the colleagues that you've mentored that you've worked side by side with, and that are here today to pay that respect and a thank you.

I um, as we were as we were talking um about the work together, I had the chance to meet AGM Hale here, and I started to think no, that wasn't that long ago, and then I thought it was.

It was 19 years ago.

Um, we we met here and have done a lot of work together uh in furtherance of of the the goals and objectives that you outlined and have delivered on AGM Hale.

And then I think what's what's amazing to me.

Now I do the math.

So 21 years, I met you only a year and a half or two years into your tenure here at the SFPUC, and you were already at the highest level of knowledge about how things work and how to get the job done.

So I'll be particularly fond of the work we did together with me in the commission role here when we work together around trying to provide a roadmap to the residents at Treasure Island to help them understand some of the keys to their energy future and uh the work that's happening on the island.

I got some some real thank yous from the members of the citizens advisory committee and the residents out there.

And I said uh don't don't thank me, thank our general manager who gave me the green light to work with our AGM for Power Barbara Hale.

So that I know that was a big win for for the residents there, and I was glad we were able to work together in that regard um in the last couple years.

So thank you all.

Um thank you all for all your great work.

I do want to open up for public comments so we can have members of the public come up and pay their respects and regards to the honorees, Ms.

Ram.

Remote callers.

Please raise your hand if you wish to provide comment on 5C.

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

Cheryl Taylor.

Uh this is on right, okay.

Uh I'm providing remarks um in support um and thanks for Barb Hale.

Um, today we honor Barbara Hale for her more than 35 years of dedicated public service, including 21 years at the SFPUC as our first AGM.

Barb's leadership has been historic and visionary.

She started in the Power Enterprise in 2005, elevating the stature of public power to the levels of our water and wastewater enterprises and building the foundation for thoughtful investment in our power generation and delivery systems to serve generations to come with affordable clean energy.

Barb committed over a decade to helping the city develop Clean Power SF, in which we're now celebrating 10 years and further demonstrating the value of public power service to our community.

Throughout her career as our AGM, Barb has been more than a strategist.

She has been a mentor, a trusted advisor, a friend, and a model of integrity.

She has fostered a culture of collaboration and excellence at the Power Enterprise, inspiring all of us staff at every level to serve our community with skill, humility, and ambition.

Barb's legacy is measured not only by programs we've started and the projects we've completed, but by the people she has uplifted and the durable institution she's helped create.

And I want to talk about, we won't talk for long about it, but the people throughout the region, throughout the state, the staff at all levels that Barb has supported.

We have a lot of sort of alums who work for assist organizations throughout the state, who she has really supported, and they are providing value for their communities where they've moved on.

Barb, we are so grateful, so grateful that we have all been on the same timeline with you in this same time and space.

We're grateful for the time we've spent with you as co-workers.

Thank you for inspiring us and pushing us to be our best.

We'll miss you enormously.

I will very much miss you and all the support you provided to me.

Um, but we're very happy for you.

So congratulations on your retirement.

Thank you.

Hi, good afternoon, Commissioner.

My name is Chiyao.

I'm the deputy manager with Power Enterprise Engineering and Field Operation.

Um, today I just want to say thank you to Baba for her incredible mentorship.

Uh Baba, I just want to let you know that um our weekly one-on-one meeting were the highlight of my week.

I learned so much from that meeting.

For instance, she always asked me to provide more details on each agenda item, teaching me the importance of fruitness, and she always guides me to make a better to make better decision.

Thank you so much, Barbara.

Uh thank you so much for your leadership, your wisdom, and your generosity.

Um, on behalf of the engineering and fuel operation team, we wish you the best in your retirement.

And also, Kathy Spading, one of our deputy managers, she's not able to come today.

I have uh some message from her as well.

I'll just read it.

Um, unfortunately, I cannot be here in person today because I'm on a prepared family vacation in Greece.

On this very afternoon, I'm touring the Pavanon, a structure that has endured for many hundreds of years and remains a symbol of vision, CFIC purpose, and the lasting impact that thoughtful leadership can have on future generations.

While Baba's contribution may not be called in Marble, the provenance serves as a good analogy through her leadership, mentorship, and commitment to public service.

She has built institutions, programs, and opportunity that will continue to benefit San Franciscan long after her retirement.

Thank you, Barbara.

Catherine.

Thank you.

Hello.

The retirement of Glorina Cristostomo is bittersweet.

While we wish her a long, healthy, and happy retirement, we will miss her experience, dedication, and caring presence in the Customer Service Bureau.

With 37 years of service, Global GLOW is retiring as SFPUC's first ever female water chief water inspector.

She is a master at what she does, not only with her technical expertise in the field, but with her commitment and devotion to customers.

In my time working with GLOW, she has helped navigate the challenges of a system wide equipment shortage that impacted our ability to build all water customers.

Aloha.

When someone sits behind me for a consent item and then quietly leaves, because you don't have a question about it, it's probably one of Howard's project managers that has fallen under his purview.

So I want to also make a note though that the commission gets to see what I will say as a fraction of those projects that do want a commission item.

There are hundreds of other projects that we do behind the scenes, and they're not always seen.

And just like Howard's work behind the scenes, diligently and quietly serving the city in everything that we do, it's worth taking a moment to pause and celebrate and respect him and say thank you for his work.

So he's an example for me of what public service should look like, and we really appreciate the work that he's done.

So we extend our appreciation for Howard's work, his career, and wish him the very best in his retirement.

Thank you, Howard.

Is there any other public comment?

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

Mr.

M.

There are no callers in the queue.

Thank you.

Okay, so I'm gonna ask uh the retirees to come up and for photos.

With commissioners.

So then if we can close out that item, which was um something we all very much enjoyed and are grateful for, perhaps we can close out with five D.

I'm done.

Alright.

And with that, can we move to item six, our consent calendar?

Item six, consent calendar.

Any discussion at all?

So if not, can we please take public comment, Miss Ram?

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

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

Seeing none.

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

Aye.

Vice President Leveroni.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy.

Aye.

Commissioner Thurlow.

Aye.

Item six passes.

Item seven, regular calendar.

Authorized the issuance of bonds or other forms of indebtedness.

One to fund the remaining development costs for 525 Golden Gate Avenue, the San Francisco Public Utilities Commission headquarters building in an amount of up to 731 million by prepaying outstanding 2009 City and County of San Francisco certificates of participation Series D executed and delivered as Build America bonds, and two to refund SFPUC's outstanding BABs with proceeds of revenue bonds or other debt obligations, including commercial paper notes of the water, wastewater and power enterprises.

Thank you, Commissioners.

Those presentations were fun, but it's also humbling to see the entire room leave.

And half the room that's left is come with me from my team.

If I could have the slides, please.

And we came back to you last month and with the results and the savings for that.

And that was one type of refinancing that we do.

We also have the opportunity occasionally to do refinancings or prepayments of outstanding debt to achieve other goals, and that's what this uh current item is about.

This item originally was moving together with the uh power uh transaction, but because this is a little more complicated, and because this one requires Board of Supervisors approval, we had separated it and are coming back now with this item.

Uh this item was uh part of our uh plan for this past year.

It's the last uh financing from the last plan that we will be bringing uh before you.

It's interesting to note what's been happening with interest rates, and it may sound a little bit counterintuitive to look at this chart and see that rates have been going up, and yet we are considering prepaying debt.

But as you'll also note on this chart, the relationship between taxable and tax-exempt debt has been changing, and therein lies why this makes sense uh today, and we'll we'll explain that a little bit further in a moment.

Um but what we are doing today is uh proposing to you a uh the approval of a potential direct purchase of build America bonds to mitigate risk.

But as we propose these uh transactions, we are also proposing that we would only do them to the extent that they also save money.

In other words, we want to mitigate risk, but we certainly don't want to lock in disavings if there are dissavings, and we have a mix today, but we know that this process of coming before you and then going to the board of supervisors won't result in a transaction until this fall.

So we're asking for the approval for all of these opportunities to make them available.

In addition, this item will also provide the flexibility that if for any reason the direct purchase doesn't make sense that we have the flexibility to do these uh prepayments with our certain our uh commercial paper as well, and it may be that we do a combination based on how other transactions proceed in the marketplace.

Um there are three transactions on this list.

Again, last year you approved and we've refined uh we we uh prepaid a um build America bond for the water enterprise.

Uh we would propose uh for the 2009 certificates of participation that were issued not by the SFPUC but by the city and county uh general fund on our behalf uh to approve those.

In addition, while we're doing that, we would also uh propose to approve the remainder of the water bonds that didn't get refinanced last year, the Build America bonds, because while they had the risk that we want to mitigate, they would have locked in disk savings.

That is still the case with these.

Bonds.

The last item to note on that chart, by the way, is that under the last presidential administration, as you know, there was substantial relief given under various uh bills in Congress that have triggered additional sequestration provisions under federal law known as the Pay-Go Act.

But for a proactive action by Congress waiving that sequestration, our subsidies would be wholly sequestered.

And that is the reason we are recommending, and so many others have across the country recommended refinancing these bonds while there are savings available to avoid the potential risks that Congress doesn't agree to that waiver.

So in uh 2009, the 525 Golden Gate uh building that we currently occupy was financed by certificates of participation issued by uh the city and county.

The reason for that is not all three of our enterprises had bond ratings at the time, and that was that served to homogenize the credit.

This uh transaction will simply take those payments that we're already paying for those certificates of participation and turn those into revenue bonds on a tax exempt basis.

In addition to mitigating the risk uh of sequestration, we also then achieve further call options, in other words, the ability to refinance these bonds on the terms that we are used to for tax-exempt bonds.

And uh with that, we would ask uh for you to uh uh approve uh the general manager uh forwarding these to the Board of Supervisors for approval.

Thank you.

Thank you, Director Sklarov.

Question from Vice President LeBroni.

As soon as the Board of Supervisors, we're gonna assume we're gonna approve it here, but it's the Board of Supervisors approving.

Would there be any reason when would that happen if for the to gain their approval?

Is that like within the next month?

So we would work with our external affairs team that has prepared a schedule where they would uh bring this uh to the Board of Supervisors, it would be referred to committee, there's a 30-day hold for that process to begin, it goes through the approval uh process, then there's another 30-day hold for the mayor to sign, and so that schedule brings us out to the fall before we could potentially leverage uh this option.

In the meantime, as I mentioned, we do have the wastewater bonds proceeding and we'll have the flexibility if that transaction proceeds, and there are savings based on interest rates in August, then we could potentially refinance then for the wastewater bonds.

The water bonds currently produce this savings, so we would not recommend proceeding with those.

And let me just because I didn't explain this in the presentation.

Our debt policy has a 3% net present value savings test.

And what that means for the layperson is it's simply a way of measuring the savings over those future years in today's uh dollars.

And the quirk is that each of these bonds at the time was issued with a debt service reserve fund.

We don't uh use debt service reserve funds anymore.

Our credit is strong enough, the rating agencies are comfortable with us not uh using debt service reserve funds.

But when we do that from a net present value basis, we need to deduct that reserve fund, which are our dollars from that amount.

So we can be achieving cash flow savings, and do, but uh not achieve the three percent NPV savings.

We would not normally recommend asking you to waive that, but where we do have this risk mitigation, should this sequestration happen, the our savings would be in excess of 19%, so uh very substantial.

We we receive a subsidy for these transactions in aggregate of about 13 million dollars, so to quantify what that loss of sequestration would really mean for us.

Is there any not that we would do this, but is there any possibility uh you mentioned the two 30 day you know periods there?

Is there any way of getting around that just because of uh the timing might affect our ability to um take the best um, uh there has been uh precedent for negotiating that, but that's a negotiation that's up to the board of supervisors and and of course to our our executive leadership.

That would probably take the 30 days anyway, so you're probably right there too.

And in your, I know this is the crystal ball, but in your looking at uh going past the fall.

Uh so we get it approved in the fall.

Hopefully the timing is still good, nothing in our environment has changed that much, say.

Um would there be the possibility of it improving after the fall?

Just I know that's a crystal ball question, but is there that possibility that it benefit us?

And I I hesitate to make predictions because the marketplace has been changing as news about the current war changes, the Federal Reserve news changes.

Um, and we have this strange dynamic that as rates rise and the spread between tax exempt and taxable widens, it's actually improved the savings of this kind of transaction because we're present valuing the taxable rate as well.

So uh they're complex dynamics.

Our municipal advisors send us an update on each of these transactions every week of where they stand.

Currently they stand in a better position than they have for the past year.

Um, but again, we're a tweet or two away from it moving in either direction.

Thank you very much.

Thank you.

Mr.

Thurlow.

Thank you for the presentation.

I'm wondering, this is kind of a follow-up to Vice President Leverone's questions, and it relates to this comment that you made earlier about how the timing of the 2010G water bonds is not quite right because currently there's um the NPV savings doesn't fit the criteria and maybe never will, but also there are no cash flow savings.

Um and so we'd move forward on that when it seems like the cash flow savings become positive.

Is that correct?

Yes, that's okay.

So my follow-up to that is there are two scenarios, right?

There's the scenario where in the staff report you calculate the cash flow savings with and without um the subsidy existing or being rescinded by the federal government.

Does it are we looking at the current subsidized cash flow savings as the benchmark, or are we thinking about the scenario where the um subsidy has been eliminated?

We are we are not making any assumptions about the elimination, but the reason for bringing this forward is that that threat.

Um, what I would um also like to highlight, and which I uh neglected to do earlier, is what having a direct purchase authorization or the flexibility of using commercial paper does for us, is it provides us a nimbleness that we don't currently have.

Normally, when we're doing a large refinancing, we have to plan six months in advance because of procurement rules uh to bring together a team because of putting together the official statement.

Don't require us to put together either of those and allow us to move very quickly.

And those relationships between tax exempt and taxable are constantly moving.

And this would allow us to capture that, even if it's only in place for a given week.

That I think that answers the next question that I had, which is when you think about the scenario of hedging and waiting until you see some signal about whether or not the subsidies are going to be effectively canceled.

Presumably that changes the market mechanics as soon as it happens in an unfavorable way.

And so is there will we'll operate with this status quo until uh as the as the mechanism for calculating the cash flow savings until we have some appreciable signal that the subsidy landscape is changing?

Is that right?

Yeah.

Okay.

There are other peer agencies who've decided to proceed only when they achieve their policy percentage, the what is for us at 3% NPV savings.

Um they are um taking even more risk.

Uh we we are suggesting that if we can produce savings for the ratepayer and eliminate the exposure uh to a uh sequestration, that that would make sense.

Okay, perfect.

Thank you very much.

Commissioner Jamdar.

Thank you, uh Director Sklarov.

Just to follow up on that point, and because I'm not a finance person, uh so the risk here is the there could be a 3% loss if the subsidies stay in place, or a 17% gain if they go away.

Am I reading that correctly?

Yes, maybe I've I've confused the point there.

The risk to us on these three transactions is in aggregate the loss of that 13% subsidy that we get from the federal government.

And by the way, what manually happens is that we file a tax return um every every six months and and get that uh tax credit uh back.

Um, uh uh we've we've lost in aggregate since 2009 approximately 25 million dollars now because the federal government hasn't fully honored its obligations.

So uh we think for all these reasons it it makes sense to to prepay these obligations, issue tax exempt debt, and then have yet further opportunities to refinance based on the flexibility of refinancing tax exempt bonds.

So that 3.38 aggregate risk that 3% risk is the risk we're taking.

Or am I getting that right?

Or is it that we're approving this now and you will only move ahead with this transaction if the subsidies are taken away?

Uh no, we would we would propose we would take that risk.

We we would propose that for each of these we make a decision about the respective transactions.

And if I could ask for the slides back.

Maybe maybe it'd be helpful to show you this uh again.

Um, it's responding much more quick uh slower than I can click on it.

Um there we go.

Um so two ways of of looking at savings.

On this one, we're looking at the net present value savings.

Again, we have to deduct the reserve fund, and that's what produces the negative savings in that first uh column.

The second column shows what our savings would be, assuming that the subsidy were uh fully sequestered immediately.

Um, in actuality, it may be it's not it's we're we know we're okay until next January, based on the waiver that Congress has agreed to, but at any uh future year, it could be fully sequestered.

Um, but what we're proposing is that we look at the cash flow savings, and the cash flow savings is what impacts our rates and in our financial plan.

Right now, those water bonds are still producing disavings.

So if we were to refund those today, we would be locking in a loss.

Well, we're not mitigating a loss, we're we're actually producing a loss.

Um, but we're asking for that flexibility that when the market relationship uh does work that we could refinance that.

Okay, thank you.

I think I understand all right.

Unless there's any other questions, we can move to public comment.

Ms.

Ram.

Thank you, Director Sklarov.

Thank you very much.

Remote callers, 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 callers who have their hand raised for item seven?

Ms.

Ram, there are no callers in the queue.

Thank you.

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

President Arce?

Uh, we got a motion from motion to approve.

Vice President Leveroni with a second from second.

Commissioner Thurlow.

President Arce?

Aye.

Vice President Leveroni?

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy?

Aye.

Commissioner Thurlow.

Aye.

Item seven passes.

Item eight, communications.

Thank you, Ms.

Ram.

The commission takes notice of the communications that were received.

Can we call item nine?

Item nine.

Items initiated by commissioners.

Commissioners, are there any items to initiate for future discussion?

None.

All right.

Can we call item 10, please?

Item 10.

Public comment on matters to be addressed during closed session.

Romo callers, please raise your hand if you wish to provide public comment on item 10.

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 10?

Miss Ram, there are no callers in the queue.

Thank you.

Item 11.

Motion on whether to assert the attorney client privilege regarding items under item eleven.

Colleagues, may I have a motion on whether to assert the attorney client privilege regarding the matters of closed session?

I move to assert the privilege.

Motion from Commissioner Stacy.

Second from Commissioner Jamdar.

President Arce?

Aye.

Vice President Leveroni?

Aye.

Commissioner Jamdar?

Aye.

Commissioner Stacy?

Aye.

Commissioner Thurlow.

Aye.

Item 11 passes.

Thank you, Ms.

Ram.

We will now go into closed session.

Oh.

Remove or remove them.

Snow reconvening an open session.

Can we call item twelve?

Item twelve report following closed session.

The commission is recommending that the board approve items referenced under agenda item eleven.

Item 13 motion regarding whether to disclose the discussion during closed session pursuant to San Francisco Administrative Code Section Sixty 67.12A.

Commissioners may have a motion on whether to disclose the discussion during closed session.

Aye.

Aye.

Commissioner Stacy?

Aye.

Commissioner Thurlow.

Aye.

Item 14, adjournment.

The Commission meeting is adjourned as of three twenty-eight PM.

Thank you all.