the san francisco public utilities commission meeting of february 13, 2024. >> so, we are calling the san francisco public utilities commission regular meeting of february 13, to order. roll call, please. >> president paulson, present. vice president rivera is excused. commissioner ajami, here. commissioner maxwell, here. commissioner stacy, here. we have a quorum. >> thank you. so, before we get to the first item, i like to announce that the san francisco public utilities commission we acknowledge that we are on the unceded ancestral homeland of the ramaytush ohlone who are the original inhabitants of the san francisco peninsula. as the indigenous stewards of this land and in accordance with their traditions, the ramaytush

ohlone have never ceded, lost nor forgotten their responsibilities as the caretakers of this place, as well as for all peoples who reside in their traditional territory. as guests, we recognize that we benefit from living and working on their traditional homeland. we wish to pay our respects by acknowledging the ancestors and relatives of the ramaytush community and by affirming their sovereign rights as first peoples. donna, can you call the first item? >> approval of the minutes of january 22, 2024 special meeting, january 23, 2024

regular meeting, january 26, special meeting. january 29, 2024 special meeting and february 2, 2024 special meeting. >> are there any corrections or comments on any of the minutes from these past meetings commissioners? seeing none, we'll open this to public comment. >> any members of the public present to provide comment on any of the minutes? seeing none. >> seeing none, can we get a motion and second to approve the minutes for those numerous meetings? >> move to approve. >> second. >> roll call, please. >> paulson, aye. maxwell, aye. ajami, aye. stacy, aye. four ayes. >> item 4, general public comment. donna, can you open- >> item 4 is general public comment. members of the public may address matters within the commission jurisdiction but not

on today's agenda. i have speaker cards. first mr. ducosta. mr. rosecrans. dave warner, denise louie and if you not turned in a card you can stand on the side. >> commissioners, today i want to talk about our pipes, drinking pipes, sewer pipes, pipes leading to hiderants. so, we need a hearing on how you are going to address fixing the pipes on the west side that has now been transferred or was transferred because of insufficient money to the sfpuc. it is important that those hydrants have the pressure if there is a fire. otherwise we'll have the same type of situation we had in hawaii. the citizens of san francisco,

we had agreed a long time ago when karen cubic was there that at least twice a year we would get some sort of a report on the clean drinking water pipes and the sewer pipes that had to be replaced. we haven't heard anything. i know the pandemic came in the way, but that doesn't mean we don't have a hearing. we need a hearing on those issues. thank you very much. >> thank you, next speaker. >> thank you good afternoon commissioners. always a pleasure to come to city hall and see the happy people getting married in the hallway. a neat thing. i come today to correct the record from three weeks ago when i spoke to the substance of the m oa between sfpuc and national park service. the commission asked there had been public review.

staff indicated it was the responsibility of the national park service. i'm not sure why it is the responsibility of one party and not the other, however on june 1 last year we asked the park service to review the draft moa, it was denied. we asked the puc and national park service in writing on june 19 in a letter to mr. herrera and the superintendent. we didn't receive a response. on september 26, sent a letter to the park services opining on elements of the moa as well as other things. i know the city generally and the sfpuc in particular prides itself on the opportunity for public review on issues before it. there was no such opportunities in this case. thank you. >> thank you.

next speaker. >> i'm dave warner. thank you for your service. it is honor to speak to you today. two items. quick request you reinstate remote public comment. some other commissions and committees have remote public comment including the revenue bond over sited committee, citizen advisory committee and port commission. these are just ones i have come across. the approach to reopen remote public comment until experiment until such time there is hate speech or inappropriate behavior. ideally that will never happen. item 2, i also like to thank sfpuc for doing such a great job during our last set of storms. it demonstrates the years of experience and expertise and very lucky to have them all. thank you.

it is a quality organization. thank you. >> thank you mr. warner. next speaker, please. >> good afternoon. denise louie here. member of the scepter for biological diversity and puc customer. again, i urge you to withdraw puc lawsuit against the state water board and give you a few reasons why you should remove the lawsuits. one, the bay delta ecosystem is verging on collapse. two, because the puc water enterprise environmental stewardship policy states the puc entrusted to manage resources is committed to responsible natural resource management that protects and restore viable populations of native specious and maintains integrity of the ecosystems that support them for current and future generations.

three, because this policy the water enterprise environmental stewardship policy says the puc strives to be a leader in science based environmental stewardship, meaning, there is no basis for pursuing your voluntary agreement. another reason for dropping the voluntary agreement and lawsuits is the city general plans environmental protection element, which directs the city to restore improve the quality of natural resources and protect rare endangered specious and natural habitat including the bay. there are even higher authorities, but this should be enough to meet your responsibility to immediately drop puc voluntary agreements and lawsuits for the sake of our internationally recognized significant bay delta. time is of the essence, the fish cannot hold on much longer, they are already threatened with extinction and policies and words don't mean

anything if you dont take science based and pro-environment action. thank you. >> thank you. next speaker, please, come to the microphone. >> good afternoon. peter dreckmyer policy directser for tuolumne river trust. you had a conversation about the demand projections. there was water enterprise that creates projections for the urban water management plan and finance bureau that does the sales projections for the budget and they have been very very different, so i applaud you, especially commissioner ajami and at the time commissioner maran. i thought it was interested i dummied one up and thought it would be interesting and we waited two months and no word about a response, so we encouraged then president moran

to add items requested by commissioners at the bottom of the advance calendar so it isn't wasn't forgotten, which he did and couple months passed and said how about putting a date on that so 6 months later in july there was a great report, very honest that compared the two and found that the finance bureau over-projected some and the water enterprise over-projected a lot and that's really important information, especially when you are talking about things like the budget. i am also really appreciated commissioner ajami on november 28 mentioned it is good to know how lower sales would effect the budget and affordability. that wasn't added to the advance calendar and hope that process hasn't gone away, but that would have been good information to have. finally, we are still waiting for the alternative water supply plan. the draft was june 30 and it has been 7 months, so nice to

see that on advanced calendar and wonderful if we can get three minutes like we did before covid. with covid a lot more people were able to participate so made sense to minimize it to two, but three minutes would be helpful. >> thank you for your comments. next speaker, please. >> good afternoon commissioners paulson, maxwell and everyone else. liz jackson simpson, ceo of success center and provide workforce development services here in san francisco. i am speaking today on support of the sip program. the sip program provides education workforce development and arts service to community members and i just wanted to insure this program stays in tact. we have been beneficiaries of it. as you know our grant dollars only do so much to provide

training to people but huge gaps in service exist from these very restrictive dollars, but the sip program dollars allow us to provide things like, tools and union dues and one of my clients needed prescription goggle tuesday go to work. these are huge barriers that keep people from livable wage jobs. we continue to support and provide case management once folks are placed because this is very temporary work so providing support to constituents to go through 18 to 20 weeks of training every day to prepare and get ready for these jobs we want to make sure they continue to stay employed so they can thrive here in our beautiful city of san francisco, so i have information here about how some of the sip programs and partnership with web corp and building and trades council supports those in bayview hunter point and san francisco at large to provide these services. we were recognized by department of labor this past august for this very innovative

intermediary we created that exist no where in the region, let alone in the city or country see i'll leave the information here for you review. thank you for your time. >> thank you for those words. public comment. if you like to speak please come to the microphone. next. if there are those, please come to the microphone. we'll call you. >> good afternoon. my name is mary butterwick a long time resident of san francisco. at several meetings members asked the commission to revisit the extremely conservative 8.5 year design drought. the primary tool used for managing flow releases. the 8.5 year design drought has a return period of once in 25 thousand years. i do not believe this is the

reasonable approach for managing flow release on the tuolumne river particularly damaging to the river and environment during dry periods when quality of life needs adequate flow the most. i urge the commission to reduce the length of design drought by one year, apply reasonable demand projections and present the results to the public. these actions would go a long way towards addressing the perceived water supply needs and hope fully facilitate a meaningful dialogue on the in-stream flows needed to restore and maintain a sustainable population of salmon in the tuolumne river. i urge the commission to drop the lawsuit against the state water board bay delta plan and work with the state to insure flows in the tuolumne are consistent with in-stream flow standard adopted by the state in 2018.

thank you. >> thank you for your comments. please. >> [indiscernible] >> we are on public comment. if you have general public comment that has not on the agenda you like to address, please come to the microphone. >> [indiscernible] >> if it is on the agenda we'll call it during the course of the agenda. thank you. are there anymore folks for public comment? okay. seeing none, are there any other folks that have called in? seeing no more public comment, we will go to item number 5, which is the report of the general manager. >> thank you mr. president. nothing to report. >> okay. thank you. so, we will go to item 6, which is the consent calendar. and i am going to ask, are

there any commissioners have any comments, questions or about any item? commissioner maxwell. >> i have a question regarding 6a. >> item 6a. with that contract? i see that maybe katie miller could ask that question and maybe you have a question while she gets to the mic. >> yes. it says that the staff proceeding to perform additional outreach pursuant to consultant feedback so they revised the subconsultant qualification requirements, because there was only one-there were not enough people. i wanted to know what that revision was? it says, consultant feedback revised subconsultant qualification requirement. >> yes. thank you commissioner.

katie miller, director of water capital programs. i do have notes here and i can answer that directly. we reduced a couple of the requirements in order to attract a greater consultant community, so one thing was there was a on-site mechanical engineer and we reduce the on-site stationing requirement from 80 percent of the time to 50 percent of the time to make it easier for that person to be there and reduced the qualifications for that mechanical engineer from 10 to 5 years experience. there were also modified language for qualification requirements to avoid uncertainty related to references to the terms similar and instead refer to quantifyable parameters. we eliminated restriction for

holding key lead position. concerns related to original language mitigated by new requirement elsewhere must be employee of the prime proposer or lead jv partner. we tried to clean up the language, reduce the subconsultant requirements so we could attract a broader community, and then reopen that advertise for bids. >> did that work? >> well, it did. we also did several other things. we increased the maximum allowable billing rate, and we changed some of the professional liability insurance requirements. that was something we heard because it was dealing with the emergency fire fighting water system, some feedback we got is they were concerned about liability with fire insurance with the--and so i think with some of the consultants didn't bid because of that reason. even though we dpot zero

bidders the first time we did extensive outreach the second time and still only got one bidder, however the firm is qualified and we are looking forward working with them. >> so, one of the bigger issues was the insurance. >> professional liability insurance concern. >> okay. are you thinking then is there anything else that you can do next time? >> i'm hoping this was unique to this contract and, but we did learn a lot about it. raising the maximum allowable billing rate to be more in line with market conditions. another is to reduce the subconsultant requirement to attract more local jv partners, smaller firms for subs and jv for a higher participation rate of local contractors and those carried through to the current

contracts, so i think those will help us be more successful in the future and with good lessens learned from this. >> great. thank you. >> are there any other-commissioner ajami. >> i was wondering when you reduce the subcontract requirements, i assume those subcontracts have not gone out yet, have that? >> they were part of the package so they were already included with the team being awarded. >> when you reviewed those, those reducing those requirement, did it have a impact or do you think partly the reason we did not get a lot of bids was because our hourly rate was lower? just trying to understand, which of these changes lead into at least getting one bid? >> i think it was a combination of all the things, the

outreach, the liability insurance and casting a broader net for subconsultants. the higher billing rate allowed the consultant to bring on specialists for this that we probably would have allowed by exception to contract after the fact, but by allowing it now it made it easier to bring on the specialists we really want for this type of work, so i think that was helpful, and reducing the years for the partners for the subconsultants, i think allowed us to tap into local. we did pick up a local subcontractors on this contract, so i think that was very helpful as well. >> commissioner maxwell. >> thank you. so, do you have a process or strategy so your outreach is consistent? sometimes you don't do a lot, sometimes you do more. do you have an outreach

strategy to always try to get- >> we do. we do. >> why was this then why did you center have to go back if you always do? >> steven robinson, assistant general manager frucktd. infrastructure. there is standard process to engage when we have solicitation coming up and as katie mentioned this felt unique for reasons we talked about today. perhaps primarily the liability and concern working on our emergency fire fighting water system for san francisco. but our process for outreach can range multiple different ways. [indiscernible] on the website or with the contractor center vocal about the opportunities coming up. we have occasionally different events where we publicize things but when we get into project specific piece of work we reach out to different potential parties that could be interested and participating. in this case that failed to produce a bidder the first go round so there was more

outreach to understand the concerns to reach out a second time. >> usually you go back to the same people you deal with all the time on certain projects? >> we have the full list of local business enterprises which is a standard way to communicate with everyone on the list and the larger firms or ferms who typically [indiscernible] know how to go to the website and find the upcoming opportunities. >> commissioner. okay, thank you. any other questions? >> i have a second comment. i think maybe this goes back--obviously each project is different, but we have been dealing with not getting enough bids for different rfi or rfp we put out and that is challenge because you don't know if you are picking the

right person or best-of course you are picking the right person, but the best bid because if you have only one, it is hard to compare to other options. it is good to figure how we can improve that situation if that means that we have to rethink budget, if that means we have to rethink other technical requirements. obviously we want to make sure everything is done right and the quality, but we also had conversations about some of these technical requirements also depending on time can impact our own recruitment internally as well, so maybe have a broader strategy around that. we do need to be able to get more then just one bidder for these projects. some are more specialized i understand, but this isn't just a lone case. there are other projects we have often and don't get that

many bidders. and cost goes up. >> thank you commissioners and thank you steven and katie. commissioners, anything else on the consent agenda in terms of questions? seeing none, let's open to the general public, item 6. >> members of the public to provide comment on the consent calendar. seeing none. >> seeing none, let's-can i get a motion and second to accept the consent calendar? >> move to approve consent calendar. >> second. >> moved and seconded. roll call, please. [roll call] four ayes. >> okay. thank you. item 7, approve umbrella

contract-read item 7, please. >> item 7, approve the umbrella memorandum of understanding between san francisco public utilities commission and the san francisco unified school district, with a duration of 40 years which establishes the partnership framework for the sfpuc's installation and operation of various green infrastructure projects on sfusd properties, subject to the approval by the san francisco board of supervisors and the san francisco board of education. >> good afternoon commissioners. joel prather acting assistant general manager for wastewater enterprise. this is request for approval a important umbrella between the puc and san francisco unified school district to deepen partnership on green infrastructure. this mou is product of years of collaborative work between our staff and the staff of the san francisco school district. as you know, the intent of the green infrastructure strategy

is to deliver core service of storm water management providing benefits to rate payers and collaboration is a perfect example of that. the school district is one of the largest land owners in san francisco. the campus include over 300 acres of impermeable service managing storm water help meet the green infrastructure goals. together we will work towards making these projects transformational for kids and families of the city giving them better access to nature, educate about san francisco watersheds, nurturing culture of environmental stewardship and help them form positive connections with nature and work at the san francisco puc. lastly, i want to give a thank you to partners at sfpuc infrastructure and school district. it is team efforts between all the groups and with that, i will hand it over to sarah bloom from our wastewater

enterprise urban watershed team working directly and involved directly with putting this mou together and will summarize the details of the agreement. >> thank you. joel. i want to acknowledge the partnership with san francisco unified by starting small with a handful of demonstration projects designed poomanage storm water and providing educational and stewardship opportunities to students wep able to build on successes and scale up investment through the various grant programs we now have in place and now we'll scale up further as we work together through the agreement. the agreement before you today is what we have named our umbrella mou, which establishes the general framework for partnership including overall objectives and roles and responsibilities between the two agencies for all phases of a project from planning all the

way through ongoing maintenance. however, the agreement before you today does not commit to any specific projects. you will see in appendix a1 the site agreement document. these individual sites agreements are the mechanism we authorize a project on a school site and included detailed project information and responsibilities. these individual site agreements run for 30 years which is consistent with the asset life of the capital green infrastructure and when a project is proposed the site agreement will be brought to this commission and board of education for approval and incorporation into the umbrella agreement. this structure acknowledge value having a long-term vision to govern partnership. we are excited to share this umbrella agreement approved at the board of education last month and if this commission approves the agreement today, it will go to the board of supervisors for approval to have authority to enter into

site agreements in excess of 10 years. i like to end by echoing joel's thank you and acknowledgment to teatmates at infrastructure division who worked alongside us and amazing partners at the school district who came to the table with a collaborative vision for the partnership on green infrastructure. thank you. >> thank you much. i want to start by saying, thanks for the summary presentation and documents. i know we as commissioners over the years have been seeing some of these projects whether or not they are small removing of pipes in a particular fountain to see what can be taken care of from the small to larger ones so i think this is important and know we will see these peppered through the regular meetings we have as these projects come to fruition to be envelopeed into the master agreement so i thank you for that.

commissioner ajami. >> thank you for that presentation. i actually was wondering can we-i brought this up multiple times i think. it is a great to build green infrastructure, it is like the fact you have the data and you know how they operate is totally a different element of this, and wondering if there is a way we can use sort of-incorporate some form of a data gathering first because we need to know how they are operating and if they are doing what you hope them to do. second, because this can be a educational experience for the kids beyond just building green infrastructure. how you put instruments together? how do you track their operation? how often you need to revisit what build? it is a amazing educational tool and they can also-depending on which schools we are looking into, maybe in the high school level they can even write models that they can see how these operations have

started and ended or disrupted by this and that. i think it would be important to put this in here. i like for us to be better gathering information and data on our green infrastructure and i would like to see that incorporated in this effort. >> sure. we can certainly get back how to do that what goes in the site agreements. we have flexibility if we want to outline our stewardship and engagement with students on a project by project basis and come back about how we kind of bring that together through all the different sites we work at. >> and potentially you guys can own some of that data or see some of the data and we can use it to see which location works, which location doesn't work, how often they need it operate here and the challenge there, so be able for us to also have that data. >> absolutely. >> commissioner stacy. >> thank you and thank you for the presentation.

i want to endorse what commissioner ajami said. there was a early greening program at my kids middle school in san francisco and just the planning process and the way the students got involved in the planning process with the teachers and staff was a really useful educational tool. i also wanted to endorse again that you heard it from the commission a lot. green infrastructure is a really important part of our wastewater program and it is good to see that you are pursuing it. when i first read the agenda item i thought, wow, it is really ambitious, 40 years with the school district, but as i read through the agreement and the staff description, it is really a good framework for moving forward and that things, programs, agreements, projects may evolve over that 40 year period and this mou seems to

allow that. i also noted there were fairly easily termination provisions so that if circumstances changed so radically it isn't working out for either the school district or the city they can terminate the mou, but it seems like a useful framework for a long period of time moving forward, so i just wanted to endorse that as well. thank you. >> thank you. >> commissioners--again, thank you for that. a 40 year partnership that with many details forthcome, so thank you very much. public comment. >> any members to provide comment on item 7? >> please come to the microphone. denise louie, active member of the california native plant society. where to begin?

california is a bio diversity hot spot. meaning we are blessed with abundance of specious, many we brought to the brink of extinction and it isn't just bay delta fish, it is plants as well. san francisco is a important part of the bio diversity hot spot. in fact, of the 780 plants in san francisco historical record, 1/3 disappeared. we should see more of the 516 that remain. i like to see and hear your documents and speakers include the fact that we need to create or re-create and protect native habitats with plants starting with plants of san francisco genetics. so, just for example, i need you to know plants from my

backyard, san francisco genetics were used in the habitat restoration around laguna haund reservoir and the recent puc effort to restore habitat, native habitat around laguna honda where puc had removed dead and dying trees. >> thank you. this is public comment on item 7 with the mou with the school district. please come to the microphone if you like to speak. >> thank you. we'll come up together. hi, katie boil, executive director of facility services for the san francisco unified school district. my name isicate levt the communityication director for the bond program at sfusd. we are here to endorse this agreement obviously.

i have been working very closely with sarah over the last few years puts this agreement together and absolutely thrilled to be standing in front of you today seeing it move through. we have been working closely like many mention ed on smaller scale projects. this is a opportunity to provide really transformational opportunities for students, not just for learning but for playing. we also have work into the agreement opportunities for our staff to learn and grow professionally, so i think it is a great job opportunity for local san francisco residents. >> i'll add my role as managing all community outreach and engagement and we are thrilled about the opportunity this brings to create more dynamic vibrant school yards and work with students and staff so thank you to the staff we worked with, thank you commissioners, we really appreciate this mou. >> thank you for being part of

the team. public comment on item 7. are there anymore speakers? seeing none, let's move forward. is there a motion and second? >> move to approve. >> second. >> roll call, please. >> paulson, aye. maxwell, aye. ajami, aye. stacy, aye. >> approved. the next items are items 8, 9, 10 and 11 and i want to remind everybody that these are the final readings of what we did for four long meetings four special meetings we had just in the last couple weeks going through all the different enterprises and going through the entire budget process, so we are going to be presenting

these individually and donna you will read them in a second and we'll vote on each item separately as we move forward. donna, can you read the items together, please? >> thank you. yes. >> starting with item 8. >> item 8, public hearing to consider and possible action to adopt the san francisco public utilities commission biennial operating budget including the revenue transfer for capital in the amount of $1,992,354,768 for fy 2024-25 and $2,110,646,439 for fy 2025-26. . item 9, public hearing to consider and possible action to adopt the san francisco public utilities commission two-year capital budget consisting of $1,784,912,774 for fy 2024-25 and $1,792,439,721 for fy 2025-26; and authorize the general manager to seek board of supervisors approval for the issuance of (1) $1,035,007,350 aggregate principal amount of water revenue bonds and other forms of indebtedness, including coci ste revolving fund (srf) loans, (2) $1,715,671,086 aggregate principal amount of wastewater revenue bonds and other forms of indebtedness, including commercial paper and srf loans, and (3) $292,825,860 aggregate principal amount of power revenue bonds and other forms

of indebtedness, including commercial paper and loans, all subject to the terms of charter sections 9.107(6) and 9.107(8). item 10, public hearing to consider and possible action to adopt the san francisco public utilities commission 10-year capital plan for fy 2024-25 through fy 2033-34 totaling $11,811,605,094. item 11, public hearing to possible action to adopt the san francisco publicue timties commission 10 year financial plan chblt . y thank you madam secretary. before i hand things over, commissioners, i want to thank you for engagement in the four budget hearings that took place over the last several weeks. we are pleased to receive feedback and answer your questions. we are before you today for formal adopt of the budget capital plan and financial plan. as you know, climate change is the challenge of our era. as such it was a key lens we used to help shape this budget. climate change effects so many aspects of our work protecting the environment to regulatory

requirements and energy needs. storms and drought are the realty we face. to help address that we make major invests detailed laitder in the presentation. i want to touch on earlier discussion around the clean affordable reliable power we provide and benefits we offer as a public utility compared to profit driven by pg&e. we have a plan for city wide public education campaign about our power services scheduled to launch later thiyear and already included in the budget. we'll go into that in more detail later in the presentation as well. with that, i'll hand off to nancy hom our chief financial officer laura bush and aaron [indiscernible] financial planning director. they present overview of the four items before you today for approval. over to nancy. >> thank you dennis. good afternoon. my name is nancy hom, chief

financial officer. later on laura bush and aaron will present the remaining items for 9, 10 and 11. this budget capital financial plans are the product of many hours of hard work by our agency staff over the past 6 months and want to express gratitude for their time and commitment to this process. also like to thank members of the public for their engagement as we appreciate input and insight to our budget and financial capital plans. we are here to adopt items 8-11 on the agenda, which is our biannual operating capital budget, 10 year capital plan and 10 year financial plan. this our agenda today. recap of the budget hearings and commission actions and then revisit our budget priorities. continue with the operating budget summary, capital budget and 10 year capital improvement plan summary and then the 10 year financial plan overview.

before we get to the items before you for adoption today i like to provide a recap what we accomplished thus far for 2024 budget hearings. the commission held four special hearings over the past 2 weeks to allow executive and senior manage to deliver overview and answer questions. we are here february 13 for the adoptions listed here. we had nearly 12 hours of public hearings over the past four meetings prior to the budget hearing. presentation covered the budget priorities and budget change drivers for each enterprise and bureau budget. we insured take note of the commission questions and are follow-up with answers before the next budget hearing and provided the opportunities for the public to provide feedback and input meeting obligations

under the administrative code. 3.3. you play a vital role in the budget development process. your role provider input and feedback is critical, it is big step as part of the agency proposed budget presented to the public forum. transparency has been our primary goal and proposing this year's budget. at todays meeting these items will be presented for consideration. the budget will be submitted to the controller's office and proposed to the mayor's office who will propose the budget in may. during the two next phases of the budget may go through modniication with final approval in june and going into effect july 1. we will return to the commission and provide a final summary of the final budget detailing any chaenges that have occurred after adoption of the proposed budget at the meeting.

the changes could include labor agreement, fringe benefit cost and budget cuts by the board of supervisor budget legislative analyst. you have seen the budget priorities throughout the hearings and highlighted in each enterprise and bureau presentation. developed proposed budget to align and contribute to our agency endeavor becoming a utility of the future. again, these priorities are emphasized as affordability, responsible management and insure we invest where it matters. each budget priority is supported by initiative and action that guide in the budget development process. over the past couple weeks we heard your concerns and feel it is important to respond to them. to be clear, the capital budget and are entirety of the agency operations are viewed through a climate change lens. we are not only planning for the future impact of climate change, we know climate change is here and impacting our

systems region and rate payers. to be responsive we felt compelled to call out key areas we prioritize in our capital project budgets. i want to emphasize these examples and also not exhaustive list. all the capital projects is result of climate change or seek to ready our system and rate payers for oncoming worsening impact of climate change. though that statement sounds exaggeratesed, please allow me to share why it is not. our agency response to regulatory environmental and clean energy needs is clearly climate driven, however budgeting for repair and replacement of aging infrastructure does not appear as clean cut. in viewing this budget through a climate lens, enterprise staff considered this way, increase dramatic storm events placed pressure on the wastewater infrastructure. incrsiatr events negatively pressure our power

infrastructure and create domino effects to the power supply and distribution cost. the uncertainty of the frequency and severity of drought events lead to water infrastructure to be stressed and these are examples and provide a example how climate change is aging our already old system where many components are beyond expected use life. the examples of aging infrastructure points to a broad brush. [indiscernible] is a result of climate change but to be more specific, the following highlights are key projects that the strategic actions in response to the direct result of climate change on our agency. we quantified projects with a total budget amount on the slide. first being system resiliency and water and wastewater. climate change increasingly age system as weather events become more extreme, storms create

more damage effecting the system and temperature rise and frequency of drought increase. we have climate resiliency projects tote aling $789 million including the ocean beach, green infrastructure and folsom area storm water improvement. these helps the agencies and communities around them to respond to impact of flooding and heat island as a result of climate change. also responsible steward of a [indiscernible] our largest project is southeast nutrient reduction project which insures we do our part to contribute to reduction of regional issue of newt rchbts in the bay and that totals $1.2 billion. clean energy expansion total of $780 million include the moccasin [indiscernible] carbon free steam, the san francisco

international airport substation improvements and downtown electrification for the ferry. these insure our agency issuetility of the future and takes commitment and responsibility seriously to reduce carbon emissions which threaten to worsen the impact of climate change. while the slide folks on capital investment all our work is impacted by climate change and will be evaluating these impacts as we continue to observe how our operational needs may need to change and hope highlighting the climate change lens we use to evaluate proposed investment is helpful. it was important to take this time to highlight how seriously we consider the ongeing threat climate change poses to the system and rate payers mpt i also want to share how we continue to promote power service. highlighting value to hetch hetchy power and clean powersf customers. our electricity service remain cheaper then pg&e.

hetchy power continues to offer the lowest electricity rates in san francisco and clean powersf continues to offer savings compared to pg&e for generation. the average residential clean powersf customer will save $8 a month getting their electricity from clean powersf instead of pg&e and we highlight across the channels especially since pg&e makes headlines for the most expensive power provider in california with increased electricity rates as recent as january 1. we see the opportunity to highlight savings from use of utility service offer to san francisco residents and businesses which resulted in positive local media coverage as highlighted in the section from the sf standard on the slide. we actively engage in social media campaign to highlight benefit of utility service and you see examples here from some of our posts. we also message customers

through e-news letters which reach 240 thousand recipients. other tools include direct mail marketing and inperson outreach events and free educational webinars to provide service information directly to customers. on january 25, over 90 people attended the webinar, understanding your electricity bill. it helped demystify pg&e, clean powersf and sharing helpful tips for manage customer bills throughout the year. as you see, we have a great story to tell about our electricity utility offer said by hetchy power and clean powersf and to amplify our story expand the reach funding is allocated for broader paid advertising and marketing campaign later this year. insure the successf the campaign, sfpuc communication will conduct a public opinion research project of the power customers in the first quarter of this calendar year to gauge

interest and motivation with electricity service. this data helps inform our approach to city wide education campaign which is said to launch around the start of new fiscal year around july. we are happy to keep the commission informed of the effort moving forward in the months ahead. now continuing with item 8. the adoption of our biannual operating budget for fy-24-25 and 2025-26. as i move through the section you likely recall many slides from the special hearings. i'll try to go through quickly and welcome questions you may have at the entd of the presentation. i also want to caveat the budget numbers are present our best estimate and may change during the mayor and board phases specific to labor cost assumptions and any other changes they propose at that time and again we'll come back in the early summer to summarize the changes between now and then.

this represent the operating budget for fy 24-25. the growth in the operating budget is driven by two main cost driving accounting for 60 percent of the budget. capital cost representing 36 percent and comprise of debt service and revenue capital in the dark and light blue. total $228 million. second is power purchase and distribution representing 26 percent of the budget highlighted in the orange or yellow on the screen. other cost include personnel cost and non personnel cost to support daily operations. how much has our budget grown from current year? this bar chart highlights it grows from 18 percent or $323 million over the next two fiscal years and again, the

primary drivers here are capital and power purchases the most significant and largest cost. growing by total of $306 million or 83 percent of the $323 million and you see these in blue and orange on the bar chart. proposal for operating bujst are not a significant driver of overall growth. [indiscernible] 10 percent of the growth figure. new proposals increase operating budget by 1.8 percent over two years. the operating budget growth drivers are laid out in a bar chart for easier viewing. it is clear again that capital cast in gray and plupolk blue and power distribution cost are the main drivers in budget growth. we were able to develop our capital plan proposals, it is important to note we do not have full control over these power purchase and distribution

costs and operating budget as driven by energy market prices and pg&e. this fact places a lot of pressure on the power enterprise. financial planning director will later share more on this in her portion of the presentation. a quick reminder regarding green bar at the bottom. it is reduction in the general reserve contribution compared with the current year's budget. this is in accordance with our financial plan. new proposals are summarized here. new proposal [indiscernible] 25 and 26, however we have been able to off-set a portion of cost by right sizing the budget salary savings. the net impact is net total of $33 million when factoring the salary savings. the blue table to the left breaks new proposal by

enterprise and factory salary savings again at the bottom line. infrastructure budget is listed separately. the budget does grow, the funding comes from the capital budget. this slide is a summary of overall staffing requests. a portion of new proposals is due to changes we made to our staffing detailed on the pie chart and in the table to the right. we request total of 171 new permanent positions between those the 84 and 87 circled in the blue and 175 substitutions. as you may recall, of 171 new positions 87 are conversions. the pie chart details by enterprise and bureau. again, let's go through what these staff changes are.

the 175 subitutions repurpose vacant positions and aligning job duties with classifications. they are existing budgeted positions where we request to change the job classification and role. the next group of 171 new positions requested of this figure in addition to the new positions these include 87 temporary to permanent conversions to insure permanent operating positions are filled with permanent civil staff. of the 171, the remaining 84 are new positions to address urgency and issues such as staffing shortages such as water quality, natural resources and green infrastructure and maintenance and more importantly, shoring up the human resources team to insure proper capacity to increase hiring performance. ypt to take a little time for the benefit of the commission and those here today to share

more about what temporary to permanent conversions mean and why they are priority in the budget. again, this is 87 of the 171 new positions. these requests are budget and head-count neutral as they are temporary exempt positions to be converted to permanent civil service staff that are in core long-term operational roles. these positions are for existing staff that we already have on board or soon will and already paying for this fiscal year. they sit in temporary position requisitions paid by temporary salary budgets. staff that perform core operational duties should be in permanent operating positions. as we experienced temporary staff are more likely to leave employment. turn over is a significant for our agency and cost to rate payers as it creates disruption in business operation, increase

labor cost and negative effect on the workforce. retention of staff is a core priority for our agency. in a recent survey not having a permanent civil service position was among the top 2 reasons consider leaving sfpuc. being in a temporary position is more likely to have a employee leaving more so then lack of pay, lack of meaningful work or lack of relationship with supervisors and coworkers and lack of career advance is the main reason employees considering leaving. having permanent roles and positions employees can advance is key recruitment and retention strategy and this is proven in data and through individual experience by hiring managers. we lost many talented individuals employees from internal and external jobs for permanent positions and roles. as these temporary positions

are filled at the time of the budget proposal there is no new headcount for the substitutions rchlt labor cost are offset as we are already paying with existing budgeted dollars. again, we won't shy from the fact we have large number of vacancy. you may ask how can we ask for so many positions when we have hundreds we cant fill. management has throughout through this carefully and acknowledge the realty we need to fill the vacancies and need the new staff. finance took steps to insure we were prudent and possible. we first went through the vacancy report in detail with each enterprise bureau to identify positions no longer needed or vacant too long. we repurposed for new roles and needs and as a result got

175 substitutions in this budget. this reduce the number of new request from the original 203 to 171 new positions we detailed previously. next and most importantly we have a story for every vacancy to insure no fte is vacant without a recruitment plan. every vacancy is justified and we have actions and plans. we already provided this information in advance of the mayor office and board of supervisors budget legislative analyst in response to city wide inquiry on vacancy. we have changes in the budget attrition to appropriately reflect salary savings off-setting budget dollars and new fte requests. again, most importantly, we are committed to filling our vacancies by insuring we bolster the human resource team to support hiring activities for successful recruitment and

hopefully increase in the upcoming fissile fiscal year. this slide highlights puc growth over the 4 fiscal years, the annual appropriation ordinance position number is highlighted for each fiscal year on the bar chart and on the table. the figure represent budgeted and funded fte and exclude off budget position and attrition and as you see the fte has only grown by 4.3 percent or 73 percent in the last 7 years. meanwhile, our operating budget over the same period of time for four years has grown by nearly 50 percent and again, a larger operating budget isn't a matter of extra zeros on payments or report. we know how complex the work of the agency has gotten over the last few years due to respond to in compliance with new regulation, increased audit and

transparency, massive capital investment, strengthening workforce and engage and investing in our community. must stay ahead with training to maintain complex skill sets and keep up with increase paiz and business operation due to advance in technology that fuel our growth. the point i highlight is our staffing request is reasonable and appropriate given the scope of work has changed and grown significantly. we remain fiscally prudent and leverage resources we have and only request what we need to accomplish our objectivals. thank you, i like to hand over the presentation for 9 and 10 to laura bush, deputy chief financial officer for financial strategy. >> thank you. are we done with 8 i going to 9? we are on the agenda? if there are questions i want to have a appropriate break. i like to do it at the end, but if we can do it since nancy is

finished, commissioner ajami. >> thank you so much for your presentation. i actually realized i had a question last time which i forgot to ask this might be something that actually general manager herrera can clarify. i see there are four new positions under the general manager role and just wondering what is the allocation of the four few roles? >> most if not all of them are for our dei efforts. diversity equity inclusion. because now we have chris on board. these are new-he's housed in the office of the general manager and these are staffers he needs for his efforts. >> i assume the other role you were thinking about- [multiple speakers] thank you. >> yep. >> commissioner stacy.

>> thank you for all of the information throughout all the hearings and all the questions you answered. i also had a question that i should have asked earlier on your slides 12 and 13 on item 8 you show on slide 12 off-setting increase in salary savings and then on slide 13 you show a salary savings. are those savings caused by the vacant positions? is that--how we save on salaries? >> that is right. you hit on a important point. the changes in attrition or salary save ings is a major strategy to be prudent and responsible so we have done two things. we right-sized salary savings to account for historic vacancies and salary savings we see every time we look at the budget versus actual. secondly, we are doing a lot of

temporary permanent conversions. those are staff already on board so don't need to ask for new dollars or fte so we are also off-setting those positions through attrition savings and that is what adds up to $14 million you see. >> i think you anticipated my follow-up question. the salary savings, if they are vacant positions they hopefully decrease as you fill those vacant positions, but i think what you just said is, we are already anticipating that we will fill those vacant positions and so this number is based on a more traditional rate of attrition and rate of vacancy? >> that's right. through this budget our current attrition rate is just under 11 percent. we are going to be increasing our attrition rate to just over 12 percent through this budget to more appropriately reflect the salary savings we historically have been seeing. >> okay. >> yes, ideally we get all the

positions filled but experience goes to show we won't. [indiscernible] so it is prudent and responsible not to charge the rate payers for full amount of every position if we know there will be vacancies. >> understood. thank you very much. >> i'll use this opportunity to squeeze in something i was going to hold till the end before laura you dive in. i just want to thank you for just reemphasizing the different ideas of moving from temporary to permanent and going into the details we went to much more in the earlier budget meetings but emphasizing that and talking about how it is a core job, the ideas that drive this, these are core jobs and better for morale and helps with retention and they are real jobs and i know that has been not just during this cycle, but for a long time in many departments not just the puc, the idea is that we don't temporary people. people want to make careers and have real jobs and the emphasis

you are making on this is noted and i will put that in right now instead of saving for later so thank you for that. laura, i think you are about ready to dive into the next part of this summary. item 9. welcome again. >> good afternoon commissioners. laura bush, i'm going to present on item 9 and 10. the capital related items. i will provide overview of the two year capital budget, finance authorization and 10 year plan. we won't through the items in great detail during the four budget hearings in january so this is a reminder and you recognize the slides. i will be repeating them.

this 10 year cip has grown by 34 percent or $3 billion. the shape of the cip is different in past years as well. instead of high spending leveling off in the out year we see higher spending in the out years as well. this explain as lot of growth. what you see here is a major new project entering the plan. the $1.5 billion nutrient project in wastewater which ramp up the second half of the plan and continue beyond 10 years. as we noted, this year's capital plan has grown tremendously. climate change is a key lens developing capital plans and where 3 quarters of growth is related to regulatory environmental and clean energy which is linked to climate change. the pie chart is a example of the relatively few subject

areas driving with growth in the capital plan which we covered in detail in the hearing. a look at the 10 years as a whole. the 10 year capital plan total $11.8 billion. roughly half of the funding in the plan is made up of wastewater fallowed by water, hetchy water, power and clean power sf. both years of the budget are under $1.6 billion. shown in the slide, the two year budget is really similar to what we thought it is in the last iteration. in addition to the numbers

here, which relate to project budget only is financing cost of around $230 million added on top and i'll discuss that in the next slide. we talked about that a lot in the last presentation and conjunction with the two year capital budget you authorize debt authorization is needed to issue the debt to support the expenditures. the total in the slides including the funding for the capital project about $2.6 billion and associated bond financing cost of about $450 million. these include issuance costs, capital ized interest, rating agency and disclosure cost. this is total of $3 billion in bond authorization we are asking for. just to close out this brief overview and recap of the information presented in the hearings, i want to leave with the high level take away about

this year's capital improvement plan. this plan is the largest proposed in sense of dollars that allow the puc to provide clean reliable drinking water,b protect public health and environment and provide affordable clean energy. this plan developed balancing the ability to deliver these projects with affordability and need to transparent respond to external cost pressures. this plan was developed with a climate lens. insures san francisco adheres to values by seriously investing in projects that make a meaningful difference towards fighting climate crisis and becoming more resilient to it. this plan is a sustained economic growth creates 10 of thousands good paying jobs over the next 10 years . supports small business and business development in the city and support the city general fund through taxes. the development of this plan is most rigorous to date given focus on the capital planning improvement initiative. the plan is in full alignment

with mayor budget priorities. the project insure san francisco is safer, cleaner more prosperous and more importantly more resilient. thank you and now i'll turn over to-i'll take questions before i turn over to the final item. >> you will. since you offered we are going to gladly oblige. commissioner ajami. >> thank you so much. so, i have a question. maybe connected to this but also connected to what you presented earlier. we have a portion of the capital costs which is revenue funded capital investment and obviously we had this conversation last time and i assume will touch on this a little bit is what happens if over-size this and revenue doesn't come in, do we acquire

more debt to pay for that? there a dynamic we have to think about and wondering are we thinking about that? are there any thoughts or strategies to figure out how we are going to manage this and i do hope that we'll get assuming your presentation might cover the discussion around the revenue uncertainty that we may deal with and the realty somebody has to pay for these things. is it low income community that ends up being more impacted by this? who will be on the hook in different proportions to be able to cover the cost? long question. happy to hear your perspective on that . >> why don't i start and erin can can jump in. what you are asking keeps me up

at night. we think about this the whole time we prepare the capital plan and budget and the focus of the 10 year financial plan, so i say we are going into all the investment with eyes wide open what it means financially for the puc. that is why we do our 10 yearficial financial plan. a outlook with the 10 year capital plan to insure the plans we make to spend the money is sustainable for puc and affordable to customers. that is a new step we are taking this year. the commission adopted a affordability pois part of the planning efforts to insure rate increases we need to sustain this debt we are taking on are affordable to customers. i guess my answer to the question is, we run a sensitive analysis and looked at risk and why we have the financial plan in place. a balance of all the financial information to insure puc is

financially sustainable in the future and revenue to cover the debt service we are taking on. >> i appreciate that. it keeps me up at night too, so maybe you and i should talk some time. exactly. joking aside, it is a big issue and obviously it isn't just the affordability piece, it is making sure we have a financially sustainable utility that doesn't differ maintenance to have affordable rates and not saying that is what you are doing or we will do, but if we have a good strategy in place we can avoid those things. the second thing i wanted to say touch on both things. i appreciate the effort around climate change and trying to bucket these efforts under the banning of climate change and investing money. i would put a bunch of other

things partly because the discussion of affordable and cost and revenue is very much linked to impact of climate change. and many other things we are experiencing. however, there is a opportunity there for us to cross collaborate around enterprises and i know each enterprise has its own revenue stream and own budget and its own bucket, but i really want to see how we as a commission or at least i'm putting myself out saying i like to figure out are there cross-multibenefit projects that two enterprises can go into business together and invest in? for example, yes green infrastructure is great for managing storm water and capturing [indiscernible] but

also can recharge the ground water. obviously we need enough o6 of it to capture what is going on and how much water is underground. all that is important. it can be a water and wastewater solution, so a lot of other things we are doing in the city and trying to figure the different ways we can create that flexibility for to allow these kind of cross collaborations happen not just by saying yes, we agree with that project, but we go into business together. so, that's my other comment and overall observation and happy to hear if you have any thoughts on that too. >> commissioner stacy. >> thank you. i have a few comments and

questions on the 10 year capital plan. i appreciate what a incredibly complicated and thorough process this has been. we have gotten really valuable comments from members of the public really looking carefully at what the 10 year capital plan is and how it bumps up against our affordability metric and you heard from this commission just talked with commissioner ajami how focused you as staff and we as a commission are on that financial planning and maintaining that affordsability and it seems there is a constant upward pressure. we have some projects we don't have data for yet, but know are in the future. the alternative water supply

projects that as they get developed are surely going to add to the costs and i think that the balance that we have here with a 10 year capital plan things are going to change so i really appreciate the process of reevaluateing that capital plan. we dont just act once, wait 10 years and act again, it is a constant evolution with staff, with the public and with commission and that is just going to be a ongoing struggle and ongoing balance that we have and this budget process with all the extra hearings and all of the good public comment we have gotten i think really presses us to think really hard about those issues. i had a couple comments on appendix b. i think there is updating

needed in appendix b, particularly on page 18. i know i already asked staff about this. both the alternative water supply right up on that page i think needs to be updated and needs to include recycled water on the list of projects. i also think on that page there is a paragraph on climate resiliency projects. i think either the title needs to be narrowed or description broadened beyond green infrastructure because you highlighted throughout this process and in the capital plan of how much of the planning is about reclimate resiliency and i think we need to reflect that everywhere, including in appendix b, so i would just-i know we are not adopting appendix b but it is a important document and i wanted to update the two paragraphs in particular. >> we are happy to take another look at that.

i want to highlight, this is only the second year we produced this report and it a attempt to make information about our capital plan more accessible and digestible. you probably also [indiscernible] excel sheet from hundreds of data sheets, which we realize is a bit much to digest, especially for members of the public so this is our effort to communicate better about the capital plan, but comments are noted. thank you. >> thank you. i also just want to confirm i understand some of the increase in the water capital improvement plan referred to in one point as new high priority projects entering the 10 year capital plan, and then as i put some of the documents together it looked like most of the projects including replacement of aging infrastructure into the capital plan. that is the new high priority

projects were, is that correct. it seemed like a general component ander soy i don't have the page but it looked- >> the growth and water is capital plan which includes hetchy water portion as well. >> yeah. >> a mixture of increased cost on existing projects we were already doing in the previous iteration of the capital plan and new projects entering the plan such as the moccasin [indiscernible] big new one and hetchy water. >> yeah. >> yeah. a combination. >> there was a generic title and i think the pieces putting the pieces together from a couple other parts of the staff report that you have added in replacing more of the aging infrastructure always a good idea. >> yeah. >> okay. i think that's it. i have a procedural question

and that is about public comment today. are we having just one period of public comment? >> public comment is at the end for all 4 items. >> i like to request we give the public at least 3 minutes then to testify just to allow one final public comment period. i know we had a lot of hearings, but because there are 4 different matters i like to request we allow the public at least 3 minutes of public testimony if that's-- >> for clarity from you and from general counsel, we can initiate that and is it-we can do it just for this one particular public comment for these four items and we have to take action on that or just can i as chair say we'll do that? does anybody have objection to

that? >> [indiscernible] >> we will for this 8-11 go from the 2 to 3 minutes and think somebody had mentioned maybe mr. warner earlier. that being said, okay-- >> thats it. thank you. >> we'll be there and i had a couple comments but i'll wait until after erin and item 11 are done. thank you laura. any other questions from the commissioners before we go to item 11? >> just if you don't mind. i just commissioner ajami and commissioner stacy, you alluded to some of the adjustments we made in the presentation on climate change and the lens. i just want obviously what we did today was to a attempt to address some issues raised in earlier hearings, but please this is the beginning of the process and by no means exhaustive and how we are going to present things going forward and analyze our operations and

how they are impacted by climate change, so i wanted to you to rest assured that is-beginning of a process in terms how we present information and analyze our information, so that is my only comment. >> and the environmental lens. >> yeah. >> okay. >> thank you. before i hand it over, i want to take the opportunity to thank everyone in the puc again for their incredible work on the budget. this is not just a finance project, this is a whole puc project and incredible to see everyone come together and work on this over the last year. thank you. >> thank you for acknowledging that. >> thank you. so, . i'm here to talk about the financial plan, item 11 if i can get the slides. thank you. so, our financial plans are required by the charter. we are required to do update that goes out 10 years starting

this year we also extended to focus on 20 years to make sure we get a full complete picture of what these plans mean to our customers. this is where all the operating capital budgets come together. where we determine what rate increases are needed to afford those budgets, and where to check compliance with the financial policies. the plans are these huge complicated excel financial models, but we also produce a report that goes into detail of assumptions and data sources to develop the plans both attached to the agenda item today of that report. this year we made significant improvements as part of the capital planning improvement to the financial plans. in particular, we completely rebuilt from the ground up the excel based models. this was a enormous effort and the team spent months and months on this with partnership with the enterprise and infrastructure. we had a particular focus on making sure to bring in more

complicated data and accurate model the way capital project expenditures flow through and impact our rates because we know that is the big driver of the costs. this is the first stage what i envision as ongoing multi-year effort to improve financial planning. we know our agency is facing much more significant more complicated more interrelated issues around finances so we scale up the tools and process and staff needed in order to meet those challenges. i really want to reiterate and thank everybody helping throughout the process. we could not have got this far without their assistance. mubing on to the outcomes of this year's financial plan, this graph which you have seen shows forecast for water and wastewater demand. i say wastewater because the wastewater builds volumes are based on metered water usage so the forecast looks a lot like retail water line on the bottom. the top line is our wholesale water customer and you see in

the graph actual historic usage levls and what we forecast for 10 years sof had the plan. there are some things i want to call out. firsh, recovery from the drought for retail and wholesale xustmers over the next 3 to 4 years. it doesn't bounce back immediately and incorporated a assumption there will be permanent shifts reduction in usage especially in wholesale-air eye where cushmers have greater ability to reduce demand. that is something we see in every drought up till now and expect to see going forward. we saw on retail side a big drop in usage during covid-19 pandemic. right now what we assume we hit a new normal. we are below where we were prepandemic and dont think demand is coming back. we permanent shifts we believe how custer ams use our system work from home, shifts how retail businesses and aufsh are functioning and not expecting that to change so starting this

year we say this is new normal and any changes are more long-term. the pandemic is not an impact anymore. short-term impact we have a lot of long-term factors. long-term population and job groket. long-term conservation such as water efficiency requirement new beldsings have more efficient fixtures and price elasticity modeling the fact when rates go up customers tie to conserve to save money. all these have plus and minus impact on long-term forecasts. i do want to emphasize that our biggest financial risk are usually in the short-term where we have locked in rates, so especially on the retail water and sewer side we already adopted the next two years of rates. if we see huge fluctuations of water sales in those two years it is more challenging to respond to that because we dont have the ability without further commission action to go back and change what we told customers we are going to do and we try to avoid that. we know there is a lot of

interest from you commissioners and the public and long-term financial risks. that is something we will continue to work on as i mentioned we are building big tools to face challenges and continue in research to make sure we meet those issues head on. i think we have the ability to plan. these things usually don't happen over-night barring things like pandemics and we have the ability to build tools and figure how to handle risks in the long run. we'll bring back more information especially as we tackle the next round of water and sewer rates after the two year period when rates are adopted. finally, before i move on i do want to emphasize that this is a projection for financial planning purposes. folks in the water enterprise also develop projections for water supply planning purposes completely different models and different goals. for them they try to hedge against inefficient water supply which means they don't

want to under-froject. for us we try to hedge inefficient revenue to cover expenses which means we don't want to over-project. those two lines will never be equal because they attempt to address separate risks so i want to reiterate that point. this slide is a lat of very small numbers. we included here because we want to show detail. i will not go through every number. you see for every enterprise. starting at the top we have beginning available fund balance. that is cash not appropriated for operating or capital budget. it is cash available for our spending. you have sources of revenues and the uses or expenses. sources minus uses equals net revenue and you add to the beginning fund balance to get to the ending fund balance. down at the bottom you see our key financial metrics. we show the retail and wholesale projected rate increases and again, i

reiterate only the first two years of retail rate increases are adopted every other number shown here can and will change as we get closer when the commission takes action on the rotes. we are showing fund balance as percent of operating expense, the reserves. policy requires that be at least 25 percent for most enterprises. we have two different ways of measuring debt service coverage, how much cash you generate in order to pay off it bonds you issued. the first one the current coverage is required to be 1.1 and the second is required to be 1 .35 per this commission approved debt service coverage policy. finally, we have down at the bottom the revenue funded percentage of capital. this is a policy our capital financing policy that says what is the right balance of revenue funding versus debt funding for our capital plan overall. it requires at least minimum of 15 percent and i want to

reiterate revenue funding is misleading. when we fund with bonds we still pay out of revenues. that is all we have is customer revenues. what revenue funding represents on the line under uses and percentage is cash funded pay as you go capital, so we like to balance that and that is a key lever to think what can we afford to pay in full now versus what we need to pay over longer time period but with interest. as you see water enterprise is meeting its all the financial policy for the full 10 year period. turning to wastewater, same slide, there is definitely a few more challenges here in wastewater but instead of show on this slide i have a few easier to read with graphical presentations. this is focusing on capital spending which you heard over and over is one of the most significant challenges facing our agency. the graph on the left shows not just the 10 year part of the

proposed cip, but full 20year picture of wastewater projected capital appropriations. we want to model this because we know there are big projeths very expensive projects that start at the tail end of the 10 year plan and wement to capture the impact on the rates. these are very large projects and primarily debt funded. you can see that in the total expense graph on the right where the green wedge our annual debt service payments goes from 24 percent to 58 percent. in the 20 year period we model just wastewater will issue $13 billion in bonds all of which paid for by san francisco rate payers. we made a few conservative assumptions as we look at the large amount of debt issuance. we increased in the plan the assumed interest rate we pay on the bonds for the first 10

years. we know interest rates in the united states are very high now. we used to assume 5 percent and increased that to 6 percent. in addition just to give context for what that means, just in the first 10 years that extra 1 percent interest for wastewater is additional $215 million so this did have impact making this plan perhaps more realistic and definitely more consuvative. in addition, we active pursue state and federal low cost loans such [indiscernible] grants to fund our program. if we get those, those could have very low very favorable interest rates. one or 2 percent we have gotten in the past. we don't count on that. we assume we have to pay every single dollar of this plan solely out our own revenue bonds with higher interest rates. if we sell bonds at lower interest or get low cost loans we can hopefully bring this down. this slide shows what this

means for wastewater financial policies. the graph shows ending available fund balance. the black dashed line represents the minimum of 25 percent of annual operating expense and you see we closer to the line throughout the 10 years. we are currently above that red line, which is a maximum line. the idea is if we are above that line we should spend down that money to return money to rate payers and avoid bigger rate increases. that is what we are doing no wastewater will have the big cost we have raised rates to build fund balance. if we hadn't done that the projectsed rate water increase over the next 10 years would be higher so we rely on that as a way to reduce customer burden. the bottom table shows wastewater debt service induncher and current. we are meeting our policy throughout the 10 years but you can see those numbers do get lower over the 10 year as wastewater issues more bonds. that is something we will keep a very close eye on along with capital financing team to make

sure we manage this debt appropriately. putting it all together, this is water and sewer affordability. the average residential customer bill over the 20 year period. you can see that it grows by 8.1 percent annually over the 10 year period driven by the wastewater portion. in 10 years average single family customer will pay about $308 rising to $436 in the 20 year period. this comes barely under the affordability target because of the work the capital folks did. what we can do to bring that down. if that hadn't happened we will be over the line however we are close. i don't think anybody thinks this is a amazing super great way to look so a big priority we beginning is figure how the

bring the cost down. you heard the wastewater nutrient project is medium term big driver so seek extenl funding and work with partners to see what we can do. the hope is what is shown here is really worst case proposal and we can bring these costs down. but we don't want to over promise or minimize the challenges we are facing. turning to power, we have a lot of different issues that face power then wattser and wastewater. we are not a monopoly provider and have to keep eye on competitor rates. the forecast have much greater uncertainty. hetch hetchy generation happens certain times of year and reduced during drought. when we can't generate our own power for hetch hetchy we go out to power markets and buy supplies impacted by market forces beyond our control.

moreover, all compounts of the power supply have seen huge cost in regulatory changes in recent years and think will continue to do so. power and generation and customer usage and rates are all very seasonally different. that means our financial modelerize monthly instead of annual to capture the detail. we developed straetagy to klaess challenges i'll discuss more. this is a very busy slide, so i warn you i'm not going through everything here but i want to illustrate the complexity of the power supply forecast. what this is showing for hetch hetchy on the left and clean power on the right is portion of annual operating expenses, the portion for power supply or delivery not owned by the sfpuc we purchased from other entities. i want to point out a few things. you see going from historic to forecasted side which is the dashed line, our cost have grown enormously enthe past few

years. more then doubling since 2020 for both programs. in hetch hetchy the green bars represent the cost pay to pg&e to distribute electricity. those prose by a lot in 2022 due to new regulatory framework and don't see them going down any time soon. the purple bar represent a concept called resource adequacy. the idea and i will idea of resource adequacy, a regulatory requirement to make sure all power utilities have enough local stable power to keep the grid balanced and prevent brown outs. it is a great idea, but the way it is implemented is very challenging for us. there is not enough resource adequacy attribute around the state for utilities that need it so that is leading to high prices and we have to go out to market and procure it.

the resource adequacy regulatory framework is changing in the next couple years. totally new way looking at things that is complicateing our ability to forecast those costs. to project out the portion of the plan because it is so complicated and has so many moving pieces we work closely with dedicated teams and experts in the power enterprise. we make assumptions about price, we don't choose a favorable price and air on the side of higher one and add a buffer for risk. the red bars represent a power supply contingency. a budget above and beyond what we forecast that we hope will go unspent but include there in the budget so if we need in a emergency situation to procure power we have the budget available to keep things flowing and the lights on in san francisco. while we expect cost may start to level out in the 10 year period, we dont expect to return to cheaper day.:this is

facing all power providers in the state and country. here is hetch hetchy detailed 10 year financial plan. wastewater i show detail here, but i pulled out key areas to discuss on the next few slides. the big cost driver in hetch hetchy are power supply which we talked about and growing capital plan to serve new customers. this is the hetch hetchy average residential bill. on the left the growth over the 10 year period and on the right a comparison to pg&e. we are not a monopoly provider and it is important we keep a eye on that. we are forecasting at the table at the bottom large percentage rate increases for our retail rate customers over the next few years diven by a need to catch up to big increases and expenses we just talked about. the final rate proposal will be brought to the commission later in the spring. it isn't yet adopted.

with that large increase however, hetch hetchy power continues to provide incredible value. you see that on the right graph, the comparison to pg&e. 14 percent and 10 percent rate increase we are still on average 30 percent below pg&e bill for the same usage and same customer. i mention the table shows the general use rate increase just for context in the last power rate study, this is a rate charge to certain municipal customers under-cost of service. we are bringing them up to the same cost as everybody else so on the same rated schedules so percentage increases look high, but they are coming from a very low base and while it isn't on the graph, they pay much lower rates then our retail customers. sometimes half as much so receive excellent savings despite the big percentage increases. finally, here is clean powersf

financial plan. purchase power supply which we talked about represent 90 percent of the program cost. because that substantially different then any other enterprises, we developed different financial metric to better fit the program unique circumstance. we created a reserve policy for clean powersf during the last power rate study. this aims to increase our fund balances in order to meet provide a greater cushion for cost fluctuations outside our control. over 3 years the policy required we get to a minimum of 150 days cash on hand so that we operate for 150 days without getting a dollar of revenue. we need a target of 180 days cash on hand. these are shourn shown in the graph as black line as minimum and purple line as the target. meeting the goals during a time the costs have increased have been incredibly challenging and as reminder we dont operate in

a vacuum. clean powersf could opt out and go back to pg&e so can't just keep raising rates without looking at that. as shown in the graph and table we forecast to meet the minimum reserve level of 150 days cash on hand next fiscal year and hit the target by fiscal year ending 2026, the second year of the budget. here is what that means for customer bills. as a reminder we only control generation portion of the bill. the green wedge in all the charts. the remondayer oremainder is set by pge or fees paid. rates for next fiscal year have not been adopted so we'll be back in the spring to do so. we forecast a 12 percent generation rate increase which is driven by the need to build reserves. this equate to 5 percent inescrooin the total bill when you factor pg&e portion. after the increase, we expect customers will pay about the same as they would with pg&e.

we know pg&e is very large rate increase over the past few years which we cannot control have been a real challenge for customers. we take these impacts seriously but also know we need to put clean powersf on a strong sustainable financial footing so it can continue to be a going concern over the next 1 years. the next forever. clean powersf existence and renewable energy supply is crucial to the city able to meet the climate goals and we are very proud that this program has only existed 8 years we are coming up on a strong financial footing with competitive rates and they reserves strong and put us in a good place so we can continue our operations and scale up to meet our targets of hundred percent renewable power. that is my final slide and i happily take any questions; >> thank you erin. i have a few comments and also thank you mr. hom and mrs. bush.

all 3 for the presentations. this is a major responsibility not just for all you of the staff and workers, but for us as commissioners and as i said during the extensive hearings we went through in the last few weeks, if there was anything that the generapublic or even myself as a commissioner would have wanted to put in a box it would have been the budget hearings. there is a thing about democracy where you have to have budget hearings and not only do you go through the money and budget s and how much it cost, you are explaining how infrastructure works, what the policies are and those many hours we spent leading up to the summary is probably in a nutshell probably the best way to look what the important agency does and any student of government if you have nothing to do and can't sleep and want

to get educated put thon cspan or sf tv and listen to the staff talk about what we do and what we want, because this here people do talk about infrastructure and this is a city that invest in itself and doesn't turn into a place that lets things rot and cares about the citizens so there is a lot of responsibility and just walking through all this i just want to thank you. i do want to emphasize that i think that in the midst of all this responsibility the thing that is so important to understand and know is the 10 year and further aspect of it. even the something that doesn't seem that big relationship with the school district, that is 40 year partnership, but it isn't a static partnership. it doesn't have beginning or end, it is something that absolutely continues and the fact that there is a 10 year budget, there are so many cities and agencies so many

private businesses that boy if they get through one year, man, let's project the second year, they think they are doing a good job. the fact we are sitting here looking at this type of a length is a real statement to being a responsible agency and the work that is done into that is-i just want to say thank you and proud i can be part of the decision makers that are going to be monitoring and looking at this, not just today and the vote we are most likely going to take to move forward towards the mayor office and board of supervisors, but as a continuing process as we meet every two weeks, which is what our jobs are. that's a long way of saying thank you and acknowledging what exactly we are doing here today as commissioners and as the city and i think i don't have any specific questions other then what we had done over the last few sessions.

that being said, commissioner ajami. >> thank you for your presentation, i really appreciate it. want to go back to slide 29. you said something which i want to provide you context. so, on the projection of retail, sorry, wholesale water use, my team at stanford had done tons of studies and what we have seen is basically when you go down from a drought you never bounce where you were before. that's what we have seen. we studied number of cities, the bay area as a whole, you can put the population in there, you can just assume a lot of different things, but we see some rebound, but not a real full rebound, so i just

want to make sure that 136.2 you have, so in 4 or 5 years we go back to that. i think that is very optimistic, which we can be very optimistic, that is in foo, i just want to make sure we don't hang our hats on that optimism too much, because obviously our financial health very much depends on those numbers, right? i totally understand your perspective that water projections are very different. they have different priorities and different objectives they center to look into and here we look at something very much depends how we can financially by sustainable. i asked this last time and hope you looked into this or bring it to me at some point or us as a commission. i would like to see in these [indiscernible] how does slide

35--taking this and looking at slide 35 and see how your slide 34, not 35, trying to see the interaction between the two? not just looking at the mean or median, but if you have uncertainty [indiscernible] sensitivity analysis. where the bottom and top is how this looks. just because for me it is much easier and i know you mentioned we are going to try very hard to make sure these numbers not hit the affordability projections but i want to make sure we can see what happens if the wholesale water rates

demand goes down and also that little sliver we have at the bottom of the retail demand also goes down and then all a sudden somebody has to pay for that debt. i keep repeating this because it is something that is important for all of us to look into as you look at this. >> is that a question? >> excuse me, i'm not finished if you don't mind. so, when we are looking at-lost train of thought. so, i like for us to see that if you dont mind. i assume you don't mind i assuming you can bring it back. we did conversation about revenue and revenue setting and the whole concept of potentially looking into the coupling and i would like for us to actually-we don't need to tie into this budget, but i

like for us to be able to kind of think about that as we think about this change in revenue because we also talked a little bit about operational cost increasing, not all of it is variable rate but a lot is fixed rate, but also our variable rate is also increases so trying to understand the variable portion of the rate is increasing or revenue is increasing so trying to understand how these pieces are fitting together would be very valuable. i love to hear if you have thoughts on the first comment and second one if you can give me a sense of when we can see something like that would be great. >> i will jump in here commissioner. i made a commitment to you that we would do that, so- >> we drop the second one. >> i'll talk with staff and let them get through the budget. i made a commitment about exploring this and i will be back to you. >> fantastic, thank you. only the first one. >> great.

so, the wholesale forecast, 100 percent agree with you we do not expect full rebound from the drought. part reason the number in 4 years 136.2 is over what it was pre-drought is because there is also that long-term impact of some population growth assumed. we have baked in in the wholesale forecast more irgration and people rip out lawns and replace with drought tolerant landscaping. we are not assuming full rebound from the drought. we do see rebound. you can see the last drought around 2014 and wholesale dropping to what was all time low, the 110.8 never been lower then that and did come up, but as you see, not all the way up. we'll keep a eye on that and see where it ends up. the other thing nice about our wholesale customers is we per the contract set rates annually and there a mechanism in the rates that if we come in if the

sales are not high enough they owe us money and if the sales are higher then expected we owe money. a balancing so that helps mitigate financial risk from the forecast year to yearbying off because we have the mechanism to make up for the difference. i will say one thing specifically though on the interrelation between this forecast and our affordability graph. i do want to highlight and i'll flip back to the affordability graph here. if this customer which is average customer with assumed usage that flows out of the model. if this customer cut the usage by half and then every customer in san francisco cuts the usage by half, we would collect the same amount of money, have to double our rates. but what that means is they end up in the same place because the volumes are half as much but the rates are twice as high. so one thing i want to say per capita conversation individual

customers conserving isn't a major factor. what is a major factor is if customers disappear from our service area entirely or costs go up so why i think focusing on the capital plan looks like and see how to control those costs as well as looking at long-term population trends is a big area we'll continue to work on. >> just a note on your comment on the wholesale rate. we are talking 10 year periods. from 2014 to 2023 there have been population changes. obviously covid put a pin into everything that is normal, but the population growth doesn't necessarily reflect a lot of demand growth and i know you know this but i want to make sure public hears, it isn't just because exactly what you

said, the per capita water use declined for a lot of new customers come in eat into saved by others so that is important. i think to your comment on that other slide, slide 34, you are absolute ly right we can increase the rate and double them and end up the same place, but just sitting on the end of the customer end, if i am reducing my use by half and by my bill is still increases it is very much a disincentive so that is why we have to think about all these things as a interconnected integrated system not independent from each other and i know you are thinking about this but i want to make sure we communicate that and remind ourselves we need to look at these things in so many different ways to make sure it captures and i also want to acknowledge, the way you look at the energy piece, i

would love to see if we do the same kind of graph sometimes in the water side because it is very different. it is a little more systematic and easier to track electrons, so thank you. i also before i just hand off the microphone i want to say i do appreciate all the work you guys put into this. personally, it is a very useful process. i know it is very time consumer for the staff, but for us it is such a useful process to have dialogues, engage with the process, learn from you and be able to provide comments, so i do appreciate all the hard work. the ones for you all we see and the ones behind the scenes working very hard, thank you. >> commissioner maxwell. >> thank you. i think sometimes we forget when we think wastewater that san franciscans are the only ones who pay for wastewater.

we look at clean water we have 2.7 million people to share the cost. you mentioned wastewater and water. could you talk about the relationship? when water comes people pay for it and when it goes out as wastewater, can you talk about the relationship a bit. >> now the rates are structured you have fixed monthly service and don't irvay based how much you use and on the water side we have a water meter and you get billed for volume of water. we dont meter sewage but we assume that if you take in a certain amount of water most of that goes back into our sewer system so multiply that by something we call a flow factor which is some goes to irrigating the yard, doesn't ends up down the drain but the rest goes down the drain so the flow factor we get to the volumetric portion of the wastewater bit. there is also i note in the

last rate study broke out wastewater and storm water portion of the bill so the storm water portion of the charge isn't impacted by water usage, just the wastewater portion. >> instead of me having my water go down the drain, if i capture it and put in the back yard i don't get charged for that? >> yeah, we have a whole process where if you have huge yard and ton of irrigation or on-site recycling of water to non potable water you can call customer severs and apply for a change to flow factor and we'll reflect that in the billing. >> great. just to talk about the budget, the budget tells you where you put your money. it talks about your values and what you value and so i think when i think about the lens we look through, when we look through a lens of the environment and social lens,

those are priorities and it is reflected in our budget so i do appreciate all of the talk about our environment and what we are doing. all you mentioned it quite a bit, so i appreciate the mention and now we'll see what it looks like so i appreciate that and i think we have a outstanding group of people that work for san francisco puc and financially you all are certainly a part of that and our policies kind of reflect where our money goes so thank you for all your hard work. >> commissioner stacy. >> i will echo all of the thanks and appreciation for the staff work. there was a incredible amount of information. i will not gev up my noteback yet and i appreciate the transparency and education you

give. i also if i didn't say the last time, i also really appreciate the thoughtful written comments that we get from the public and we did get a number of comments about these demand forecasts and i really think it is important to emphasize how carefully the puc watchs population growth, demand, this is not set in stone any given year. i think it is a constantly evolving piece of information that we are very conscious of both for what we plan for as well as what our plans cost. i think also bosco thinks we are under-estimating the water demand forecast for wholesale cust mers. we had a few comments from mr. warner and mr. dreckmyer that

we are over-estimating. i also appreciate your emphasis that there's the water supply forecast for one purpose and the budget and financial forecast for another, so i just want to emphasize that it is important that this number is going to evolve as our information changes that the puc staff and the commission are watching all of these changing whether it is demographics or water, wastewater amounts, but i think you have done a really great job in anticipating those forecasts and it is so important to get it right for purposes of affordability and also what we need and what we are planning for.

so, thank you. >> commissioner- >> i also like to say to members of the public you keep us on our toes. we appreciate all the comments and sometimes we say, my goodness here we go again, but understand that that is important and that's what democracy is all about. that's what it is about, and you make a difference. sometimes you don't recognize it, but trust me, our staff is saying oh my god, so and so will say something we have to have this right and they are absolutely right so please keep it up and know we do appreciate it and it has been mentioned by a commissioner a number of times about how important you are and you really does make a difference to us, so thank you. thank you for all you do for coming. thank you. >> thank you and before we turn it over to public comment i want to echo what i said, thank

you for the work and everything done and it sounds all most like some type of culmination. it is culmination of the process but all 5 or 4 of us and everybody else will be two weeks from now and another two weeks from now and like everybody says, this is ongoing and really important work and i am also glad to see so many folks here for public comment also and donna, i know when you call public comment, staff have the 3 minutes retriggered up so we can do it? great. donna, open up items 8-11 for public comment please. >> public comment on 8, 9, 10 and 11. i received speaker cards from tom francis, peter dreckmyer, [calling speaker names] if you did not turn in a card

that is okay, just line up against the wall and wait for your turn. >> consider being called, just come to the microphone. welcome. >> good morning commissioners. my name is tom francis the water resource manager at bosca. i want to say bosca supports the budget proposed. for both the water enterprise and hetch hetchy enterprise. certainly have a great financial team. it was off the script here. we are pleased to see that the inclusion of a robust list of projects is present as well as programs. it is a great 10 year cip. bosco reviewed the 10 year cip and provided comments to the commission through a february 5 letter. the comment letter identified 5 specific recommendations granted we want the commissioners to consider those recommendations as part of our or your action today.

yesterday bosca received staff response to the letter. it provided detail and reply to recommendations, but rejected all of basco's recommendations. we urge the commission to consider this and especially in light of the staff response which hopefully you were provided as well. in particular, boscaremains concerns with one response, it is to the first recommendation we made and related to the capital planning improvement initiative. bosca is very supportive of that initiative. i give credit to the general manager and deputy general manager . it is wonderful idea and resulted in a lot of good things. specifically we want a annual report to commission on the capital planning improvement initiative. we think you as commissioners benefit from that. it should include metric to enable the commission and bosca

the ability to identify how well or not well the initiative is achieving the goals, which include removing barrier to project deliverability, addressing staff challenges. things discussed today. the puc staff stated the initiative is focused on process improvement and alignment across enterprises. it includes or will include a brief yearly narrative to you folks similar what you received in september of this past year. that was in our view short. it was two pages in length. a nice narrative we think you need a report. so, in conclusion, our response from staff that we received was a bit troubleling. we believe bosca believe a yearly report that includes tracking metrics is appropriate and we continue to recommend the commission direct staff

accordingly as part of your action today. thank you. >> thank you. next speaker, please. >> hello. peter dreckmyerism thank you for the three minutes and the kind word earlier. i sent you a letter yesterday sounds like some read it. i appreciate that. i started by acknowledging that i think staff really did do a great job putting together the budget. it is a lot of work and it is got a lot more detail, more transparent and i know they are working with information that they are presented sometimes on data and assumptions i don't always agree with. my big question is, how did sales increase 9mgd from last year to this year looking out 10 years when sales last year were at all most all time low

off by one mgd and the state department of finance reduced population growth projections. i encourage you to look into that. another big change from last year is looking out 20 years. the average combined water and wastewater bill has increased 43 percent from last year to this year, so that's the magnitude of the budget impact on rate payers. and i know that you all have inherited a position that has been building for probably 50 years that past leadership kicked the can down the road. a lot of ongoing maintenance wasn't happening and we had to catch up with water in 2008 and now sewer so i encourage you to not leave that legacy for future commissioners and it is

the alternative water supply plan that could do that. mentioned earlier there are two sets of demand projections, one is outside envelope. make sure we don't run out of water which the urban water management plan uses. the other is finance, always much closer, but the alternative water supply plan is where it integrates those together. because if you were to develop the 92mgd to 122mgd that would cost between 19 billion $19 billion and $25 billion double the budget. we can show that demand of 200mgd or lower, which is what it has been for the last 9 years with the bay delta plan in place without any rationing without developing any alternative water supplies you can make it through repeat of drought of record 6 years and the other water agency would plan for that and say we are in great shape.

with rationing and 25mgd you can make it through 8 years, and that 25mgd should be recycled water with denite rifiication, the dual benefit. >> thank you. >> hi. thank you guys for your wonderful comments and questions. i also just say i think the team is talented and i use the example i thought mrs. bush remark on the commissioner stacy's question about the staffing and how you deal with the salary savings is not only a good answer but a model was quite good. however, it doesn't change my view of things and i saw in the answer on risk, it was a great question, but she left us with, i don't sleep at night and that's not a good answer.

what i like to hear is we modeled this and this is what we found and the numbers showed and that gives more confidence. i don't walk away thinking risk is mitigating and bundle in another comment, they use their affords ability model by housing growth. the other one is that came up is sewer. if people come up with home recycling and are there is a problem with the sewer rates. that is one. number two, the commissioner stacy question about reevaluateing which is a great question or comment. i would say the slide that showed that expenses are growing 18 percent in the next two years and only 1.5 is new projects is the challenge. we right now don't have much flexibility to change the next two years and so that's the

long-term nature of these investments is what the risk is and that goes to third comment, which is, i do admire both mrs. [indiscernible] and mrs. bush. they were gracious enough to meet with me once. the short versus long. i think short-term risk is much more manageable. there is enough cash on hand and things we can do in short-term but the fact we get the debt and once you get the debt we are stuck and that's the risk in the long-term risk. the 4th point is remind you this plan, the 8.1 percent average over 10 year is up from 6.6 percent from last year so there is another rate increase and think mr. dreckmyer mentioned 43 percent jump. i think it went from 90 percent to 116 percent growth. the other one-i covered that. the only thing i add is, i

apologize for the comment, but we hope we can do this or that and as a cfo, i would never let someone get away with the hope comment. it is like okay, let's rework the plan and use hope to say, we don't have to increase, not hope to save more moneyism . the last thing i throw out- >> thank you. >> hello commissioners. judy erving, a bay swimmer and independent film maker. i just made a movie about bay swimming called cold refuge and i love it, but i don't love it when i'm swimming through a algee bloom. i am glad that you have a plan to remove nitrogen from the water.

the alternative water supply plan. the $1.2 billion plan, but i'm afraid you will never get to make it real because your basic budget is super-sized. your assumptions are super-sized. two of the assumptions that are way too big are your design drought, 8 and a half years of drought, which was public records requests, people found out would not happen once in 25 housing years, and the second is assuming that the population is going to go up. that also is not necessarily true. so, you got these assumptions and in the past the way the puc

operated the assumptions they made have been off by about 25 percent regularly off. so i encourage you to take at least a year off that design drought, get more water for the rivers, get more water for the people of san francisco, and then you might be able to actually fund these alternative water supply projects that are way down the road for which you are already charging rate payers money for. another thing that i don't appreciate as a rate payer is that i do-very careful about water, and when we were super caerful about water during the drought, we were rewarded with

higher rates. that was a drought surcharge. that doesn't go down well with people, so you have a enormous budget. it's way way above anything that you had before. you have debt service that is way over half of all the money you have to spend. if something goes wrong, we are going to have to pay and we are having to pay anyway in your 10 year predictions. just be careful. >> thank you. >> i have tried many times to get the water supply pipes on our block which are original

and over a hundred years old replaced. as pipes deteriorate the inside crumble and all that stuff flows into our house. i have a particulate filter. this is only two months old. after 4 months it is black. i also have to have another filter in the kitchen to filter more solids that get through the first filter. this is a water reuse for drinking and cooking. i can afford to buy and replace filters but many in san francisco cannot. their water needs to be clean too. a few years ago the sewer lines in the neighborhood were replaced. the workers told me they had to be careful working around the old supply line pipes because they were so thin they would fall apart if nicked by the crew. since the streets were already open i asked the water department to replace the supply pipes. nothing was done and streets paved over. only half the responsibility of

the water department. dont water supply and sewer go hand and hand? there is no need to rip up the streets and 2 and 3 times. this uses other city resources as well. our own city budget needs reduction too. knowing there are supply pipes around the city you can guess there are lots of leaks. not only is this lost water, one of the causes of sink holes in the streets these holes are repaired buts many reappear in the same spots and takes multiple city departments to repair and repair again. please streamline replacement of sewer and supply pipes and work with other city departments to save rate payer dollars. other city departments dollars and more important, provide clean water to everyone in san francisco.

other cities do this. thank you. >> thank you. public comment on items 8-11, the budget. >> good afternoon. my name is mary butterwick a long time resident of san francisco. i am alarmed the commission is facing a real fiscal crisis due to long differed maintenance, over projected numbers, increased cost and declining sales. in reviewing the proposed budget for possibility approval, please consider the following:as a retiree on a fixed income, i am shocked to learn my water sewer rates are likely to triple in the next 15 years with 8 percent average increases each year. how can low income families possibly afford these increases?

the wastewater nutrient reduction program at $1 billion is by far the most expensive capital project in the proposed budget. there is enormous potential for using recycled wastewater to reduce the nutrient load to the bay. reuse needs to be a top priority for this important capital project. within the next 10 years debt service will account for more then half of the estimated cost for the water and sewer enterprises. this amount of debt service may severely constrain the commission's ability to fund future projects. for instance, the alternative water supply plan is not include said in the proposed budget. the projected water supply need is driven by the commission extremely conservative 8.5 year design drought. i urge you to direct your staff to analyze flows, using a 7.5

year design drought and realistic demand projections and then present the results to the public. i do not believe rate payers such as myself should have to invest in very expensive alternative water supplies that will not be needed. thank you. >> thank you. next speaker, please. >> denise louie again. thank you for the opportunity to speak today. this is my third trip to the mic. so, i think i'll start with the most important topic here. it isn't clear whether the emergency firefighter water supply pipeline for the richmond district west of 12 avenue and the outer sunset are included in the capital plan, so i urge you to insure that the pipelines are included and

prioritized in the budget, because as i heard you speak about climate change, the city dense stance of drought stressed trees are like match sticks after long months of no precipitation and in the heat at the end of summer. the pipeline were supposed to have been funded by 2020 prop b money, but are now unfunded. my second point is that, my quality of life has continued to diminish. now i'm a complete miser when it comes to heating my home or using water. yet my pg&e bill recently surprisingly tripled and my water bill keeps increasing. with the combination of these increasing utility bills is

just-can i speak for everyone? it means less money for everything else. it means decline in the quality of life. okay. so, thirdly--one clear way to save money is withdraw the lawsuits and let the state water board take urgent ly needed measures to save the bay delta ecosystem from total collapse. plea tell how much have related staff and attorneys cost us already? thank you. >> thank you. >> commissioners,eme wrr asking you a question. who will speak for the salmon? i see these presentations and i

want to ask you, why are you not doing something for the salmon? i want to ask you how much do you pay for the water in the tuolumne river? and how much do you charge others? i'm asking you to figure out the differed maintenance on your dams. you are looking at things that should be looked at but you dont look at it. why don't you talk about the fires? what have you done to mitigate the fires? what have you done about the sea wall? and sea rise? what are you doing about there forced main at marine street

that has a band aid? so, you can cook up figures and it is like you know going to a accounntcan go to 10 accountant and each gives you a different type of this. commissioners, you have to ask yourself, what is viable and sustainable? your staff has to ask themselves if they have empathy for the indigenous people. if they have empathy for those who live on a fixed budget. if they have empathy for our infants, our children, our youth, our elders, those that compromise health. if you ask ourselves why aren't

we replacing the pipelines and we have the money? why are we not doing the right thing? why aren't we having a dialogue with the indigenous people? water is life. thank you very much. >> thank you. are there anymore-[indiscernible] this is for the microphone? you are going to speak about items 8-11, correct? >> yes. yes. yes. i am hoping to project- >> it is working. >> there it is. thank you. spreck rosecrans restore hetch hetchy thank you for the opportunity to speak. the budget is a impressive piece of work. thanks to the staff for their work and thanks to you the commission for reviewing it and

everybody for for the very serious responsibility of providing the services of providing water and power and sewer and everything the puc does. it is a important public service and i thank commissioner maxwell for her comments that it is okay, here we go again from public comment and that sort of stuff. appreciate that. i also appreciate commissioner stacy's comments about well, we have to keep reviewing this as we go and in that way i want to be a little broken record on groundwater and we have on the screen here the groundwater banking project in the last 30 years throughout the state and how it is the most cost effective opportunity for improving water supply and i know that the general manager

has indicated he well look into it and bosca indicated they will look into it more. the trick is get tur lock and maybe modesto and others to agree but other agencies through california have done it and i urge you to try and get the water, protect your rate payers. i note that in most cases it is a exchange so you are still drinking the surface water, it isn't always the case. you folks have a great program, your southeast water banking program in colman and with daly 60 is a great program but there is a lot hoar more to be found in the central valley so urge identify to look into that over the next few years and see if you can get low cost water to improve supply and protect your rate payersism thank you very much. >> thank you. public comment?

please. >> hello commissioners. my name is jacob evans organizing with [indiscernible] thank you for the opportunity to comment. the affordsability of $11.8 billion plan rely on population growth and water demand projection difficult to be confident in. the last 9 years water dliby [indiscernible] the last year. california department of finance [indiscernible] downward in 2023. water rates projected to double by 2024 water use will decrease as san franciscans attempt to lower water bills. the plan relies increased water demand projected demand of [indiscernible] monthly water sewer rates are projected to raech $436 [indiscernible] if water demand is over projected affordability will be surpassed.

alternative water supply intensifys the scenario. [indiscernible] cost between 19 and $25 billion. unsustainable to finance through rate increases on top of the rate [indiscernible] puc needs to reexamine the drought preparing for a mega drought [indiscernible] less water supply will be needed to saving the puc billions. thank you all. >> thank you. is there anymore public comment? seeing none, we will and thank

you for coming. for that public comment, seeing that we are going to be taking in order not all together but take four separate votes starting with item 8 the biannual operating budget so if i can have motion and second for item 8. >> i have a comment. >> comments. commissioner ajami. >> couple things. thank you everyone for coming. it is always wonderful to hear comments and push back and feedback and i always tell my students feedback is a gift. if you approach the right way and i do appreciate that. the only thing i want to say is, feedback needs to be direct to us, not staff and that is very important because i don't like our staff to be called in person like this person said this and this is not correct.

i understand and appreciate what you are trying to convey to us, but i do not want my staff to be named as part of the process, so just want to put this out there because i think it is important and i know we all appreciate what the staff is doing and just remember they are dealing with 2.7 million people and we want to make sure this is a respectful dialogue in every way and you want to make sure very encouraged to listen to feedback and look back and say how they can improve it. that is all i wanted to say thank you. >> i repeat, we will-any other comments? item 8, which is the biennial budget i entertain a motion and second. >> i move to approve. >> second.

>> roll call, please on item 8. >> paulson, aye. maxwell, aye. ajami, aye. stacy, aye. you have four ayes. >> item 10, which is the 2 year capital- >> sorry, item 9. >> item 9, which is two year capital budget, motion and second, please. >> move to approve. >> second. >> we have roll call, please. >> paulson, aye. maxwell, aye. ajami, aye. stacy, aye. four ayes. >> item 9 passes. item 10 the 10 year capital plan, a motion and second please. >> move to adopt. >> second. >> been a motion and second. roll call on item 10, please. >> paulson, aye. maxwell, aye. ajami, aye. stacy, aye: >> item 10 passes. item 11, which is the 10 year financial plan, motion and

second please. >> move to approve item 11. >> second. >> motion and second. can we have the roll call for item 11 please? >> paulson, aye. maxwell, aye. ajami, aye. stacy, aye. four ayes. >> thank you everyone and all four of those items have been passed and that part of the major work we are doing is done. we'll continue. so, next item is communications for information. any communications we need to know or public comments? seeing none, then do we have-what is the next item? the next item is commissioner

items. >> i have a comment on that. >> i want to note, excuse me commissioner, our general manager has to leave. mr. ritchie will come to the dais. thank you. commissioner ajami. >> so, we had this conversation and sad to see all the member of the public left but we had the conversation before to think about moving to adding remote public comment to our agenda. i do think we are very different from a lot of other commissions in the city. we have customers beyond our own 7 by 7 borders and people who live in the south bay or peninsula that have to drive here. and also we have a team up in the mountain in the watershed. we are serving the a broad range of communities and think it is pornts to make sure we

are accessible. people can reach us, reach the commission, talk to us when they need to, so i would like for us to consider to actually add remote public comment to our public comment and i don't- >> i suggest that what we do is you make a motion to that effect and second so we can talk about that and debate it for a vote if you make that proposal. >> okay. >> or we can calendar that. then we can center the discussion at that time. we don't have to do it now. >> thank you, that would be great. >> it noted commissioner ajami is asking for that to be agenda for the next meeting. okay. we good? okay. do we need public comment on that since that has been discussed and put together? >> yes.

>> let us-now everybody left us, we will get the public comment item for public comment. is there anybody in the general public that streaming on the iphone as they walk to the parking car? seeing none, then we shall move forward. why don't we read the next item is read matters heard during closed session. >> public comment on the matter to be heard during closed session which is item 16. conference with legal counsel. ralph bower, et al v. city and county of san francisco san francisco superior court

case no.: cgc-23-605730 date filed: april 10, 2023 proposed settlement of personal injury claims with the city and county of san francisco to pay plaintiff aidan gauper $400,000 and plaintiff cory maryott $400,000 in exchange for full and final releases, subject to final approval by the board of supervisors. >> any public comment on the matters during closed session? seeing none, motion as to whether to assert the attorney client privilege regarding the matters? >> so moved. >> i'll second. >> motion and second to-roll call, please. >> paulson, aye. maxwell, aye. ajami, aye. stacy, aye. four ayes. >> okay. we'll go into closed session. [meeting reconvened] >> the commission is recommending the board approve the settlement, which in item 15, so is there a motion to- >> item 16. >> item 16, sorry.

motion whether to disclose discussion during closed session. is there a motion ? >> i move not to disclose. >> second. >> motion and second not to disclose discussions. roll call. [roll call] three ayes. >> meeting is now adjourned. thank you very much. >> yes. >> thank you. >> item 16 has been-- [meeting adjourned] .

>> a hi, i'm karen fry a project manager and sfpuc and the bureau of environmental management honestly i've not considered a public sector job i realized this was an opportunity to work on large capital projects from san francisco all the way to our hetch hetchy and the yosemite national park i work with engineers and city attorneys and scheduled and we all work tom nolan e together on

the project. >> the excavations are in red we'll have the interference to go under the street. >> my next project is the largest project in the water system improvement program this is the southeast plan that involved a lot of kworpthsdz with the community groups and public when 9 commissioners such the planning commission and the board of supervisors or this ftc commission they help us in city hall this is a beautiful building it really is the inner workers of the building you feel you're in the heart of government and it's exciting to be part of that

>> san francisco recreation and parks department offers classes for the whole family. rec and parks has a class for everyone. discover what is available now and get ready to get out and play. henri matisse. frida kahlo. andy warhol. discover the next great artist. get out and play and get

inspired with toddler classes. experience art where making a mess is part of the process. classes and the size the artistic process rather than the product. children have the freedom to explore materials at their own pace and in their own way. talks love art, especially when they died into the creative process -- dive into the creative process. at the end of the classes, they have cleaned and washup. of.com great way to get out and play. for more information, visit sfrecpark.org. that out and play and get into

the groove. rec and parks offers dance classes for seniors. first-time beginners or lifetime enthusiasts -- all are welcome. enjoy all types of music. latins also, country and western. it is a great way to exercise while having lots of fun. seniors learn basic moves and practice a variety of routines. improve your posture, balance, and flexibility. it is easy. get up on your feet and step to the beat. senior dance class is from sf rec and park. a great way to get out and play. >> for more information,

>> [music] art withelders

exhibiting senior art work across the bay for 30 years as part of our traveling exhibit's program. for this exhibits we partnered with the san francisco art's commission galleries and excited show case the array of artist in historic san francisco city hall. >> [inaudible]. call me temperature is unique when we get to do we, meaning myself and the 20 other professional instructors we are working with elders we create long-term reps i can't think of another situation academically where we learn about each other. and the art part i believe is a

launching pad for the relationship building:see myself well. and if i don't try when my mom again. she may beat the hell out of mow if i don't try >> seniors, the population encounters the problem of loneliness and isolation even in a residential community there hen a loss of a spouse. leaving their original home. may be not driving anymore and so for us to be ail to bring the classes and art to those people where hay are and we work with people in all walks of life and circumstances but want to finds the people that are isolated and you know bring the warmth there as much as art skill its personal connection. men their family can't be well for them. i can be their fell and feel it.

>> i don't have nobody. people say, hi, hi. hello but i don't know who they are. but i come here like on a wednesday, thursday and friday. and i enjoy. >> we do annual surveys asking students what our program does for them. 90 plus % say they feel less alone, they feel more engaged. they feel more socially connected the things you hope for in general as we age. right? >> and see when i do this. i am very quiet. i don't have anybody here talking to me or telling me something because i'm

concentrating on had i'm doing and i'm not talking to them. >> not just one, many students were saying the program had absolutely transformational for them. in said it had saved their lives. >> i think it is person to support the program. because i think ida elder communities don't get a lot of space in disability. we want to support this program that is doing incredible work and giving disability and making this program what supports the art and health in different way bunkham art as a way of expression. a way of like socializing and giving artists the opportunity also to make art for the first time, sometimes and we are excited that we can support this

stories and honor their stories through art. we hope the people will feel inspired by the variety and the quality of the creative expressions here and that viewers come, way with a greater appreciation of the richness what elders have to share with us. [music]

as it gets for me. okay great. good morning. good morning. i call the san francisco department of disability and aging services commission meeting of wednesday, february 7th, 224. to order. i am the commission president, janet spears. this commission meeting is being conducted pursuant to the provisions of the brown act. as noted on the agenda, the members of the public may observe this meeting via sf gov tv. org and sf gov tv channel 78 and they may offer public comment by calling the public public comment phone number. i'd like to welcome the members of the public and staff who are watching us on sf gov tv to eliminate background interference. all panelists and presenters that are presenting via webex