for demanding san francisco purchase this wildly expensive and unnecessary equipment to connect public facilities to pg&e's grid. the appellate court cited the untie competitive practices. while pg&e may site generic safety and reliability concerns for bogus and expensive requirements the dc appellate court called their bluff stated the corporations is holding san francisco host table to deny new customers. it is no coincidence that san francisco moved to broader use of public power and good faith efforts to purchase the distribution infrastructure. pg and e is increasingly difficult to work with. this should concern all of us.

from affordable housing projects to community repcenters, tombs, the safety and infrastructures. baths rooms for muni drivers. the actions delayed construction on the most critical projects in the city during a worldwide pandemic increasing costs $18 million over past three years. i wish i could say was unusual behavior. as we are acutely aware. it will finish the criminal behavior related to to pipeline explosion and facing criminal documents for the wildfires. if this company post bankruptcy to turn over a new life shining attention on what it is doing

reveals it is the same anti competitive dangerous practices in san francisco as it is throughout the state. some of is enough. i introduced a resolution that my colleagues joined urging pg and e to cooperate and calling the department to provide quarterly reports on the tat susof projects preparing to use city plow were. we have hoisted meetings where we crack projects along the city department staff we worked out one off and add hock agreements to move the projects along or more affordable housing in december. the quarterly reports continue to tell the story of outrageous

delay and expanse. they inflict by our resident bees. there were of of 68 projects in the 2021 report. every district is affected. the report how manies how pgae has unjessie electrical equipment to each and every traffic signal in the city which could take up norms amounts of public space that is not feasible. i look forward to this hearing today specifically from the san francisco public utilities commission to help explain these developments in more detail. for the sake of time we invited two of the many city departments whose projects have been meg

fill enclosed. we invited t g&a as well. i believe the vice president is here to present and answer questions. if there isn't any additional open remarks i will turn it over to sfpuc general manager for opening comments. >> thank you for calling this and thank you supervisors preston and peskin for allowing me to join you along with our assistant general manager for power who will speak later. thank you so much, supervisor. you summed it up and identified why it is we are here. unfortunately, we are here today

about an ongoing problem. this body is too much where. continued obstruction here in refusing to connect to the electric grid unless unnecessary and wildly expensive equipment is added. these projects include styles home less abtheir's museum. in june 2018, 31 projects faced the roadblocks. since then 1200 pro jets. there are 68 active projects that need to be connected to the grid. you will hear from barbara heal. outside the rare agreement with

several affordable housing the behavior has showed few signs of improving. they have delay the healthcare facilities now to muni shelters. one goal here. time me competition -- sometime styme competition. we are fighting to protect consumers. there was a recent bright spot. last week a federal appeals call over p.g.e. in two years that p.g.e. is using to delay or limit the city's ability to serve long time customers. one you serve small power loads.

long time customers we have served for decades. that other aspects later. the court sided with san francisco that they filed at attention to what they were doing so it was anti competitive. that decision was a clear victory in fair mess. it is clear they are holding public housing and public projects hosing this requires careful scrutiny which it doesn't get. it also underscores why we should own our own local electric distribution network rather than regulators who is a

convicted felon. the issues before the court centered on the pg&e whole same service under rules adopted by the federal agency committee. >> pg&e $20 million to serve facilities providing city services. pg&e is to stymie competition that been obstructing public projects for decades. the contractor limited the ability to serve customers. now demanding unnecessary equipment before hooking up to pg&e electric grid. one example. pg&e equipment would have required 30 by 20 by 12-foot feet of space to serve the san

francisco genhospital to power a light and hand drier for muni praiseters on van ness avenue. the cost was $500,000. appropriate electrical equipment costs $5,000. in fairness. pg&e backed down on that project. it doesn't dispute the fact that is their position at least initially. pg&e is demanding the city construct equipment for high voltage power connections. we maintain secondary connections with lower voltage are appropriate connection types for these projects. that is used for these customers all over pg&e. we appeal to the dc circuit court which ruled in the city's

favor. you may hear from pg&e this equipment for high voltage power is needed for safety. that is one argument they made to the court and the court reconvicted because it wasn't backed up by evidence. in fact, the court found the orders on the issue do not reference any specific risks to safety re rely ability with to the san francisco request. similarly, you may hear p.g.e. hear the high voltage standards are standard between utilities. the court also rejected that. san francisco connects to pg&e at numerous small.s of inter connection rather than large points as typical for utility inner connections. the court found in favor of pg&e didn't explain why the industry norms reasonable and why the

san francisco geographic configuration which differs from other utilities. close quote. the court found that they did not provide sufficient justification for the conclusion. i will note one more observation from the court on this topic. the court wrote. quote. this presents a troubling problem to potential anti competitive effects of administration of open access tariffs. more than a cents tree ago the congress authorized the system to provide the cheap power but also to ensure competition in its retail power market. faced with claimed that pg&e was frustrating that by treating its own retail service preferentially and refusing customer service it fell short

of muting the duty to ensure that rules or practicing affecting the whole says rates are just and reasonable. it is those anti competitive effects serious concern to us. i think should concern all of those in san francisco. residents win when they get clean power from safe reliable utilities. that is what the san francisco public utilities commission is. pg&e has shown itself to be something different. i will hand off to my assistant general manager barbara hale on the specifics of the projects. barbara. thank you, supervisors. >> thank you, supervisors, for hearing this matter today.

i am barbara hale, assistant general manager at the p.u.c. we operate clean power and meche power and the pedestrian lighting services. 70% of the electricity in san francisco as clean power. we serve 380,000 electric accounts. under the state's community choice aggregation model. under be that model we provide electric spry and program services. this is a partnership. pg and e provide the rest and customers pay the bill. the program which is the focus of the hearing today provides retail electric service to 4600 customer accounts as san

francisco's public reowned utility. they get a heche bill. we fund and operate our street and pedestrian lights. here is the basics how it works. we generate power putting water supply to work in the sierra. you see the clean power over the transmission lines we own and to what i will refer to as electric highway operated by california independent system operator and to distribution system pg&e opens and to customer. we pay pg&e $20 million per year for use of distribution. red on the slide. part of our cost that is included in the he t.c.h.y power

bills. rates are in the files. the wholesale service. the federal regulatory commission is responsible for the rate and certainlies of service are reasonable. the requirements are not necessary for safety re rely ability. i need to check. i am still seeing the first slide. are the supervisors seeing the slides change? >> we are. this map on slide 3 was presented at the hearing in juno

report on these issues. each icon is a project dispute with pg&e at that time. you can see the legends. civic institutions randall museum, recreation facilities like the pool, the senior housing renovation and infrastructure like the p.u.c. west side recycle project. city facilities providing service. by inconsistent process and equipment requirements. that was june of 2018. next slide 4. it shows the latest report. number of projects affected by pg&e obstruction has increased. we have 68 projects in dispute more than double june 2018

impact. next slide gives detail among the examples. sf unified school districts. cleveland elementary is undergoing renovation. exciting times for the school district. pg&e requires oversized equipment. additional $500,000 in costs though that program. rec and park and s.f.m.t.a. are here to speak to their projects and i will hospital down to the mohpd programming area. here is an area of progress. pg&e and the city agreed for affordable housing to move forward. this is limited. only applies to new development with no existing rehab that the city is funding. 100% affordable. no mixed income projects.

it must be on city land. finally, some p.u.c. projects. where to avoid further delays we invested in primary equipment to add 500,000 cost. fingers crossed we make our opening. we can begin to provide service to the community there. we have recycles water pump station. if pg and e did not complete we will have to install primary switch care. this is important to offsets the use of drinkable water to irrigate golden gate park when is important in this drought period. these are examples of pg&e's obstruction to the city meeting the priorities. we are talking delays in priorities more affordable

housing, medical facilities, recreation centers. the de carbonization projects are at risk as they require unnecessary oversized equipment. this wayses dollars and time as we redesign the changing rules. we are talking $19 million in the last three years. you can see the details in the report we submitted. pg and e updated the tariff with a filing that went into effect april 2021. just exacerbates the issues. rates are significantly increasing. an $800 per month bill for distribution service under the proposal would be a $4 million bill. thankfully together with other parties we got that knocked back

to $1.6 million per month. we see the pg&e no longer want to include new secondary connections and new connections to the downtown would be prohibited. longer timeline for inner connections with the april 2021 filing. p.g.e. is no longer allowing unmuted load. this is significant impact to the city. we will dive deeper on this one with slide 8. the new filing prohibits all unmetered loads including existed connected loads by being served by the city. that includes streetlights, trafficnals, wi-fi, pg&e requires all unmetered loads to be served by primary equipment.

this wouldry choir as make or construction project, extensive work that would cost over $1 billion. not a good investment of city dollars. we still needy electricity service to these loads. they would become pg&e customers, not he t.c.h. y customers. they asked to make the determination effective februar. results for the city again increased electricity cost, loss of city revenues and reinvestment dollars. decreased control over city infrastructure. result for pg&e? more new customers, more revenue, less competition. we protested that december filing and asked for the maximum

five month suspension. pg&e asked to let it move forward irrespective of our protest and further consideration. pg&e said request should be subject to refund not in our view a business like approach. it is an approach that maximizes disruption. today was an or suspends matter of determination. we encourage efforts to reach settlement before hearing procedures commence. we have attempted to sit down with pg&e on these matters and continue in the about to do so. we have a small window of time for productive conversation. we hope pg&e come to the table to be fair and reasonable distribution service provider for san francisco. i am happy to answer any

questions. greg is with me from our power team to assist me. thank you very much for your attention. >> supervisor melgar: i want too leave this slide up to make sure i understand. this is unbelievable. pg&e is saying that the only way they will allow san francisco to continue to provide he t.c.h. y power to streetlamps something we have been doing forever we would have to put one of those boxes where? one of those boxes or how many boxes on the streets? >> what pg&e proposes is for every point of connection of unmetered service to their grid

we would need equipment like this. at each point of connection we may have one, three, six streetlights behind that point of connection. this equipment would be placed based on the existing connections. >> what does that mean in reality? does this mean one box for every industry streetlamps is that what we are talking about? >> yes, yes. >> we have 25,000 of those? >> 25,000 streetlights, yeah. >> i want be to do the math sheer really quick. >> you understand the streetlights are you there out san francisco. >> supervisor melgar: they are saying the only way we will let you continue to provide clean reliable safe energy which you have been doing for the past hundreds of years to the

streetlamps you own on your city streets is to put over 8,000 of these boxes that are massive all throughout the streets of san francisco? that is unbelievable. we can't do that. we don't have that much land to put 8,000 of those boxes. >> supervisor ronan and that we generate the electricity for from hetchy. >> it was outrageous enough when they were requiring us to put the boxes to power affordable housing unit and it took away one unit for families desperate to have that. to now power the streetlights? unbelievable. couple more questions. i will turn it over to my

colleagues. can you explain a little more what the decision today did. basically pg&e was says that decision on our streetlamps was was going into effect tomorrow. did they prevent them from doing that starting february 1st? >> yes. they granted our request to suspend the notice of termination. they said, yes, you have got five months to work it out. if we don't workout a solution with pg&e they will be ready to have hearings on these matters and we will be back with pg&e saying let's move forward subject to refund.

it would be today all over again. that is why i am saying we have gone along in the past. sometimes we are successful with affordable housing agreement. i would love to have similar conversations productive to address this unmetered load issue. >> unlike homes where families use different amount of electricity every month depending if it is cold or hot or cooking more or for whatever reason. i would imagine the america's use is consistent with streetlights because they operate in the exact same way, for the exacted same hours every month much the year, is that right? >> that's right for decades they

paid their bills by calculation of the lighting hours, conassumption. it is a known quantity. if pg&e is successful and they become the retail elect are trick service provider for the streetlights and traffic smalls they would be unmetered and would bill on such a calculation under the pg&e proposal. >> that is all my questions. colleagues, any questions? supervisor peskin? >> supervisor peskin: thank you. maybe this is a conversation tomorrow in closed session. the answer might be privileged. it seems to me that the only venue shouldn't be in the

nation's would tolwith appeals to the washington, d.c. court. is there a 17.200 business and professions claim, riko claim here? this seems nuts. it is insane. are there other things we can do in a court of competent jurisdiction to stop this behavior in san francisco or the state of california? if you are not comfortable answering that. that is a question for attorneys. we have the general manager, anyway. >> i will pop in here. something i probably would not want to talk about here. rest assured i am in continuous conversation with folks in my former office about options that

are available to us there. every option is looked at. >> thank you. we can talk about it tomorrow in closed session if it is appropriate. >> chair melgar. >> supervisor melgar: thank you. i had a question. there are other municipalities around the state that provide public power. i wonder if they have the same issues with pg&e if they are targeted as well. if there is an effort to band to do something along the lines what supervisor peskin was questioning about. i will leave that for closed

session with respect to the treatment of our municipalities. san francisco as they were reading from that case. san francisco is different. we don't have a standalone service territory as a publicly owned utility. we serve customers right next door to pg and e. we serve that and a third of the bank. we don't have a grid of our own. that is the way the system was built out over the decades. we don't have a fellowship with other municipal utilities who have clear boundaries between geographic boundaries between their territory and the

territory. >> their boundary is the entire island. >> no pg&e electric. >> thank you. if we quantify how much this costs us? >> we have estimated over $1 billion to save that load for he t.c.h. y. we include in the quarterly report the spreadsheet that shows how much too city departments and p.u.c. have incurred out of pocket costs associated with these disputes, redesigning, buying equipment, have to pay contracts because the project is off schedule

those are collected in a spread ship with the report that we do around $19 million at this point. that is actual costs the city has incurred historically because of these disputes since we started keeping track. >> thank you. >> i know supervisor ronan we have m.t.a. and rec park witnesses as well. i didn't mean to forget to call for them. >> i can call them up. thank you so much. i do want to appreciate aaron johnson, regional vice president. i will call up the project manager for rec and park and then acting chief financial officer for m.t.a.

>> good afternoon. i will try to share my screen here. >> thank you so much for calling this hear on the pg&e issues impacting our important recreation projects. they are on schedule delay and

cost increases to fulfill our commitment be to the community are impacted. since the last time rec and park was here at land use in 2018 to discuss these issues, negative impacts pg&e had on projects increased. as an example these are two projects with issues finally now nearing completion and resolution. francisco park and the pool. both experienced cost increases due to the pg&e caused delay. the park was impacted by the unnecessary requirement to tie into power two city blocks away from the park. there was delay in the connection dispute, to reduce the project accepted the requirement resulting in additional work and conduits, additional design review,

unforeseen utility conflicts and delays in inspections. the cost and scheduled impacts are significant. it was energized on january 5, 2022 to set our opening date. pg&e caused delay at the pool to open to the community. the delay turnaround on reviews. the pool is now scheduled to open february 7th. those are great stories. we had huge delays. we are really concerned about the current projects and future impacts in relation to the wd3 interim agreement and primary switch requirement. on the right you can see the averages we are looking at in terms of costs for delay and some of the issues we see across

projects. the pandemic has shown parks and rec space are critical for everyone inault parts of the city. they provided a space to say healthy in social spaces. this is a space comparison for primary switch gear they are requiring on all projects. it is larger than a small restroom. about is size of an outdoor gym and quarter of the size of our clubhouse. this is space, recreation and open space permanently lost to pg&e infrastructure that is not necessary. new park improvements are coming to the community late. delay means increase costs unforeseen. for contractor overhead and city

staff costs during months the project is delayed. it creates domino effect leaving the next project in the pipeline delayed because rec and park staff are working on the delayed project. it has to absorb 500,000 to 700,000 to pay for this switch gear. we are losing an outdoor gym, community fund and dog play area. this is the majority of the budget for many of the rec and park trail projects. these are correct projects facing scheduled impacts. golden gate park. design called for moving the meter 10 feet. in the plan view the red dot shows location of the existing meter and how that location is in the middle of the plaza.

red rectangle to the right where we propose moving the meter is the size of the primary switch gear should we install. you can see impact that would have. requests were made to approve waiver. it would lead to unforeseeable delay and associated cost escalation without any sense the waiver would be approved. rec and park is moving forward with the project leaving the meter in the current location. the design. this rec center project does not change electrical load under wd3. it will require electrical service. on the plan you will see two red boxes showing potential sizes ofthe switch gear.

one bedroom apartment size is taken away. this has constrained budget funded through 2020 health and recovery bond and impact fees. this cannot absorb delay in cost including escalation due to delay. recreation and park is partnering for a new recreation center and gym. the center will provide a much needed recreation center south side of san francisco. electrical load does not require primary service. under wdt3 without waiver they require high voltage electrical service. on the plan you can see the size of the switch gear. space and size taken away from recreation space permanently. we cannot afford delay. we are partnering for block 3

park. play features and gathers for trees and plantings and small restroom. the electrical load does not require primary service. this team has requested a waiver from the primary service requirement by applying for secondary service with a retail agreement. under -- [indiscernable] shown in the red box. placing the witch gear size of one bedroom amount surrounded by high density buildings does not make sense.

two parks in the network of waterfront parks in india basin. 900 inness is going to bid in weeks. the electrical service application before april 15th to be considered. pg&e required primary electrical service. it has been delayed. the project to remove the pump. ocean beach will avoid installing the switch gear nearly equal size. all projects and those on the right side require service agreements with pg&e under the

wdt3 agreement at risk of schedule delays and significant cost and permanent lost of recreation space. all recreation and park project electrical loads do not require primary electric service. the cost over ages are ripple effect on the next park train or rec center. reducing scope. the biggest impact is on the permanent loss to switch gear structures of one bedroom apartment unnecessary. pg&e are barriers to fulfilling our commitment to the community. when we are required to build

unnecessary infrastructure we are not delivering a new rec center or play field. thank you for calling this hearing today and all allowing us to share the impacts we have experienced and concerns about the future especially under the terms of the wdt3 agreement. we hope this hearing will result in changes which will improve city coordination with pg&e including honoring waivers for the community. that concludes my presentation. i am available for questions. >> any questions?

>> thank you. we will hear from mr. brewers. >> acting chief financial officer at m.t.a. my regular job is program manager for the agency. one element is our electrification program which is important to allow san francisco to move to an all electric transit fleet. i will talk about that. that is in the future. it is something we are very concerned about. as you know, as part of our climate plan we want to transform our entire bus fleet to zero emissions battery electric. we have been working towards moving to a full electric fleet for nearly a decade now. we are currently piloting vehicles and have the project to start with charters. this will require nearly $1 billion in investment in electrical infrastructure across

the city. one of the test vehicles now. as the supervisors know the mta spent hundreds of millions of dollars on the fleet. with the schedule risks time of

police procurement is high risk for the city. these battery electric vehicles require power. we will increase power requirements across the city. i believe the mta is one of the highest users of power in the city. we are proud uses of the power. again, we are dependent on the infrastructure to get the power to the location and to the fleet throughout san francisco. this is going to require significant logistical planning to make this work. if we don't have the successful reliable partner it will put billions of dollars at risk with the transportation infrastructure and climate goals the city has for itself. two very specific examples. with our first example trying to

get in pilot chargers. the service agreement when we prepared the presentation was 5-12 months late. on the back end. imagine we are looking at hundreds of vehicles, billion dollar facility where we will require this level of power. there was an 8-12 month delay to get chargers for 5 to $10. imagine when we look at the entire fleet. barbara mentionedthe traffic si. they are key first point of keeping streets safe in san francisco. example we spent many years working on the traffic signals. pedestrian count down signals, updating visibility of the traffic smalls in the city. we were not able to turn on until 12 months after completed.

that puts the safety of san franciscans at risk. we are not able to start this important infrastructure. summing up, it is important. we want to transform the transportation system in san francisco. we want to move to electric and implement important safety improvements across the san francisco streets. we need a reliable partner. the risk and cost and delay we have seen is unacceptable and will make it very difficult to contemplate programs. i am happy to take questions. >> thank you so much. any questions? thank you. appreciate your presentation. now it would be great to hear from mr. johnson, regional vice president for pg&e.

thank you for being here. as you can tell we are troubled and frustrated here in san francisco. i am very curious to hear what justification you have for really holding our residents hostage with this anti competitive behavior. i am looking forward to hearing from you. please begin. >> thank you, supervisor ronan members of the board of supervisors. thank you for having pg and be e today. way of production i am aaron johnson. i am in a relatively newly established role as regional vice president. account ability for all operations gas and electric and operating unit in the bay region. for us we have that defined as

san francisco, sam mateo. contracosta and alabama meadda county. i hold a operating meeting every morning to bring together all lines of business to meet customers needs across the entire business. personal introduction i am a 23 year resident of the city. i was born in the city and grew up visiting my dad at the rec center. i live in the inner sunset. thank you, supervisor melgar for representation. i raise my family here. ride my bike to the office every day downtown and have been an active member of the community involved in organizing longer hours at the only outdoor public pool in the city, the mission pool. this is my city, too, i am fond of it and excited to see the projects move forward.

i am an engineer buyback ground and love getting things done. i spearheaded the project agreement. i came to energy to clean it up. i fell in love with the service in this business. in this role i would like to be a great partner with the city and get some things done. energy infrastructure is hard and complex. i think we will be more successful working together. that will always be my approach. i did want to go for a short presentation and then respond to questions. i would love to speak to a few items that have come up in the previous presentations. we have four priorities i want to highlight with our relationship with san francisco. first is safety.

reliability. continued investment. partnership. we will go through each of those. we start with safety. we have a new c.e.o. that has drawn a line in the sand. everyone and everything is safe. we know we have a long way to go to earn back the trust of our customers about our safety performance with the company. one of the ways we are doing that is setting very clear standards in the city of san francisco. we have a patchwork system of rules and regulations that have been enforced in some instances and granted many exceptions in others how we operate that system. we recently did a survey of the 15 largest utilities in the united states that provide 75% of the load. there is no other city or utility in the united states

that provides the kind of service that san francisco receives from pg&e in this sort of patchwork and piecemeal fashion the way we provide electricity here. standards are critical to safety. our regulatory filings are designed to make the standards clear so everyone can plan appropriately. we are not moving through one off by one off basis. >> it has be far the highest and best reliability customers experience less than one out age a year for 50 minutes. average is 90.

average for p.g.e. is 100 in the rural areas. san francisco is by far and a way receiving the best reliability around. >> our investment in san francisco is quite impressive. we have been a partner every step of the way in the most important energy projects. 25 years as one of the projects i was able to work on was closing of hunters point power plant and then potrero power plant to leave san francisco which used to get 45% of the energy to transmitting the power to the city. we have built a nice solar plant on the reservoy. the vast majority comes from the

long transmission lines. pg&e made investments to make sure the power plants would close and we would continue to improve reliabilities. we have over $1 billion investment for several high profile projects. new substation on the south end of the city to address homeland security events with terrorist elent a number of years ago. relocating the outdoor substation next to where the hunters point power plant was. we are going to move that across the street to a world class ark secretary designed indoor facility at the request of the community and city. we will move that and doing a similar project down in potrero

illinois by the old power plant pier 70 on the old power plant site. these projects will improve reliability, increase redundancy, key to rely ability. they will make san francisco more resilient in the event of an emergency. move to the next slide, please. >> over the last several years we have a strong partnership with the city about how the various wholesale tariffs are implemented in the city. i will speak to that in a minute in more detail. we prioritized the priority projects in affordable housing to move forward despite change in tariffs with exceptions for city-owned housing. schools and parks are

prioritized. we have engineers to work through the projects anchored nation meetings with many city departments monthly to make sure we are working through all details of the project where we all have opportunity to come together and work more closely to make sure things can get built in a timely fashion in the city. i guess i will speak to the matter that first came up. we do have this relationship around wholesale and retail service. if i was to summit up in one phrase the city asks us to provide them retail level of service at wholesale prices. that is primarily the essence of the dispute. now what entity wouldn't want retail service and all of the things that come about that at wholesale prices? there isn't a whole lot of difference in what actually is

provided in the cost of how were or what it costs us to provide power at the retail for the secondary or primary level. what happens with customers that receive wholesale service from san francisco they avoid most of the public purpose program charges. they are able to avoid the costs of low income programs,ho income free home weatherization, energy, battery, solar support. the very values to me are why i live in the city. very much san francisco values that we would want to support. taking the wholesale service we receive a lower cost service and we are able to have that difference and unfortunately not avoid a number of programs are ones the city would strongly

support. we respect the right to provide service. [please stand by] stand by.

-- to allow folks that would like retail-like service to take retail service, and those that would like to have a wholesale customer experience to continue in doing so. i have a number of things that i think that were not accurately characterized from the first hearing. i think that i would just say that the decision against ferk last week primarily was an admonition to a regulatory body from a court that has passed several of these in the past and said that the administrative agency has failed to provide strong enough written decisions in favor of its opinions and it

was merely a remand to that regulatory body to strengthen their own decision-making process. it did not find or reverse any of the precedents that ferk has ruled in favor of pg&e and it merely said that you must provide more evidence in your written filings. this is something that particular court has done to ferk on many occasions recently and has expressed its frustration with that particular agency. so it actually doesn't express any opinions pg&e or the matters at issue. we will continue to discuss these. my strong preference to find a settlement. we have tried hard in the past to settle these issues. the last time we almost had a bargain was in 2015. with previous administrations. it was very challenging for pg&e to reach an agreement with the city. the city family doesn't always

agree with itself, and we end up negotiating with each members of the family separately. so what we would ask of the city is in order for us to resolve these issues, to come together, and to bring us one voice that can help us to have that discussion and we can work through these matters. so we look forward to answering any of your specific questions and thank you again for having us. and i do want to say that anybody that's interested in coming to the thursday sessions and seeing how we sit down and roll up our sleeves and work through the projects, we would welcome anyone's presence in this meeting or any other member of the public, frankly that, wants to sit in and to go through -- you know, the challenging task of making sure we're aligned and getting projects moving forward. >> thank you. i have a number of questions. i will say that it is true that different members of the city family often disagree, but i

think that when it comes to pg e and the level of really below-the-belt actions, you brought this city together more than it's ever been brought together before. and we -- we speak with one voice when we say what you are doing -- your actions to delay these projects is unconscionable. it's not okay. and it is extremely consistent with your behavior that have perhaps now -- you're going on your third criminal indictment for the way that you treat your customers. so i'll just start with that. first question to you -- first let me make a comment and then a question. the way that you characterize the d.c. federal court's decision is inaccurate, because

pg&e intervened in the case. joshua levenberg was there arguing on pg&e's behalf, presenting any evidence that you have that requiring primary loads for projects that require a relatively low amount of energy have nothing to do with safety. so you couldn't convince the d.c. court that there were any safety justifications for requiring that 720-square-foot box on every third street. you live here, mr. johnson. do you want to see one of those boxes on every third street taking up parking spaces in your city? do you want that -- that 720-square-foot box in your child's classroom? ironically, i tried to get air purifiers that are about this big in every classroom in san

francisco. and i was told -- and i tried to get those because of pg&e wildfires that you have started and the air quality that our children are breathing. and the teachers didn't have enough room to store them in the classroom. but you want to put -- equivalent of one-bedroom apartment on school campuses to require safety upgrades? that's the opposite of safety. tell me the detailed safety reason why you need primary equipment to power small projects in san francisco? >> so let me speak first to the unmetered load because i don't think that was characterized. >> first answer my question. why is a 720 primary load box --

720-square-foot box required for every approximately three street lights in san francisco, when we never had any safety or reliability problems with them in the hundreds of years that we have been operating them. what is the safety problem there? >> there is no requirement to do that. that's the characterization of our filing in that requirement. we've never said anything to that effect. >> so you're not requiring primary equipment for every -- for the 25,000 city-owned street lights and -- we require metering of those and if they need wholesale power, they need that equipment. we provide a retail service to meet their needs. there is no unmetered load at wholesale level. again, this is the issue of wholesale versus retail

offerings. every other municipality that takes street light service from us, from unmetered load, does that as a retail service. that is not a wholesale service if you would like to be a wholesale provider and be a utility, with that comes obligations and responsibilities. so it's -- >> so, in other words, you are saying -- >> the desire is to provide to get wholesale prices for retail services. >> so -- because of the act, and because san francisco has a special set-up established by congress in 1914, we are an independent utility that under pg&e's own contract received wholesale prices. so you're saying to us under this new filing with ferk, you are saying to us that we are going to hold you hostage if for

the first time in hundreds of years, you do not install this on every street in san francisco, we are going to increase your prices through the roof. you don't call that anything less than hostage holding? you know that san francisco -- you live here. and you know that we do not the space to safely put a 720-square-foot box every three blocks in san francisco, so you are forcing san francisco, contrary to the agreements that we had and contrary to a legacy from the raker act from 1914, you are saying that if you don't like the way that we do this, then we're going to require to you do something that is dangerous -- dangerous for your

residents. >> so there's nothing unique about the raker act that provides wholesale service. it is provided to any entity, city or private that, wants it. and many take advantage. primarily we see water agencies that have large pumping load that choose to install their own generation on their side of the meter. and all of those entities have switch equipment and -- and participate as a wholesale entity in that market. so there's nothing unique about the service. we offer it the same and what we are trying to do in this filing is to make sure that those rules are 100% clear to all and that everyone can plan accordingly and then choose the option that best meets their service need. if it's a retail from pg&e, so be it. if it's wholesale from the city, so be it. it's very important to remember that the sale of electrons is

not the way that pg&e makes money as an entity. at the end of the day if we sell less or more electricity, that is chewed up annually by the state. and so, you know, from our perspective, it's the city's opportunity to choose whatever makes the most sense for its customers. >> supervisor ronen: mr. johnson, a couple things. number one, you are arguing that this is a safety matter, not me you argued before ferk and before the d.c. courts that the reason that you're acquiring this equipment -- requiring this equipment of san francisco is of safety. and now you're saying it's not safety. it's that you're mad that we pay a wholesale instead of a retail rate and pg&e in typical fashion wants to earn an extra buck off the back of californians. compromising safety, fairness and rationality of what's

required to -- to power public amenities that serve the people of your city. so i once again want to ask you the question -- i don't want to argue about the wholesale and retail price. you said in your documents to ferk and to the d.c. circuit when you intervened in the lawsuit that the reason that you require primary equipment is because of safety reasons. explain to me those safety reasons, because you didn't do it sufficiently to the court and we need to hear those reasons. >> so i'll quibble with one characterization there and then i'll get into the safety issue. the d.c. court took issue with ferk's explanation of our safety issues, not with our -- >> i don't want to -- we could go back and forth all day. i just want an answer.

>> not the utility. >> what are the safety issues? >> let me give you an example. so coming home from an event in december on the east bay, i was exploring some of our facilities out with our crews, we had an outage down at mission and spear. so i'm coming off the bay bringe and i come down and i was in the holding to go to a job site. so we go down there and the men and women of pg&e, there are about three crew there is, they have to climb into that manhole and deal with infrastructure that's over a hundred years old down there and make sure that's safe for them to work on and fix. we had matrix event coming up at the water bar there that was raised to us by various public officials.

in a few nights, you know, i thought about the downtown core and the ferry building and how that area has been devastated by the pandemic. but i have to ask men and women in these shirts to go down in that hole and make sure that they can fix that equipment. and that everything is turned off and switched appropriately. so we will take a complex network and we'll go to a central control facility that's located in concord and an operator there has a map of the system. a digital map. and they will move switches and they will try and find the smallest way to isolate where the problem appears to be, and they will -- they will narrow that down so we can affect the fewest customers. we can get some back right away and we isolate where those issues are. and they are sure that we have that isolated and that wires no longer live when those folks climb in there and start working on it to repair that equipment. when we have the equivalent of

jumper cables attached to our lines all over the system on the secondary level, or where major customers who may be taking activity on their own system have no intervening equipment that allows us to isolate customers that we do not have contact with -- they are not pg&e customers when they take wholesale service. they are customers of the city and we don't know what equipment they might have behind that equipment. >> i don't think that you're answering my question. we're not talking about -- >> you need a point of operation and safety in order for us to work on the system and that is what this is about. to switch gear to isolate equipment when you're working on that system to make sure that the public isn't affected by that and that the men and women that work on that equipment witn do so safely. >> mr. johnson, we are talking about apples and oranges right here. >> no one in the united

states -- no one else has these types of arrangements that we have in san francisco. and we're trying to -- >> can you please stop and answer a question. thank you. mr. johnson, i'm sorry that you haven't maintained -- thank you i am sorry that you haven't maintained your equipment to standards that you feel is safe for your employees to go in there and to make repairs when there are problems. that's par for the course with your company and it's the reason that you have faced bankruptcy and it's the reason that we've had -- you have caused more environmental destruction in this state than perhaps any other single event. the question that i have for you is in new projects, not old projects with 100-year-old pg&e equipment, in new projects that are creating essential amenities to protect the environment, something that we actually put money and infrastructure into doing here in san francisco to

make our schools safer, to make our streets safer, and to have the only trauma one hospital in the region, and to have open space during a pandemic for our children, elders and families to play. those are new projects. you are requiring an amount of equipment that you do not require anywhere else. you don't require it for yourself. you don't require it for any other municipalities. you don't require it for any other customers. you require it only for san francisco-based projects and you have not given us a single -- you have not given ferk, you have not given the d.c. court, and you have not given the city and the county of san francisco a single coherent safety reason for requiring that expensive and burdensome equipment that have delayed the implementation of

projects that have literally saved people's lives. and you do it over and over and over again. it went from bad to worse. it's getting progressively worse. supposedly patty poppy, the new c.e.o. of pg&e is all about safety. well, please give this message to ms. poppy. you are making dangerous situation after dangerous situation in this city and county of san francisco, because you're mad that we have a wholesale rate that is historic and that has allowed us to provide the safety and the -- the safest, and the cleanest and the most reliable energy. one more time i will ask you, can you give me one coherent safety reason why primary equipment is required for these 68 san francisco projects that require an incredible low amount of electricity?

i'm still waiting. don't obfiscate. i don't want to hear about existing projects and, you know, your brave electricians going down and fixing your very old infrastructure. that is complete obfuscation and it is not answering my question answer my question, please. so whether the system is brand new or whether the system is in the older parts of the city where the networks is, the answer is the same. to operate the system safely we need clear zones of demarcation and we need to understand what is actually on that system in order for it to operate safely and for people to respond to that system safely. and there is no other utilities that provide these services. we have a long track record in san francisco of those

facilities. these change tariffs and these changed systems are ways for us to move forward with a safer system for everyone going forward. and we are going to have to make that transition at some point. and in order to improve safety in the city and improve this company's safety track record we need to draw that line. >> you know, i don't -- i honestly as a san francisco resident, father, i hope that you can look your neighbors and your family's friends in the face and tell them why they can't use their park, or why their friends don't have affordable housing. or why our city can't go electrical and help the environment. two more questions for you before i turn it over to my colleague. i understand that you just tried to play this game because what it is is a game and it's a very dangerous one with ucff. and the new research facility.

because they are ucff, and perhaps because they have the governor's ear in a unique way, a governor and a legislature that you've had to turn to time and time again for a bailout, you have finally reached an agreement with them. ucff was at the point of losing our trauma-one center status if this project didn't get energized, if their research facility didn't get energized in time. but luckily you said that you were going to work it out. now, unfortunately, ucff hasn't had the level of experience with pg&e that the city and county of san francisco has had, so i worry that you will not keep your promise. can we have your assurance today on the record that pg&e will follow through and perform any necessary electrification work based on the terms of settlement that you agreed to with ucff to get that project energized in time for them to save their trauma one status?

>> we will get into details of that, but we are happy to sit down with ucff or the s.f.puc and hash out details to meet -- to meet any particular deadlines. we have every intent -- >> you already did. you reached an agreement with them. >> we have made -- i do not have an encyclopedic knowledge of any project in the city, there are hundreds, and i can't commit to specific timelines and actions in those projects but i will make every good-faith effort to sit down immediately after this and we will attend to that item at our thursday meeting this week and make sure that we are aligned across the city after

pg&e on the status of that project. and i will be happy to do that. >> well, all right, we'll be sure to sit down with the c.e.o. of the hospital and the chancellor to let them know that you would not go on the record agreeing to maintaining the terms of that agreement publicly and making sure that our only trauma one hospital in the city remains open and available to deal with any emergency -- emergencies that come their way last question -- >> so i will -- i will make a commitment -- >> your new role as regional v.p.? >> so i just want to add to the hospital thing -- the hospitals are a very high priority for me i spent the last couple of years ensuring that the 35 hospitals that pg&e serve in the high fire threat area, have individual plans for each one of them to be exempt from the power shutoff program. so hospitals are always, especially in this time, our highest priority and they will

continue to be and we'll do everything to that project to the best of our effort to meet that equipment. i just need to look at the details with both the hospital and the team before i can go on record and support that -- i have a colleague, my colleague darren may want to add a few words on that project much. >> . >> i'm sorry. supervisor roben -- >> mr. cline, can you answer -- will you give a public declaration that in order to make sure that ucfs maintains general hospital trauma one designation that you will meet the terms of the agreement that you made to electrify their research facility on time as requested? >> yes, and i believe that -- yes, we will. it is not technically an agreement. it is a contract that goes through the system.

so i believe that mr. johnson got a little, you know, when you talk about an agreement, there were a lot of different things and a lot of different issues at ucfs as you are building new things. so it's just in some of the definitional terms, so, yes, we are going to meet the terms of the contract. we have a contract with ucsf and we will perform the duties that we are obligated to perform. >> okay, mr. cline. thank you. your title? >> i'm a manager of local government relations for the bay area for pg&e. >> okay, thank you. and then, mr. johnson, my last question before i turn it over to my colleague anne peskin. how long have you been the regional vice president? >> since june of last year. >> and during that time have you sat down with any sfpuc staff, any personally -- any staff from

any of the departments or anybody from the city and county of san francisco to discuss any of the 68 projects that are currently delayed because of your unreasonable and unconscionable requirements? >> i get regular updates from the teams that meet with those projects and i'm generally aware of the issues that we are working through and we have been on numerous job sites but we haven't done a systematic review of the projects. >> i suggest that you do that and then you look your children and your neighbors in the eye and say what you're doing is okay. mr. peskin? >> thank you, supervisor ronen. mr. johnson, i'm inclined to like it because we share our first same names. but with that, i thought that i'd change the subject to something entirely different which is not the world of

wholesale and retail and hostage taking and 68 projects, but something really simple. which is the lights -- pg&e lights and not sfpuc lights have been out for the better part of the year. can you tell me when pg&e can get my lights back on? >> so we -- supervisor, i am familiar with that project. we have a very old type of lighting equipment that exists throughout the bay area. some cities own the same equipment. and it's street light technology. there are only a handful of individuals that handmake the replacement equipment for that. we are expediting in the next two years the replacement of all of that equipment on our system i put my foot down internally and it's time for it to go. and we need to take that out. and it's very hard to get parts for replacement of that. and so we are see wag it takes to energy a project and change out that technology.

that will be a fairly disruptive technology on columbus that will require some major trenching. so we are working that in conjunction with the city right now with the intention of hopefully we can mutually cooperate and find out a way to do that is as little disruptive as possible and really get that fixed. because it's not a sustainable thing and that's a public safety issue from my perspective. >> thank you. and then not to make a gratuitous comment, but i do believe that there are two entities that have actually gotten the very complicated city with all of its entities -- the mayor, the board of supervisors, various departments on the same page. and that would be -- and we speak now with one voice through both of those entitys and that would be the company that you work for and a company called recology, and to the extent that things are complicated with historical patterns of electrical ownership within the

city and county of san francisc)

we have half the street lights out for a long time and the city is dealing with public safety issues and dark commercial corridors are not helpful. mr. johnson, can you commit to putting your foot to tell me why we still have no lights there and also, putting your foot down was the expression you used in making sure we get those restored and we're trying to just get that out of the system and i assume recognize that the provision of street light service is also very complex here in san francisco with the mix of city owned street lights

and pg&e street lights so we did do, a number of years ago, an inventory so we now have that well-marked and demarcated with the sfuc and the street lights they have responsibility for. not specifically familiar with those and i'll have -- we'll follow-up with your office and we'll get back to you on the status of those. >> thank you. some issues are complex and sometimes they're sim pleasure than they seem and i want to say in looking into this and adhering the back and fourth on this and there are a lot of complexities and there are also at the end of the day and we're talking about retail pricing or wholesale pricing and i think a form of i would say negotiation around that issue that is depriving some critical services in our city of the power they need so i won't retrade the

ground and thank you for going over this in detail and i will y this, the proud democratic socialist on this board and there are moments when the failure of the private sector and the absolute needs for the. >> my colleague supervisor preston knows i'm not a democratic socialist and we agree and i think in terms of public utilities being a public good and healthcare and childcare and we are on the same

page of that. i will ask mr. johnson if there is an e-mail address that we can follow-up on because i actually have several streets and directing 7 that are in that category and it's a little bit harder because we have all the of the right of ways and alley ways behind houses that are not so much but they do pose a significant safety issue and we have seen, in during the pandemic, and if we can follow-up with a list, i would appreciate it and i understand that we're understaffed just like puc is but you know, since we are customers, wholesale or retailer i would i appreciate

you. >> thank you. and before we open the item up for public comment i wanted to give an opportunity to puc general manager, or assistant general manager for power barbra hail to make any remarks or ask any questions. >> supervisor, i don't have any questions. obviously, i would just say i appreciate this board having this hearing. we have engage in with conflicting messages and what has happened in the past. i can tell you, sir, with respect to things going forward, as far as the puc is concerned,

the person who and the person in this agency who is going to make a decision that get run by the mayor's office and the board, is me and i have a longstanding commitment to making sure and working in collaboration with this board so ensure we get reliable, safe public power here in san francisco and that we work together to make sure that rate payers and our residents are fairly treated and supervisors, you can make sure that that longstanding commitment that i've had working with you from my prior work is steadfast and will remain one of my stop priorities in this new information and i will keep you informed as to the progress that we make in our on going conversations with pg&e. >> thank you general manager her

herrera. >> there's one issue i want to be clear on the record and thank you for the additional time. mr. johnson referred to san francisco's paying a wholesale rate and avoiding certain contributing to middle income programs and the like and i wanted to make it clear that san franciscos through the hetch hetchy programs through our rate payer programs not avoiding those obligations at all rather embracing them with the programs we offer and the discounts we provide to our low income residential customers but i wanted to make sure it didn't hangout there. there's a lot of other things we can talk about but i'm sitting down with mr. johnson and having a opportunity to do those

through. >> i do want to thank you mr. johnson for coming here and presenting and being willing to answer questions that has not always been the case with pg&e in the past. so hopefully with your new leadership, at the company, you can be more engage in these projects because the truth of the matter is pg and he's bee hiv year is causing real harm to real people and these are not abstract issues. projects are being delayed months and months at a time and the estimated cost of san franciscans is $19 million when we stopped a worldwide pandemic and needed every dollar to do so and we needed every bit of outdoor space to give people mental health reprieve and we needed every affordable housing unit so people can get off the

streets and into safe housing. we need our hospital to work and functioning. we needed our public transportation system more than ever. you just survived this pandemic with us. it's not true we need primary equipment for these projects. you know that and i know that. it's a way for pg&e to squeak extra dollars out of the city and county of san francisco for its own profits and it is not ok. san francisco spends $20 million a year providing reenumeration for the service that you provide and to us and we are happy to

take it off your hands if you don't want to offer that wholesale rate to us. there are 2,000 projects that have secondary service that's have run safely for decades in the city. you know that this is not a matter of safety. and so trying to hide behind that and pretend it is is disingenuous at best and dangerous at worst. we expect better. the one last question i had for our city staff is, i was looking into mr. johnson's background and i understand you come to pg&e from the california public utilities commission and we've been talking about ferc and having to gain some accountability for this corporation through this federal appointed body but i'm just wondering if the california public utilities commission,

where we have a lot more direct relationship through the governor where we can do some advocacy there can intervene and require that the company acts in a more up right manner with the city and county of san francisco. mr. gur era, can you answer that question? >> yes. >> we are in front of the cupc in terms of making our request for the evaluation study in terms of the value. so they're differing involvement but each has its own respective -- it's own respective areas. i will say and i don't know this

off the top of my lead with the unmetered load issue, if ferc made a decision, if they were to go along with pg&e and there's action that would be needed by them cpuc and the involvement is related but in a different way. like i said, the evaluation valn study. >> madam chair, if i can turn it over to you to open this item up for public comment. >> thank you, supervisor ronen. madam clerk, if there's no other questions or comments from my colleagues, let's please take public comment now. >> thank you, madam chair. we are checking to see if there are any callers in the queue.

please press star 3 to be added to the queue. wait until the system indicates that you have been unmuted and you may begin your comments. we have seven listeners with three in the queue. if you unmute the first caller, please. >> good afternoon, supervisors. my name is garcia and i sit on the sfpuc citizen advisory committee representative directing 9 and i am a chair of the purchase submit' since late 2019 and elected chair of the cac last month. thank you supervisor ronen for sponsoring this hearing and the board of supervisors for reaffirming the 2018 resolution last year to continue to report issues that highlight pg&e deplorable behavior and do real harm to san francisco and the residents. to continue and grow interaction issues our primary reason why

the sfpuc passed a resolution supporting. the take over of pg&e transmission and distribution assets. i continually rewind the cac it took 70 years to end the spring valley water monopoly of the local water system and hearing highlights why we can't wait decades to end the anti competitive business practices even with the recent dc circuit ruling and if which want critical and essential services while trying to address climate changes issues and thank you power aging agm and barbra hail and deputy agm for your consistent and with me and lastly thank you chair mill gar and other members of the committee for your sfpuc c.a.a.

appointments who hit on the power subcommittee. thank you. >> thank you so much for your comments. next speaker. >> yes, hi, this is chris tanevance and i'm calling today on behalf of the haiti ashbury association so supervisor preston has referenced the project that i was concerned about. we had construction that took place along the haight-ashbury corridor from 2016 until 2021 as the work was completed in early 2021 and we still have half of our street lights are unpowered. the contractor has completed their work and the polls are installed yet the north side of the street and the south side of the street is one block is not powered at all and these are

pedestrians scale street lights that have very low amount of power to them and they're environmentally the latest technology and i will they cost about two and a half million dollars and to power them requires maybe just hundreds annually or a few thousand but i was told the reason we did not have the power on in those street lights is because pg&e was requiring equipment that would total about half a million dollars additional cost to the project and so obviously, i'm hearing what supervisor ronen and others are saying about pg and a primary equipment for secondary youth and i really appreciate this hearing of transparency so why it's now more than a year that we've had

the project completed the polls and called and they're still unpowered. thank you so much. >> thank you so much for your comments. next speaker, please. >> supervisors, that being to your attention that pg&e was created when this city stopped 30 miles south and pg&e was created to bring in the lines. the public housing in past got free electricity and so did san francisco the military. and the municipality. we have to sit down with pg&e and ask them how much money are they making from our public housing? how much money are they

garnering from the presidio in san francisco. how much money are they garnering from the municipal city hall and the using pg&e. we have to have tough negotiations. do you know who pg&e has on the outside. willie brown? do you know what willie brown likes, money. we need to sit down with pg&e and make a check list of why they're bullying us. they are bullying us because you know, we don't know our own history and because with people like willie brown. he has a finger in every pie. a dirty finger in every pie. the corruption in this city has reached saturation points and

the general manager from the spfuc knows about this but he is talking in generalities. the supervisors are talking in generallal tease. they do not know the history. >> let's take the next speak. if you want to speak on item number 3, press star 3. >> hi, my name is wendy williams and i'm a small business owner in district 4. i'm hoping a new bakery at 3928 irvin street and purchase an electricity oven as opposed to a gas one because of that decision, i need an electrical upgrade. i've been communicating with pg&e in last february and my contractor has been trying to coordinate with them about the equipment her electrician needs

to order for the project which has a two-month lead time and will cost me $30,000. which is a lot for a small business and that's just for the equipment. so, as we say now the construction of the business could be i will wait on pg and he to upgrade the electrical. i hope this isn't a case and i appreciate the sf supervisors holding pg&e accountable. thank you. >> thank you for your testimony. next speaker, this is the call last caller in the queue. >> good afternoon, supervisors, today i'm calling for the city to in its desire to embrace city-owned clean affordable power and embrace nuclear power. clean offshore nuclear power is the renewable source we need in

our city and have needed in our city for a very long time. we can see in europe, where they've embraced nuclear power in france and have 100% renewable. where germany has chosen not to do so. they can't even manage to stay warm. they need russian gas. were they to lose their lives what i have to tell you, is that it's not just the germans, it's not just the french that are depending on nuclear power to stay warm, we all are. it's the majority of heat that feeds the earth. our earth core has a nuclear react are running in at all times. it keeps us run and it's most of our heat not the sun that most people would imagine. so we're looking for a clean source of power to run our civilization, one that already does. one that is safe to operate.

one that's been proven so. we should look to what we can build here. china is building dozens of nuclear reactors all over there country. and we have the option to build a micro nuclear react or here. [please stand by]

>> it is well-known for its high cost and short supply. and the negative impact that

that causes on health and the economy, and the climate, and there are a large number of vacant units in san francisco, so the housing inventory is affected by that and as a supervisor preston mentioned, 10% of our housing inventory is vacant. that does not help our supply situation. this chart shows housing production from the period of 2015 through 2020, and we have added the goals that we were set for having by the regional housing needs allocation, which is a state imposed set of goals that covers an eight-year window, and what you can see here is that from the period of

between 2015 and 2020, we have produced a total of 23,672 housing units. the goal for that eight-year period is 28,000. so there has been an uptick in production and the numbers that have improved. some getting towards the goal or going short of the goal, but what you see here is the distribution where we have overproduced above moderate income or market rate housing and under produced in affordable housing and finding housing for moderate level and very low income households. and the total captured in the chart are 5800 units produced of affordable housing, where as the goal was 10,617 for the eight-year window. so within this context, and during the time that the population has increased be onto the rate of production of housing, the rate of job growth

has increased beyond the rate of production of new housing. so it leads to a question of vacant units and how many vacant units are there? why are they vacant? can something be done to transition some of those housing units back to occupied housing to increase the housing stock in san francisco separate from the idea of housing production? in this chart we showed the number of units identified as fake it -- is vacant. it is the best source we have found for this information. it shows 40,458 units vacant as of 2018 in the american community survey. what is interesting as you can see the number has been growing steadily since 2013. growing from 26,400 units in 2013 to the current number, and

the rate has often increased. so six-point nine% is the housing inventory that is vacant in 2013 and that rate is now 10%. we researched five units. the census bureau provides a number of explanations. we also have explanations for other housing experts and sources and here you see a number of them. what we found is there is no single answer. there is no one policy intervention that would address the issue because of the wide variety of reasons, but it is one reason. that could be as simple as someone that has purchased the housing unit, but has not been able to move in and we are not occupying at the time that the census bureau is surveyed. another reason it is still not occupied is a buyer has purchased the property for investment purposes and doesn't intend to live in it. it could be sitting empty as a

place to park cash for some periods of time. other explanations include owners being in care facilities, perhaps for extended medical procedures that they can't be in their home during that time. foreclosures, second are under nonplanar -- primary homes indicate some of the vacancies. these are units that are used occasionally by owners who have private -- primary residences elsewhere. they can be vacant for personal or family reasons. there's many stories and many complications with the families were the owners of the units that may explain the vacancy. some of the units are used intermittently for corporate housing so they are occupied off and on through the year. some are being repaired or were -- or the owner intends to repair them and they have not been able to finance the repair as quickly as they thought so the units may sit empty until

they are able to recover the costs. some units are left empty to avoid rent control regulations. the owners may want to sell the unit and want to sell it for a higher price without having tenants in it. other uses are for nonresidential porpoises which is storing residential supplies or equipment or in some cases, the owners plan to demolish the unit in the future and they are waiting to do that. in this chart we show the distribution of vacant units as of 2019. these are groups that this citizen's bureau defiance and they classify the units into these various categories, what you see here is the largest group at the bottom row is other vacancies. this is the route back of explanations that include corporate housing, they include personal family reasons, they include units under repair, they

include those that are subject to legal proceedings, and it is a variety of things. recreational and occasional use is the second largest grouping. it is 8,565 units and those are, as i mentioned, units that are used part-time or occasionally by owners that have primary residences elsewhere. it can also include timeshares and other things. and for the more expected vacancies, the top four rows are units that are for rent, units that are rented and not occupied, units for sale, and units sold and not occupied. however, i want to add that has been the fastest growing classification of vacant units in recent years. it accounts for 20% of the vacant units. and while it can include those

where the situation is simply logistical, it can also include units that aren't occupied. they are investments or temporary payments for cash. in terms of where are the vacancies and where are the housing units being constructed, it is shown in the maps. the panel on the left is showing the residential vacancy rate, concentration in the northeast quadrant of the facility and the concentration in the dark blue shaded areas which is largely downtown, the financial district, south of market, and on market street you can see. there are vacancies throughout the city. a concentration in the southeast in 2019. and all neighborhoods have vacancies to some extent. in terms of new housing units, this overlaps with the concentration in the downtown

and south of market areas. a lot of construction between 2015 and 2020 has also been downtown, south of market, and on into the waterfront area. on that note, i want to point out that half of the new units added during that period are in those districts. about 11,589 in just those three neighborhoods south of market, downtown, and the financial district. we have looked elsewhere to see what some other cities are doing. we found some interesting examples in the limited numbers of cities and i will briefly describe them. a flat vacancy tax was imposed in oakland starting in 2018. it ranges between $3,006,000 and is for vacant properties, but also vacant lots and the actual

taxes charged depends on the nature of the property. the city has collected and reported $7.3 million a year. we did get information that was readily available for the number of units tween properties to parcel to that tax. variable taxes are in place in washington, d.c. and in vancouver, british columbia. these are based on the property value of the vacant unit and in washington, d.c., the charges are $5 for every $100,000 for vacant units and $10 for every $100 of blighted units. the tax in that city covers vacant and blighted units. in vancouver, british columbia the vacancy tax is 1.25% which

is the assessed value of the tax of the units that is vacant. and in vancouver, owners are required to report every year whether or not there units are vacant. and in washington and oakland, it is perhaps not as effective because they are self-reported or reported by city employees when they observed vacancies. there isn't a systematic way of capturing all of the units in either of those cities. vancouver, b.c., by the way has produced a report showing the results of their tax. what it showed is a drop of about 25.4% in the number of units reported vacant after two years after the tax was

imposed. the members -- the numbers have gone down since then, which we conclude is a demonstration of the effectiveness of the tax. there are fewer vacant views now because the tax is being imposed. the 25-point for reduction translates to 1,896 units now occupied that were vacant when the tax was first put into place. barcelona has the most stringent system that we found in our research. they have the ability to take temporary possession of units that are vacant for two years or more, and provide them as affordable housing for -- for a four-year period after which they are returned to the owners, or they can actually sell the units at 50% of market value so they can be used for affordable housing. they have actually done that for

about 140 -- hundred 90 units in the last couple of years or the city took possession and sold them and they are now in the affordable housing stock. they had been vacant for two or more years. we also just presented an option combining the tax and incentive options, and we wanted to present that to the board of supervisors so while their mate -- might be a reason to attach because of the negative impacts and the social cost of the vacant units, if that generates funds that has been found in these other cities, that maybe funds that can be used for the city or community-based organizations to purchase property and make them available for affordable housing. we did prepare some estimates here of what the city might generate if it is imposed and we provided a few scenarios based

on the models being used it is a very different approach. on the low end we use these in place in oakland there are a number of units in san francisco that could well be subject to the tax. this is assuming that san francisco would allow for exemptions. it is true in all of the three cities where we have examined the tax structure. they allow for exemptions in cases where the owner may he waiting on permits to do repairs or may have to leave their residents for long-term medical care elsewhere or other circumstances. they all allow a number of exemptions. we are not talking about applying the tax to all 40,000 vacant units, but based on the experience of vancouver, they

applied their tax to 1.1% of their housing stock based upon, after exemptions that were accounted for. so that gets us to the $13.8 million in the vacancy tax that could be raised by the city. when you subtract that operating cost for administering the task -- the tax, that would be about 11% based on the experience in oakland and that tax would be 12-point to at the low-end. we also applied the higher tax system in place in vancouver, b.c. that resulted in annual taxes of about $61.2 million. and then the midrange -- the higher tax is oakland.

we provided some policy options for the board of supervisors to consider. one is that for collecting information on vacant units, how many they -- there are, why they are vacant, the timing is very opportune because the housing registry will be up and running later this year, and that is a focus on rental housing, which could be expanded to include owner occupied as well and to collect information on all vacant units as part of the registry process that property owners will be going through when that is operational. that is something for the board to consider. we recommend the board consider advice from the city attorney on all legal options. we shied away from anything having to do with property tax and the increase that would require adding something to the current property tax, which more or less the city can't do. voter approval would still be

recorded for a flat tax and obviously you will want to get advice for the city attorney on steps if that is the direction that the board chooses to go. and finally, considering establishing a residential vacancy tax. it has been shown effective in vancouver where we have the best numbers, but even in the other cities of washington and oakland and even in barcelona, where there are caught of viable units that have been turned down to affordable housing because of their policy interventions. and then finally, the secondary point here for the new revenues on how they would be spent for the housing affordability policy goals to address root causes of housing shortages and for the city and staff to collect and report data on baseline vacancy and reasons and types to better understand what the census data provides and why these are

vacant and how policy interventions can be fined tuned to address those concerns. that is the summary of the report. we have a lot more information in it and you all should have a copy of that at this time. we are happy to respond to any questions or comments. thank you. >> thank you so much. thank you for the report and for the recommended colleagues and to the public for those interested in the housing policy. it is 49 pages of excellent research and i appreciate all your work on it. i did have a couple of follow-up questions. and you touched on this. i was just wondering if you could -- just looking for a minute at the breakdown that you talked about of the different

senses reasons of why units are vacant, i was wondering if you could express which type of vacancies we would expect to be most susceptible to the policy interventions, particularly the vacancy tax, what you looked at in other jurisdictions. i think we have certain types of vacancies and we want to know what the tax is. it will stay vacant. there are others were at least the vancouver experience really showed that it can influence behavior. i'm wondering if you can elaborate on which of the categories we should be looking to to expect the most active -- activation of seeing if there was some kind of disincentive to vacancies on the books. >> i can address that, supervisor preston. the categories that are for rent, for sale and rent is not occupied are probably most likely what we would classify as

normal turnover. that accounts for 35% of the units. the soul is not occupied and it is a mixture. those also could be part of normal turnover, but they can also include the investment properties that you mentioned and those that the owner may not ever intend to actually occupy. that would be somewhere in the middle. it is part of the grouping of 8,000 units, but then there is about 50%, about half of the units that fall into seasonal, recreational, or occasional use or other vacancies. and seasonal, recreational and occasional, you know, they depend on how you define vacancies, but in vancouver, it was units occupied less than six months of the year. if someone had a second home and

occupied in san francisco less than six months a year, that would qualify for the tax using the vancouver model. so those would be, i assume there's quite a few in that category where the use would be less than that and they would be subject to the act. it is not to say that they would necessarily want to give up their unit, it would just be a cost of ownership, but that could provide funding for affordable housing used for other purposes. and the other vacancy, which is the biggest group, 12,991 units, that has brought a wide mix of uses that would also be eligible for comparison to occupancy because they could be being held onto for a future sale, they

could be used for corporate housing, they could just have various repair needs that they are not addressing, that a tax might serve as incentive to get it taken care of or to otherwise occupy it. the short answer is there is probably about, you know, half that would be eligible of the 40,000 and could actually result in a change of status if a tax were imposed. that could be a resolution of the problem, choosing to pay the tax or getting it fixed and occupied or renting it out faster than what would be done after the task. >> thank you. that is very helpful. i think i understand the breakdown. the one i am wondering is in the list of possible vacant reasons,

there was a category that i was interested in and also where somebody maybe anticipated a future sale. we have a bunch of them in our district. there were once tenants there and now there is nobody there. and years go by and the presumption is what you are describing there is your owner wants to sell it eventually. if they sell it vacant, with that live in the other vacant? >> yes. that is a place i would most expect to find them. other vacancies. >> got it. it is not on the rental market. >> that is correct. >> it is not a normal turnover. >> thank you. i am very interested in how the vancouver tax experience is in your findings there.

and in some ways, that is some of the most developed vacancy tax. a couple of years of data for now. understanding that obviously there is an interaction between how safe the tax is and how much activation of housing is, it is a very low tax, that all of these things will pay out and you can raise some money in it. he will not motivate someone who keeps the unit vacant to suddenly rented out or sell it to another occupant or whatever and, you know, then there is the other extreme where the tax is so prohibitive that this model of keeping it vacant doesn't make sense. so they actually rent it out. if san francisco had a vacancy tax was a quarter of the magnitude, obviously we are not

free to peg it to the property value. setting aside that, you have estimates in the report about how many units you would expect roughly four that to activate in the first year for two years and i wonder if you can share those numbers from the report and any comments on that. >> we prepared our high estimate based on vancouver's approach, but we don't assume that the city would apply the effect and property tax. if the tax were set at something comparable of the valuation that

would amount to $15,000 on our median value property in san francisco. also based on vancouver, about 4,600 units would be subject to the task of all of our vacant units. that would produce taxes of $51 million per year and apply to about 4600 units assuming the same overall conditions in vancouver. again, that would not be set with the property tax. that would be if the city chose to impose the tax that would

average around $15,000 per unit. >> so 4600 units is what we expect to be activated to go from vacant to rented over the two-year period. >> correct. >> but the 61 million that you were saying, that was an estimate of an annual tax of those who persisted in keeping the unit vacant but paid the tax. >> right. >> got it. [please standby for captioner switch]

>> i am so happy. african-americans in the military from the revolutionary war to the present, even though they have not had the basic civil rights in america. they don't know their history. in the military the most sacrifice as anyone in this country to be willing to lay down your blood and fight. i believe that all african-americans have served because they love this country and the hope that the citizens.

>> first of all, thank you for coming to celebrate this incredible milestone. i am really excited that she accepted. because i know what you often times may see is the fights between kim and i. what you don't know is about the friendship and the amount of love and respect i truly have for her and her work ethic from the moment i met her actively engaged in labor in a way that brought the conversation to a different level around women and

minorities and their role in leadership and labor. it is good to see more women step up and in fact, it is 125 year history not one woman has ever led the san francisco labor council and kim is doing that, which is absolutely extraordinary. [applause] and you are the first executive director of the labor council to serve on this work force investment board because i didn't want to appoint the others. just kidding. but in fact, you know, this is so important. when i think about growing up in the western addition and the fights that we used to have to be included in the placements and job opportunities that exist in the city, i feel like we have come a long way but we still

have a long way to go to make the real connections between people in many of the communities that many of you represent but himself the same people who want these opportunities, the new jobs that come to san francisco. not just the work related to construction and engineering but as you know there are even shortage of nurses. the work you have done with nuhw was extraordinary onever the years. how that played a role to make sure there is a real connection between people and the opportunities, through organized labor to make sure they get their fair share, the appropriate pay and benefits and the ability to take care of themselves and their families. you have been doing this work for a really long time. i know that you are going to bring a really strong voice to this body. in the process you are going to make a lot of folks upset what it is you have to say, but i wouldn't have wanted it any

other way because some things need to be upset. some things need challenged. in fact, i am not afraid of a challenge and not afraid of the conversations that need to be had to get to a better place that is what we want. we want a better place so people have better lives. you have dedicated your lives to public service. organized labor but public service because of the people that you know you represent. the people that you know are counting on autophytes for them and make the right decisions that are going to have an impact onnary families and livelihood. regardless of disagreements at the end of the day the underlying message i know that is most important to much of you and i know is important to kill is the fact that we want to fight for better lives for the people we represent.

that is why you are going to be serving on this board, and i appreciate and honor that you accepted this opportunity. i am looking forward to seeing something change for the better for workers throughout san francisco. with that let's debt you sworn in. (applause). >> i will put on my mask. covid is running rampant and we are close to each other. place raise your right hand and repeat. i say your name do solemnly swear that i will support and defend the constitution of the united states and the constitution of the state of california against all enemies foreign and domestic that i bear

true faith and allegiance to the same. that i take this obligation freely without any mental reservation or purpose of evasion and that i will well and faithfully discharge the duties upon which i am about to enter and during such time as i serve as a member of the work force investment san francisco board for the city and county of san francisco. congratulations. [applause] >> here is a little city seal pen with my signature. i give this to all people i

swear in to serve. ladies and gentlemen, the latest person for the board tackling work force in san francisco and making real change. [applause] >> thank you, mayor breed, for taking time-out of your schedule to do this. thank you to the leaders of labor here today, especially my board members, susan, mike, charlie, debra, and my good friend karen. i want to thank you for taking time for the swearing in. it means a lot to me because i have always been really challenged by the fact there rvs

and have notes in the work force, and i really want to fight overcoming making sure that everyone becomes a very. everyone has an opportunity to get a job and a wealthy job and to join a union if they so choose. that is my mantra since i was little. it is my mantra to this day. i will fight to make sure. that is what the labor council is about making sure there are opportunities for people and career ladders. that has always been what i have been about. i want to make sure that happens. we have seen companies take advantage of people especially during strikes when they go into poor neighborhoods to try to recruit scabs. we knead to emphasize recruiting people to getting into them into

construction and janitors and construction trades and up the ladder and nursing, healthcare. these are all opportunities they should all have. we want to make sure that the san franciscans that we all know and love have that opportunity and that is my goal for this. i really intend to implement a labor caucus to make sure that we are doing what we need to do to give every san franciscan the opportunity be to participate from our economic recovery from covid and overall economic recovery as we get on with opening up the city and making sure that people come to san francisco. those the obstacles before us. i hope we overcome them altogether as we move along. thank you. [applause].

>> there is a lot of unique characteristics about visitation valley. it is a unique part of the city. >> we are off in a corner of the city against the san francisco county line 101 on one side. vis station valley is still one of the last blue color neighborhoods in san francisco. a lot of working class families out here. it is unusual.

not a lot of apartment buildings. a lot of single family homes. >> great business corridor. so much traffic coming through here and stopping off to grab coffee or sandwich or pick up food before going home. >> a lot of customers are from the neighborhood. they are painters or mechanics. they are like blue color workers, a lot of them. >> the community is lovely. multi-racial and hopefully we can look out for each other. >> there is a variety of businesses on the block. you think of buffalo kitchen, chinese food, pork buns, sandwich. library, bank of america with a parking lot. the market where you can grab anything. amazing food choices, nail salons. basically everything you need is here. >> a lot of these businesses up

and down leland are family owned. people running them are family. when you come here and you have an uncle and nephew and go across the street and have the guy and his dad. lisa and her daughter in the dog parlor and pam. it is very cool. >> is small businesses make the neighborhood unique. >> new businesses coming. in mission blue, gourmet chocolate manufacturing. the corridor has changed and is continuing to change. we hope to see more businesses coming in the near future. >> this is what is needed. first, stay home. unless it is absoluteliness scary. social distancing is the most

important step right now to limit spread of virus. cancel all nonessential gather everythings. >> when the pandemic litly land avenue suffered like other corridors. a few nail salons couldn't operate. they shut down. restaurants that had to adapt to more of a take out model. they haven't totally brought back indoor seating. >> it is heartbreaking to see the businesses that have closed down and shut because of the pandemic. >> when the pandemic first hit it got really slow. we had to change our hours. we never had to close, which is a blessing. thank god. we stayed open the whole time. >> we were kind of nervous and anxious to see what was going to come next hoping we will not have to close down. >> during covid we would go outside and look on both sides

of the street. it looked like old western town. nobody on the street. no cars. >> it was a hard eight or nine months. when they opened up half the people couldn't afford a haircut. >> during that time we kept saying the coffee shop was the living room of the valley. people would come to make sure they were okay. >> we checked on each other and patronized each other. i would get a cup of coffee, shirt, they would get a haircut. >> this is a generous and kind community. people would be like i am getting the toffee for the guy behind me and some days it went on and on. it was amazing to watch. we saw a perfect picture of community. we are all in this together. >> since we began to reopen one

year later, we will emerge stronger. we will emerge better as a city because we are still here and we stand in solidarity with one another. >> when we opened up august 1st. i will not say it was all good. we are still struggling due to covid. it affected a lot of people. >> we are still in the pandemic right now. things are opening up a little bit. it is great to have space to come together. i did a three painting series of visitation valley and the businesses on leland. it felt good to drop off the paintings and hung them. >> my business is picking up. the city is opening up. we have mask requirements. i check temperatures. i ask for vaccination card and/or recent test. the older folks they want to feel safe here.

>> i feel like there is a sense of unity happening. >> what got us through the pandemic was our customers. their dogs needed groomed, we have to cut their nails so they don't over grow. >> this is only going to push us forward. i sense a spirit of community and just belief in one another. >> we are trying to see if we can help all small businesses around here. there is a cannabis club lounge next to the dog parlor to bring foot traffic. my business is not going to work if the business across the street is not getting help. >> in hit us hard. i see a bright future to get the storefronts full. >> once people come here i think they really like it. >> if you are from san francisco visit visitation valley to see how this side of the city is the same but different.

>> shop and dine in the 49 promotes local businesses and challenges residents to do their business in the 49 square files of san francisco. we help san francisco remain unique, successful and right vi. so where will you shop and dine in the 49? >> i'm one of three owners here in san francisco and we provide mostly live music entertainment and we have food, the type of food that we have a mexican food and it's not a big menu, but we did it with love. like ribeye tacos and quesadillas and fries. for latinos, it brings families together and if we can bring that family to your business,

you're gold. tonight we have russelling for e community. >> we have a ten-person limb elimination match. we have a full-size ring with barside food and drink. we ended up getting wrestling here with puoillo del mar. we're hope og get families to join us. we've done a drag queen bingo and we're trying to be a diverse kind of club, trying different things. this is a great part of town and there's a bunch of shops, a variety of stores and ethnic restaurants. there's a popular little shop that all of the kids like to hang out at. we have a great breakfast spot

call brick fast at tiffanies. some of the older businesses are refurbished and newer businesses are coming in and it's exciting. >> we even have our own brewery for fdr, ferment, drink repeat. it's in the san francisco garden district and four beautiful murals. >> it's important to shop local because it's kind of like a circle of life, if you will. we hire local people. local people spend their money at our businesses and those local people will spend their money as well. i hope people shop locally.

>> president walton: good afternoon and welcome to the february 1, 2022 regular meeting of the san francisco board of supervisors. happy black history month and happy lunar new year. madam clerk please call the roll. >> clerk: thank you mr. president. [ roll call ]