so with that, i would be happy to answer any questions. >> our compliments to the team that we know. it's a pretty daunting thing. i have two questions. were there leaks in the dam? what was the magnitude? >> well the seepage there -- first thing, we always like to make all dams leak a little bit. even on cottage country dams leak a little bit. the seepage is extraordinary leakage. that is when you see that there is a real sign of trouble is when you see a big change and water that is running with the muddy color to it, that is when you have great concerns about it and so we need to do some investigations, potentially other things to understand what was going on inside the dam and see if we need to make any physical changes to it. we have possibly will have to. >> how long were the residents evacuated? >> they were evacuated, that was thursday afternoon.

i believe we had the residents in the fish hatchery property on sunday. it might have been yesterday. the moccasin residents were allowed to go back to their residents on saturday. there are still a couple of residentses that are downstream. they're on the other side of highway 120. those folks have been allowed back but they don't have any water supply so that's where we're trucking water to. >> commissioners, anything? >> i have a question. mr. richy, could you comment on the article i'm paraphrasing here. stated there were consultants that inspected the dam within the last five years. they were very quick to suggest the failure was due to our

oversight. they contradict each other. i would assume in the past. it's the fault lie if it's too premature to talk about that. >> well, we inspect our dams routinely. the division and safety of dams are inspected annually. they released the last five years of inspection records, which showed the damn was in good shape. in fact in this case, it was truly an overwhelming event that created the bad situation. the article last saturday's chronicle had quotes from two outside experts who actually have never been to the dam, not even seen it as far as i know. i know for sure one of them was talking hypothetically because he didn't have information. these are the kind of things you would be concerned about and look for. i think the headline writer with the very unfortunate headline

that said those outside experts are blaming san francisco p.u.c. for this. they were not doing that but obviously that's something to look at. certainly, the division safety of dam staff that was out with our staff on thursday afternoon concurred that our staff took all the necessary actions to deal with it. the spill ways work. they didn't clog up with things. it was just a massive amount of water in a very short period of time. so yes, our communication staff has been in communication with the chronicle and certainly they've just modified the headline at least in the online version to could be a problem. i think that's where we all are. we all are going to look at the whole situation and see are there physical problems with the dam. of course it was built in 1925. so it's an old dam. it has performed well for years. are there things that we need to do differently about how we manage it? do we need to modify the space? all those things are on the

table in terms of getting at what happened, why and is it safe going forward. those are the critical conditions we need to answer and we're prepared to answer them. >> well, i thought it was unfortunate but as you probably know, the headlines are not written by the author of the piece so it's the headline guy writes it. >> yep, i've had that experience too many times. >> anything else? >> thank you, very much. >> thank you. >> is there any public comment on this item? item 9, the bay area water supply report will not be heard today because they were unable to attend the meeting. item 10 is a 2018 water and wastewater rate study update. with mr. sandler.

commissioners, erik sandler c.f.o. of the p.u.c. and i'm here to present, with some colleagues, a number of items. set the stage on april 10th, you will have before you recommendations to make adjustments to water rates, sewer rage and water and sewer capacity charges. and in may, there will be a number of items before you related to miscellaneous fees and charges as well as rules and regulations regarding sewer service charge for parcels. what i wanted to do in this particular presentation, is to highlight for you some of the work that we've been doing and some of the items that you will be seeing in the next few meetings. so in terms of major topics, i'll talk about the rate study you've been hearing about over the past 18 months.

provide background with some overview of the rate-setting process. some of the elements of the scope of the study and some of the highlights of the proposed changes to rates and charges. and then the second half of the presentation, it's going to be provided by simone hudson and john scarpula and really it's addressing all of the work we've been doing over the last 18 months with respect to affordability and the impacts of our rates and charges on low-income customers. and i understand four years ago when you were considering rates and charges, the commission emphasized that it really wanted to understand a little bit more than this over all percentage of medicinmedian household affordabilities. when we went through the budget process two years ago, i remember commissioner vietor,

you encouraged us to do a lot of work. i know this is a long presentation but the work that the staff has done to address this question, i think is tremendous. and a lot of resources were dedicated to get a better picture of the situation. so, i'm going to start with rates and charges. so just providing a little bit of background with respect to this study, the city charter requires that every five years we engage a third-party expert to conduct a cost of service study. and what is important is that really the state constitution prop 218, requires that rates and charges be set based on cost of service. the requirement of the city charter and the rate study is the main document that insures that we can set rates based on

cost of service and we comply with the legal requirements of the state constitution and the city charter. 218 also contains not just the rates setting and also some procedural requirements that guide how notified rates. provide them an opportunity for public comment as well as protest. the package that we're talking about is a 4-year rate package starting july 1st, 2018. so this has been an effort that's been conducted over the past 18 months. and it has engage a lot of the organizations, not just the rates and charges team, but a lot of the organization as well as outside stakeholders such as the rate fairness board, citizens advisory committee and

we have here a variety of the work streams we've engage in so we stained the consultant in the april-june 2016 timeframe. we spent the last year we spent some time with you reviewing a number of critical financial policies that performed the policy. that formed the policy context of this study. and we've conducted some of the main efforts in the rate study itself as well as community outreach and again the rates and charges will be before you aprie july 1st, 2018. so i spend a little time talking about the statutory framework in which we set rates and charges. now i'm going to spend just a moment talking about the policy framework. over the last year or so, we had a number of policies before you for revision and consolidation, enhancement, and actually a few new policies. the rate pay era insurance policy is the over arching

policy that guides rates and charges. sufficient to meet environments of the agency to appropriately budget for repair and reconstruction and replacement of assets and setting rates and charges to achieve certain policy goals to properly fund the organization to ensure customer equity, environmental sustainability, predictability of rates and charges, simplicitying anand of course affordability. there are a number of financial policies. i listed them here. fund balance reserve and capital financialing policy. they influence the revenue requirement. those policies we talked about when we were reviewing the budget in january and february as well as the 10-year capital and financial plans. they impact the rate and charge process through the revenue requirements.

these are the real -- the three elements of the scope of work with respect to the rate study. the first is the revenue requirement scope of work and the revenue -- [ please stand by ]

>> -- there needs to be an adjustment in fact revenue requirement of about 6 or 7% a year for water and wastewater enterprises. and we also understood that of the increased revenue generated from these adjustments, 80% it was targeted for investment or capital, and that would either be directly funding cash capital investments or bond issues to make those capital investments. the next work stream in the rate study relates to the cost of service. this is kind of the boring financial and engineering exercise, but it's absolutely critical to ensuring that our rates are compliant with state

law. we made a number of updates under the hood with respect to the rate study that really enhance the quality of the work product, and this is really a collective effort of not just the rates and charges and finance team but also engineering team and the various folks at water and wastewater enterprise, so i wanted to thank -- this part is really an organizational effort. some of the key things that we addressed, we really looked at the system peaking factors, the peak hour, peak day, seasonal peaks, and really tried to refine this information on a system level and a customer class level, because these -- that's the main way that we allocate cost to achieve our tier structure and -- for our residential customers.

we also went through a detailed allocation of operating expenses, we reviewed all of our asset allocations. we made a major improvement in terms of how we credit revenues from our wholesale customers to different functional categories and cost categories, speak we did a completely new and costal indication of bureau expenses to the enterprise. so before i talk about any changes to rate design, i thought i'd review for you what our current and water rate structure for you here is. we have fixed charges and variable charges. fixed charges are based on either meter size or account. and then, you have residential -- or you have variable charges that are based on meter water used or estimated discharge to the sewer system. so in the water rate structure, we have a fixed charge for -- that's based on meter size. for residential water customers, we have variable charges that are two tiers.

the first tier, for a single-family residential customers is four units, and the first tier for multi-family residential customers is three units, and they have different prices. for our nonresidential customers, the usage characteristics vary so much that we don't have tiers, and we currently have some different volumetric rates for specific categories of customers, and one thing we looked at was simplifying the volumetric rates for nonresidential customers. on the water side, you've been hearing from me for the past three years, we do not have a waustwater charge for customers. all of it is build on a volume2rdvolum volumetric tier. there are three chemical

characteristics, and theose ar the constituents that are used to characterize the strength as sewage, and there's a designed strength for residential customers and then for nonresidential customers, we have strengths that are really based on industrial classification codes, and so depending on the nature of your activities, we estimate what the strength of your sewage is in terms of discharge through the sewer system, in terms of pod, css, and oil and grease. so that's how we currently charge our customers for water and sewer service. what are some of the changes that we're proposing in the recommended rates and charges? so we're proposing a fixed monthly service charge for water, which we currently have, and then also a small fixed monthly sewer charge for the wastewater enterprise.

we're proposing phasing in the fixed charge four wastewater over a four year period so it can mitigate the impact to low volume users. it would be about $1 peryear increase in the rate for users. one way of looking at fixed charges is to consider the share of enterprise revenue that's considered with the fixed charge. so california urban water conservation council recommends a rate structure that recovers no more than 30% of your water revenues on a fixed charge so that there's an incentive to conserve that resource. as you can see here, what we have is a graph of what percentage of revenues from our water system are collected on a fixed charge. that's about 13.9% currently. we're proposing to keep that

the same percentage in the rate package that we'll be recommending in april. and as i mentioned, the wastewater fixed charge will increase over the four-year period and ultimately result and recover about 2.6% of enterprise revenue on a fixed charge. so now, let's talk about the variable charge for residential customers. we're making note, the cost of service study indicated that the tier break points for single-family residential customers and multifamily residential customers still make sense. we updated the cost allocation to refine the difference for the two different tiers. so what we've allocated to the second tier is a share of the peaking cost. by customer class we've

included the cost of conservation, water supply diver diverseification, and the needs to meet water distribution, storage. we've proposed a change to those rates over a four year period and ultimately it results in a slight compression of the tiers over time. so in terms of nonresidential variable charges, we're proposing pretty significant simplification of how we charge our nonresidential customers for rates or for volumetric charges. we have a number of customers that we have slightly different rates for. these are a small percentage of our overall rates for, and it doesn't make sense to keep

them. so to meet the overall simp plistic overall rate structure, we're proposing to move them all to the same rate. now when you look at all these changes, here's what's happening with the average single-family residential bill. what we have here is the combined water and sewer bill broken up by fixed charge and variable charge. this represents a typical single-family residential customer use of 5.3 units. we're talking pennies per-gallon, and currently, single-family residential customer using this amount pays about $108 a month. you can see how that breaks down in terms of water, delivering high quality quarter and collecting sanitary waste and treating and disposing of it safely. the proposed increase will increase the monthly bill by

$10, so each year, the monthly bill will go up by $10. now, one of the things that we, of course, our rates are set on based on cost of service, but we also like to look at how the combined bill compares to peer agencies in the bay area, and what we have here is a graph of water and sewer charges in various cities throughout the bay area, and these represent fiscal year '18 rates, or current rates and charges. you can see here that the puc in the median here, 107.66 -- $107.66, so $108 a month that was on the prior slide. with the adjustments that's being proposed, it would be $116 permonth, still in range of the other -- you can imagine the other bars here will be increasing annually at a similar rate. one thing i'd like to point out is that the sewer charge for

the puc includes not just sanitary waste but stormwater collection and treatment and disposal. we're the only combined system on the -- in coastal california, and actually california. sacramento has a small combined system, but in order to really to an apples to apples comparison, you need to look at the cost of stormwater in these areas, as well, so that's kind of a challenging thing to do because each different area deals with stormwater differently, and it's hard to identify those costs. so we have a bit of an apples to orange comparison because our sewer charge provides a higher level of service. one of the new features of the rate and charge proposal that's before you is the concept of a temporary drought surcharge.

this is a strategy that's been utilized throughout the state in particular as a response to last drought. what we're talking about is a surcharge that's triggered by commission action related to the water shortage allocation plan. now, that's a specific plan contained in the urban water management plan that you've adopted that essentially calls for a combination of voluntarily-mandatory reductions in use that is a response to shortage allocation. so it's only triggered in the event that our system has a supply shortage and not triggered by a general -- generalized call for contradrot the state level or conservation at the state level. and the way this surcharge -- the way this surcharge would work is the -- that would come before the commission, pursuant to the urban water management plan's shortage allocation, would request, would declare a

particular stage of the drought, of the shortage allocation plan with a direction for reduction from customers. staff would then calculated based on estimated sales volumes and estimated expenses at that time what the surcharge should be. in no event would it be more than what has been noticed to the customers on the 218 notice. it would be a surcharge on all the volumetric rates on water and wastewater, and it would be removed when the commission removes the shortage allocation designation. and so now, i wanted to turn -- are there any questions for that portion of the presentation? okay. so now, i wanted to turn the mic over to my colleague,

simone hudson and john scapulla who's going to present all the information that's been presented to our low income customers. i'll set the table for a second. you'll remember that the measure of affordability that's utilized by the epa and the industry is really a level of service in our sewer system improvement program is a comparison of the water and wastewater bill as a percentage of median household income. we have some programs directed at low income customers. you had requested us to get much more information on this, and this is that existing affordability metric. and what you can see, the water bill is graphed in blue, the sewer bill is graphed in green, the combined bill is graphed in gray, and you can see how those compare to the median household

income over time. and we looked at this when we looked at the ten year capital and financial plan, but this is the launch point for the rest of our inquiry. and so now i'll turn the mic over to simone hudson who is a city hall fellow in the finance department and is now working in the community benefits group, and also, john scarpulla. >> thank you, eric. good afternoon, commissioners. i'm really glad to be with you today to share about our affordability work which has really been a collaborative effort across the agency to think critically about how we can serve customers burdened by their bills, low income customers, and take a holistic view of affordability as an agency. so we've developed four goals, calling these the affordability project goals, to frame a variety of work groups. so the first is to improve

assistance to customers in single-family residences. as eric mentioned, we have a cap program to provide assistance to customers who are direct billpayers to the sfpuc and under 200% of the federal poverty line. so what we wanted to do was to identify the universe of customers who are burdened by their bills, and the universe of customers who could be eligible for cap, and then think through improvements to that program through the data analysis, so i'll go into that data work in a couple of slides, but that's our first goal. the second, my colleague john scarpulla will go into, but as part of a citywide effort, really lead by the justice project, to look at how fines and fees are hurting low income folks across the city, we wanted to look at our own fees and shutoff policies and see how we could make some changes.

this third goal, we're really excited about some innovative approaches that instead of being a band-aid solution to the issue of cost burden households, actually support families to become more economically stable as a way of addressing affordability in a more long-term and sustainable manner. so i won't go into this third goal in detail, but we have some exciting partnerships in the works, especially with the office of financial empowerment to leverage resources and programs already that exist to be able to better support our customers. and our fourth goal, to evaluate assistance to multifamily customers. we're aware that about 60% of sf residents are not in individually metered households. they don't pay directly to the sfpuc, but many of them are struggling with the high cost of living in the city, so we are embarking on a pretty

exciting area of work to think through what are some of the creative ways we can support perhaps nonprofit housing providers, single-family residences -- excuse me, sro housing for multi-family properties to provide tangible and sustainable support, so that is continued work. but overall, these goals represent a pretty holistic approach of afford jabl, moving away from a bill for a how's hold, thinking about how we as an agency can enhance affordability in san francisco. so i want to dive into the first one and share information that information in the area for single-family residences. in -- we wanted to analyze two questions. the first is how many

households are eligible for our customer assistance program cap, and again, these customers who are eligible are direct bil billpayers, under 200% of the federal poverty line. those are our initial criteria, and i've included the graph here to show you what example incomes as to what the threshold of 200% of federal poverty level are. the second question is how many households are paying more than 2.5% of their income on their water and sewer bill, and what are their characteristics? so as another way of looking at who's burdened by their bills, we wanted to take this threshold, this 2.5% metric, which eric mentioned, and compare it to median household income. in order to get a more detailed picture, we thought about well, what if we look at who in san francisco is paying above 2.5%

of their income on their water and sewer bill and what are their characteristics? so using the american community survey, we could answer these questions, and this is the new data that we're so glad to have. you may ask who are our current cap customers? this graph shows -- each dot represents a currently enrolled cap customer, and you'll notice that these dots are concentrated, of course, in correlation with where single-family residential housing stock exists throughout the city, so this is of course not illustrative of where low income folks are, but it is where our cap program recipients are in single-family homes. so we wanted to ask, well, what's the universe of cap eligible households? of all sf households, a portion pay their bills directly to us,

so that's this blue circle here, direct billpayers. everybody perhaps pays through their landlord or another measure. but we can cross that with the low income households under 200% of the federal poverty line, again, our eligibility criteria for cap, and our question was who is eligible for cap? the answer is about 26,000 households. so those are households under 200% of the federal poverty line, directly paying their bill to the sfpuc, and of that, we are serving about 1,200. i'll note that agencies all over struggle with evenrollmen and the data that i have that i'll share in a moment helps us focus our effort. so the second question we wanted to analyze is who's burdened by their bills, you know, setting aside the criteria for cap eligibility,

who's paying above 2.5% of their income on their sfpuc bills? so using the american community's survey, we get a lot of great information. first of all, we can learn who pays their water and sewer bill directly. we can learn what they pay on their bill, and we can learn their household income. so we used this to calculate what share the water and sewer bill represents of a household's annual income, and so we're defining this cost burden calculation at households paying above 2.5% of their income on their combined water and sewer bill or defining those households for the purpose of this analysis as water-cost burdened. so as a very basic level, we can learn that about 13% of our accounts are water cost burdened households. we can also learn about the income of folks who are water

cost burdened, so this graph shows the blue bars represent burdened households paying above 2.5% of their income on their sfpuc bill. the red bars are nonburdened households. so i think this tells us kind of two things. one is that the majority of burdened households are below 200% of the federal poverty line, and that also means that our cap threshold of 200% fpl actually does include most burdened households. other take aways from this analysis, again, about 19,000 households are cost burdened -- >> i'm sorry. can you go back to the last chart and step me through that again? >> sure. was there a particular question, commissioner? >> just do it again. i'm a little slow on that. >> oh, sure. so the way i like to think about this is if we have two

rooms, one is a blue room, and one is a red room, and in the blue room, we have a representative sample of burdened households, those who are paying above 2.5% of their income on their water and sewer bill. and in the red room, we have folks who are paying under 2.5%, who are nonburdened. if we're looking at the blue room of cost burdened households, and if we're looking based on federal poverty level, the income spread in that room, the majority of the people in that room are under 200% of the federal poverty line, about 70% of the people in that room. an additional portion are under 300%, but certainly, when we're looking at cost burdened, and of course it aligns with the fact that we're measuring cost burden based on household income, the majority of those cost burdened households are under 200% of the federal poverty line.

>> what is it -- what does it mean, looking at the last -- the bottom paragraphs that it's -- these are households where it's 500% or more of the median -- no, of poverty level? >> yes, exactly. >> and that would be about what amount of income? >> that's a great question. i believe the calculation is about -- well, for 200%, a family of one is about $32,000, so maybe it was someone -- we're calculating it. it's a great question, but certainly, we would not consider someone who's 500% of the federal poverty level to below income. >> and what would the circumstance be that such a

person was water cost burdened? >> right. so the way we're thinking about this is if a family is above 500% of the federal poverty line, but still, you can see a portion of them are cost burdened perour definition, they may have a very large water bill. again, our -- our equation here that is a little hard with the text, but x is greater than 2.5 if there's a very high bill or very low income, most water burdened households are burdened because they have low income, but a portion of them are burdened, a small portion because they have extremely large bills, perhaps they are big water user dos or they hav massive garden or pool they fill quite frequently in relation to their income. >> okay. >> so for a family of one to be at 500% of the federal poverty

line, their income would be up around $80,000. >> okay. which is -- that's a -- just trying to think in terms of our median income. >> about 87,000 perthe census of 2012 to 2016. [ inaudible ] >> i'm sorry? >> family of one or is that a family of two or four or -- >> that's a figure for the median household, which i think is about 2.6 people. >> okay. >> but again, around 500% of the federal poverty line, those folks, even if they are burdened, this analysis is really trying to get at who's burdened because they have low incomes, and what we can see here is that the majority of households are burdened due to being low income, and that's

really who we are trying to serve through this analysis and our recommendations. so again, with our key take aways, we can also learn with this analysis that cost burdened households are predominantly families and female-led households. our census analysis also showed us that in cost burdened households, as compared to nonburdened households, there is a higher share of residents who identify on the census as over 65, as asian, hispanic, or black, and a higher share of households that are linguistically isolated, which means no one in the household over the age of 14 speaks english in the house or better. and we also learned that the southeast has the highest rate of burdened households across the city. so again, this data is particularly useful as we think through how we want to develop our outreach programs and

really be intentional about that outreach. so in terms of next steps, we are working a way in response to this data, but also our agencies response on affordability in a few different areas. so the first is to provide stream lined enrollment and verification processes. in particular with cap, our customer assistance program, we are trying to remove bare jerz to enrollment f to -- barriers for customers to really make sure if folks need assistance, they can get it, that burden is eased for both customers and customer services. as i mentioned, we're also developing and executing a more robust outreach strategy for our assistance programs and the programs in development around

financial empowerment. and lastly, on that note, we are partnering with the human services agency and the office of financial empowerment to more effectively support customers by leveraging existing programs within the city to provide more long-term support, and i'm happy to take any additional questions before introducing john scarpulla. >> first of all, thank you very much. it was very interesting information. i am curious, on the last point, and i know it's not the -- the topic of this discussion, but i want to go there, any way. when you think about those areas of partnership, what kinds of things are you contemplating or what do you envision there? >> thank you for that question. so it's quite a range. with human services agency, there's a citywide effort to develop a verification tool that would utilize their tremendous customer data and -- and create a database that would allow our customer

services staff to easily look up a customer if they're applying to the cap program and asking for assistance. instead of asking that customer to bring in a lot of paperwork and fill out numerous forms, we could more easily verify that they are under 200% of the federal poverty like using hsa data with customer permission, so that's one area of work. with the office of financial empowerment, we're thinking through how to develop financial interventions. for instance, if a customer is frequently delinquent on their bill, we know that there may be other things going on in that household that -- like a financial empowerment program could support to help them become more financially stable, to ease the burden on customer services staff who may be frequently in touch with that customer. so overall, this -- this work is certainly in a more -- in a

phase of exploration, but we're excited to be able to leverage those resources that exist to more effectively support customers. >> and is there a component of this -- your -- your enumerator was the amount of water used. is there an element of the program that goes after that, as well? >> another great question, so conservation is absolutely front of mind as we think about how to support customer affordability. we're really glad our current cap program brings that in quite strongly with our tie in of water evaluations that will be highly encouraged for cap applicants. these will be offered as a way to say look, we have ways that will allow you to conserve water and save money. it's a win-win. so conservation is front of

mie mind. we're really mindful for master meter properties, customers sometimes need some educational and programattical programs, and we're thinking how to be creative as well to support low income customers and multifamily properties. >> i have a question, and i think i have the answer, but i just want to verify with you. so my question was what percentage of the tax payer -- to the total taxpayers are eligible for our three programs, and i think you came up with 13%? >> so another great question. so in terms of our three programs, the one that residents who are paying their bills directly to the sfpuc who are in single-family homes, that program that's available

is the cap program, customer assistance program, and we've identified that 26,000 customers are eligible, and that's 26,000 out of about 146,0014 147,000, so i think that's about 17, 18%, thank you eric. but -- but as your question perhaps gets to, that's not the full universe of our customers. i don't have the number top of mind, for instance, of multifamily properties, what portion may be eligible for multifamily discount support. we can definitely follow up with some of that information, but of single-family residential rate payers, about 18%, it sounds like, are el i didn't believe for our cap program is what we've learned through this analysis. >> okay. then what -- on slide 27, what

is that 13%? >> so those are the cost burdens customer base of our single-family residential billpayers, our direct billpayers. so of all of our households that are in, you know, single-family homes throughout the city, about 13% are paying above 2.5% of their household income. >> i see. okay. >> that doesn't necessarily equate to being cap eligible because we don't have an eligiblity criteria rated to this, but we are proud of the eligibility criteria that we have of 200% of the federal poverty level does capture a large portion of the burdened household base. >> commissioner moller caen: so that leads me to ask, and i don't know if we could ever get a handle on it, what would these programs or what are

these programs costing us? i'm sure that's not an easy fast number because of many elements of it, but i would be curious to know, perhaps, at the end of all this discussion, we can come up with that because i think that's a perfect -- you know, that's something to put into the mix. >> absolutely. that's a great suggestion. >> commissioner kwon: okay. anything else? so we're going to go into public comment. i have two before me. >> pardon me. i don't mean to interrupt you, but john scarpulla who will share the additional fees on shutoff work. >> good afternoon, commissioners. john carpulla with the policy and government affairs team.

>> john, before you start, i just wanted to -- about the cap program, one of the things that we're really focusing on working with the mayor's office is to get a dedicated source to help fund this because we know that with prop 218, this may be problematic -- >> president keane >> commissioner moller caen: and i know there's many questions. >> all right. john. >> one more question back on the prior side, when we said single-family home, was that single meter home, so there may in fact be more than one family living there? >> yes. to be cap eligible, you must have a single meter and pay directly to the sfpuc for that meter. >> okay. but if it's a multigenerational family, it would count as a single-family home? >> yes, i believe so.

>> okay. thank you. >> okay. john carpulla, policy of internal affairs. third time is a charm. i'm ready, so the-- specifical how fees and shutoffs impact low income customers. there's been articles not only? industry magazines, but in local and national newspapers and magazines. as part of the rates analysis this cycle, staff identified fees that may disproportionately affect low income kpucustomers, on may 8t we plan to provide a plan for your consideration. however today i'd like to focus

solely on fees related to the water shutoff process. now, there's a lot going on on this slide, and i'd like to slowly walk us all through it together. so this slide displays the timeline for a monthly bill, from day one, when a bill is sent off to the customer, all the way to day 70, when an account may have its water shut off for nonpayment. the data on the chart regarding how many -- i'm sorry. data on the chart also showcases how many bills went through these various steps in fiscal year 16-17. in fiscal year 16-17, our agency sent out just over two million bills to approximately 175,000 customers. on this chart, again, day one is when -- is the day when we send out our monthly bill to all customers. of the total two million bills we sent out last fiscal year,

over 95% made payments to the sfpuc within 45 days of the bill being issued to the customer. at the 45-day mark, we mail out a reminder notice to those customers that haven't yet made their payment. last year, approximately 60,000 bills did not make payment during the 45 days after bills were sent to customers, so this can be seen in the column labelled day 45. you can say there's approximately 60,224 bills. after we sent out the reminder notice at day 45, 85% of the noticed recipients made payment to the puc prior to hitting day 60. to about 50,000 of the bills made payment while 16,000 of the bills were still not paid by day 60.

>> can i interrupt? this is the greatest graphic i've seen since i've gotten here. it's really easy to follow. >> thank you. i'm a union man, so there's a reason for it. at the day 60 mark, sf puc staff physically goes out to the building -- to the billing addresses and posted a 48 hour notice on the door of the property, alerting the customer that their water could be shut off if they do not make a payment within 48 hours. there's a $55 fee associated with this posting. so last fiscal year we posted this notice around 9600 times. at the day 70 mark, 88% of those that received the 48-hour notice on their front door had paid their bill. from days 70 to 74, sfpuc staff will proceed with shutting off water due to no payment. last year, the sfpuc shut off water 1,189 times due to no payment.

please note that these are not necessarily unique customers, and sometimes it is the same customer having their water shut off multiple times during the year. sfpuc contact dph to advise them that the properties will be shut off. additionally, sfpuc adds a $55 fee to the bill when the shutoff occurs. the average shutoff length is about one day. generally, when a customer has their water shut off, they come in and make a payment almost immediately. the sfpuc currently has a third and final $55 fee for turning water back on, so if for example, a $100 bill goes unpaid, and the customer goes to shutoff from nonpayment, their bill goes to $275 in that period. the majority of all bureau

really reduces the amount of shut offs that we have. so let's take a look geographical geographically at where our water shutoffs are. please note the larger dot is a customer that has had their water shutoff multiple times. the majority of our water shutoffs occurred in three zip codes in the south and southeast of the city this year. clearly, there are areas that have higher percentage of shutoffs than other areas. now, customer service bureau,

the customer service analysised much of the data. we propose to retain the fee associated with the 48 hour notice. 88% of those that are posted with the 48 hour notice pay their bill prior to shut off. now we are examining the amount of this fee. it is currently $55, and we will likely recommend a minor reduction in it. we also propose to eliminate the fees in turning on and shutting off of the water. the reduction of these fees will reduce the burden on people struggling to pay these bills. the staff believes that the current $55 fees for shut off and turn on are punitive, and turning off the water is enough of a penalty and motivates the customer to action, which is shown by most shutoffs lasting only a day. staff also suggests that we

monitor the customers that move slew the shutoff process to identify any unintended consequences. for example, if we move through these fees, do we have more shutoffs? that isn't what the end goal is, so we want to continue to monitor the unintended consequences. so getting back to may 8th, which is the date we're going to bring a plan for miscellaneous fees. we're going to bring other miscellaneous fees to you, again, looking at the situation to negatively affecting low income customers. again, we will be back in may, so happy to answer any questions. >> commissioner moller caen: thank you so much. it's so helpful. i'm curious, on one of those slides, something that simone was talking about, i'm trying to understand this actual population and what's going on because there was that one graph that said that they were

not enrolled in cap, but we also heard there are not a lot of people who are eligible who are enrolled in cap, so it makes me wonder how much information you actually have on this population. i assume these are low income people, and they're not paying because they can't afford it, but i didn't see that. is that true -- and then, i appreciate that you need to get a little more data on them, probably, to let us know that. >> so a lot of the data that simone was able to pull was from the census. the data for the shut off purely comes from puc, so the census doesn't track, for example, you know, if someone's water was shut off, so knowing their age, gender, racial identity, we don't have that info. all we really have is, you know, are they cap, are they enrolled in cap, what's their address, basically, the basics that we collect. >> commissioner moller caen: right. >> and so -- but it's a very challenging question cane ca. >> commissioner moller caen: i'm just wri