AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
DEPARTMENT Business Services AGENDA NO. 15
MEETING DATE February 8, 2022
Adopt the FY 2022-23 SFPUC Capital Budget (San Francisco Administra tive Code Section 3.3(c)) and Authorize Associated Bond Financing: Regular Calendar Manager: Charles Perl
Summary of Proposed
Commission Action:
Public Hearing to consider and possible action to adopt the FY 2022-23 Capital Budget of the San Francisco Public Utilities Commission consisting of $1,117,521,515; authorize the General Manager to seek Board of Supervisors approval for (1) de-appropriation and re- appropriation of $38,331,660 in Water Capital Projects and (2) de- appropriation and re-appropriation $41,158,347 in Wastewater Capital Projects; and authorize the General Manager to seek Board of Supervisors approval for the issuance of (1) $129,653,767 aggregate principal amount of Water Revenue Bonds and other forms of indebtedness, including commercial paper and State Revolving Fund (SRF) loans, (2) $704,198,901 aggregate principal amount of Wastewater Revenue Bonds and other forms of indebtedness, including commercial paper and SRF loans, and (3) $140,889,875 aggregate principal amount of Power Revenue Bonds and other forms of indebtedness, including commercial paper and loans, subject to the terms of Charter Sections 9.107(6) and 9.107(8).
Background &
Description:
Under San Francisco Administrative Code Section 3.3, the SFPUC must hold two budget meetings, the first regarding budget priorities , and the second to adopt a proposed budget. The second meeting must occur at least 15 days after the first meeting and before February 14.
Accordingly, on January 7, 2022 the SFPUC held a duly noticed public meeting to consider budget priorities at which members of the public provided input. Additionally, on January 7, January 14, and January 20, 2022 the SFPUC General Manager and staff presented in duly noticed public hearings the preliminary proposed FY 2022-23 Capital Budget to the Commission for the W ater Enterprise, Wastewater Enterprise, and Hetch Hetchy Water and Power including the Power Enterprise and CleanPowerSF. Copies of the Capital Budget materials from those hearings are on file with the Commission Secretary and available online at: https://sfpuc.org/about-us/boards-commissions-committees/sfpuc- commission/agendas-minutes-resolutions-log
APPROVAL:
COMMISSION
SECRETARY Donna Hood
FY 2022-23 Capital Budget Development
The development of the attached FY 2022-23 Capital Budget occurred from June through December 2021 and was directed by the Budget Steering Committee, comprised of the SFPUC executive team supported by the Capital Planning Subcommittee . The FY 2022 -23 Capital Budget is consistent with the first year of the 10- Year Capital Plan that the Commission is als o considering on February 8, 2022. The Budget Steering Committee decided to move forward with a only a single year capital budget supplemental for FY 2022-23 and postpone action on the FY 2023- 24 capital budget until next year as additional work is needed to develop that budget.
Baseline Review
As a preliminary step to the capital budget development, a baseline review of all existing project appropriations was completed for potential closeout or repurposing to new capital budget needs. This important step focused on capital project delivery and reduced to the amount of new funding requested in FY 2022-23 and more efficiently use existing project appropriations and financing resources.
The budget development and baseline review resulted in project budget re-appropriations and closeout s including $41.2M for the Wastewater Enterprise and $38.3M for the Water Enterprise. These amounts are included in the attached FY 2022-23 Capital Budget Summary and included in the Supplemental Appropriation Ordinances.
Capital Plan Quality Review
The SFPUC Infrastructure B ureau reviewed and validated the Capital Plan project submissions for a consistent and comprehensive capital planning approach across the agency comprised of individual project datasheets describing the project budget, schedule , and scope. The capital budget requests went through a separate project quality review process involving ( 1) validation of costs and schedule of all proposed projects, (2) assessment of the ability to deliver projects as scheduled including looking at historic versus planned spending and available resources, and ( 3) the assessment by each Enterprise of its ability to onboard new assets as planned. This new capital planning effort helps assure the budget requests meets each Enterprise’s long- range capital needs, reflects a sound project pri oritization process , and supports affordability by promoting efficient use of ratepayer funds.
Budgetary Control
Attached is an overview of the FY 2022-23 Capital Budget for each enterprise. The budget summary includes an “Authority,” column which contains a 5-digit code (the “Authority Code”). If this budget is adopted by the Commission, the General Manager would have authority to re - allocate project appropriations within the same Authority Code, subject to the procedures set forth in the Infrastructure Division’s Procedures Manual on Project Change Management. This procedure establishes a formal process for all SFPUC capital projects or programs to identify, track, and approve or deny Change Authorization Requests to project scope, schedule and/or budgets. However, the reallocation of project appropriations from one Authority Code to a different one would require both Commission and Board of Supervisors approval. This level of capital project budgetary control is consistent with the Board of Supervisors level of control, as determined by the FY 2022 -23 Capital budget appropriation ordinances.
Committee on Information Technology (COIT)
The Customer Service system project has been submitted to the COIT Budget and Performance System for review and approval. This project will transform the Customer Service experience at the SFPUC. It will modernize technology and enable the SFPUC to optimize business processes to align with current and future Customer Service needs and bring increased operational effectiveness.
FY 2022-23 Capital Budget Approval
This Resolution approves the proposed SFPUC Capital Budget of $1,117,521,515 for FY 202 2-23 as presented at the budget hearings on January 7, January 14, and January 20, 2022, and as shown on Attachment A.
It also authorizes the General Manager to submit capital project supplemental appropriation ordinances and associated bond authorization ordinances to the Mayor and Board of Supervisors. These ordinances are also scheduled to be presented to the City’s Capital Planning Committee in March 2022 and the Board of Supervisors in May 2022.
Authorize: Adoption of FY 2022-23 Capital Budget and Authorize Associated Bond Financing Commission Meeting Date: February 8, 2022
Result of
Inaction
Delay the SFPUC Capital Budget submittal to the Controller and Mayor’s Office.
Budget &
Financing Costs:
The SFPUC FY 2022 -23 capital budget and associated financing costs are as follows:
FY 2022-23 Capital Budget Amount Financing Costs Total Wastewater Enterprise $ 687,374,066 $ 105,629,835 $ 793,003,901 Water Enterprise 101,319,297 9,387,595 110,706,892 Hetchy Water 114,943,889 20,228,083 135,171,972 Hetchy Power 66,185,543 10,867,161 77,052,704 CleanPowerSF 1,586,046 0 1,586,046 Total $ 971,408,841 $ 146,112,674 $ 1,117,521,515 Bond
Authorization:
Bond authorization amounts associated with the FY 2022 -23 capital budget are as follows:
FY 2022-23 Bonds Financing Costs Total
Wastewater Bonds $ 598,569,066 $ 105,629,835 $ 704,198,901
Water Bonds $ 53,196,371 $ 9,387,595 $ 62,583,966 Hetchy Water Bonds 57,009,331 10,060,470 67,069,801 Total $ 110,205,702 $ 19,448,065 $ 129,653,767 Hetchy Power Bonds $ 119,855,101 $ 21,034,774 $ 140,889,875 Environmental
Review:
Approval of funding mechanisms do not constitute a project under the California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(4) related to the creation of government funding mechanisms which do not involve any commitment to any specific project which may result in a potentially significant impact on the environment . Subsequent approvals of projects to be funded through this C apital Plan would be considered only after the neces sary environmental review process in conformance with CEQA, Administrative Code Chapter 31, and Proposition E (approved by the voters in 2002 for Water and Wastewater projects) by this Commission.
Recommendation SFPUC staff recommends that the Commission adopt the attached resolution.
Attachments
Attachment A: FY 2022-23 SFPUC Capital Budget
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, On January 7, 2022, this Commission heard and considered budget priorities for the department. Additionally, on January 7, January 14, and January 20, 2022, t he San Francisco Public Utilities Commission (SFPUC) General Manager and staff additionally presented the preliminar y proposed FY 2022-23 Capital Budget for the Water Enterprise, Wastewater Enterprise, and Hetch Hetchy Water & Power, including the Power Enterprise and CleanPowerSF (“Capital Budget”) including the list of projects, cost estimates, and schedules to the Commission; and
WHEREAS, An overview of the proposed FY 2022-23 Capital Budget for each SFPUC Enterprise is set forth as Attachment A and is on file with the Commission Secretary; and
WHEREAS, the Capital Budget Steering Committee recommended proceeding with only a single year capital budget supplemental for FY 2022-23; and
WHEREAS, As a preliminary step to development of the FY 2022-23 Capital Budget, a baseline review of all existing project appropriations was completed for potential closeout or repurposing to new capital budget needs; and
WHEREAS, The FY 2022-23 Capital Budget submittals went through a quality review to assure the budget addressees the immediate capital improvement needs of each Enterprise and reflects a sound project prioritization process which included a validation of costs and schedule of all proposed projects and an a ssessment of the ability to deliver the projects within FY 2022-23; and
WHEREAS, The proposed FY 2022-23 Capital Budget must be submitted to, and approved by the Mayor and the Board of Supervisors; and
WHEREAS, The SFPUC General Manager recommends that t he Commission request a supplemental appropriation ordinance for the capital expenditures for each of the three Enterprises presented in the proposed FY 2022- 23 Capital Budget to timely implement public improvement projects; and
WHEREAS, Approval of funding mechanisms do not constitute a project under the California Environmental Quality Act (CEQA) Guidelines Section 15 378(b)(4) related to the creation of government funding mechanisms which do not involve any commitment to any specific project which may result in a potentially significant impact on the environment; and
WHEREAS, The subsequent approvals of projects to be funded through this Capital Plan would be considered only after the necessary environmental review process in conformance with CEQA, Administrative Code Chapter 31, and Proposition E (approved by the voters in 2002 for Water and Wastewater projects) by this Commission; and
WHEREAS, The Water Enterprise is de-appropriating and re -appropriating $38,331,660 in Water Capital Projects to fund project spending in FY 2022-23; and
WHEREAS, The Wastewater Enterprise is de -appropriating and re -appropriating $41,158,347 in Wastewater Capital Projects to fund project spending in FY 2022-23; and
WHEREAS, This Commission has considered the proposed FY 2022-23 Capital Budget for the Water Enterprise, Wastewater Enterprise, and Hetch Hetchy Water and Power, including the Power Enterprise and CleanPowerSF, which totals $1,117,521,515, as set forth in Attachment A to the February 8, 2022 staff report; now, therefore, be it
RESOLVED, That this Commission hereby adopts the FY 2022-23 SFPUC Capital Budget in the amount of $1,117,521,515 for the Water Enterprise, the Wastewat er Enterprise, and Hetch Hetchy Water and Power, including the Power Enterprise and CleanPowerSF as presented at the public hearings on January 7, January 14, and January 20, 2022 and as set forth in the attached Attachment A, as follows:
FY 2022-23 Capital Budget Amount Financing Costs Total Wastewater Enterprise $ 687,374,066 $ 105,629,835 $ 793,003,901 Water Enterprise 101,319,297 9,387,595 110,706,892 Hetchy Water 114,943,889 20,228,083 135,171,972 Hetchy Power 66,185,543 10,867,161 77,052,704 CleanPowerSF 1,586,046 0 1,586,046 Total $ 971,408,841 $ 146,112,674 $ 1,117,521,515 and be it;
FURTHER RESOLVED, That this Commission authorizes the General Manager to seek Board of Supervisors approval for the de- appropriation and re -appropriation of $38,331,660 in Water Capital Projects and de- appropriation and re -appropriation of $41,158,347 in Wastewater Capital Project funding; and, be it FURTHER RESOLVED, That the SFPUC General Manager is authorized to reallocate funds within an Authority Code as provided in the staff report and Attachment A appended to this Resolution and to make further technical adjustments to these approved amounts as may be necessary, or upon further direction from the Commission, t he Mayor , or the Board of Supervisors; and, be it
FURTHER RESOLVED, The General Manager is hereby authorized and directed to submit to the Board of Supervisors proposed o rdinances authorizing the issuance of (1) not to exceed $129,653,767 aggregate principal amount of Water Revenue Bonds and other forms of indebtedness, including commercial paper and State Revolving Fund (SRF) loans, (2) $704,198,901 aggregate principal amount of Wastewater Revenue Bonds and other forms of indebtedness, including commercial paper and SRF loans, under the terms of Proposition E (approved by the voters November 2002 ), and (3) $140,889,875 aggregate principal amount of Power Revenue Bonds and other forms of indebtedness, including commercial paper and loans, subject to the terms of Charter Sections 9.107(6) and 9.107(8). The G eneral Manager shall return to this Commission for a subsequent discretionary approval of any disclosure and transaction related documents prepared in connection with the issuance of such Bonds and other forms of indebtedness.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of February 8, 2022.
Secretary, Public Utilities Commission
Attachment A
FY 2022-23 SFPUC Capital Budget
Attachment A - Wastewater Enterprise
Authority Description of Appropriation or Fund FY 2022-23 19471 Proceeds Sale of Bonds 704,198,901
19141 Wastewater Revenue 83,005,000
19141 Wastewater Capacity Fee 5,800,000
TOTAL - Funding Source 793,003,901
Authority Description of Appropriation or Fund FY 2022-23 SSIP
19142 Program Management 14,000,000
19142 Biosolids/Digester Project 375,532,448
19142 Treatment Plant Improvements - Southeast 31,555,408 19142 Treatment Plant Improvements - North Point 11,314,730 19142 Treatment Plant Improvements - Oceanside 29,201,164 SSIP - Treatment Facilities Program 447,603,750
19142 Collection System Improvements 57,948,296
19142 Pump Stations/Force Mains 307,000
SSIP - Sewer/Collection System Program 58,255,296
19142 Stormwater Management/Green Infrastructure 15,209,899 19142 Flood Resilience/Hydraulic Improvements 48,055,523 SSIP - Storm Water/Flood Control Program 63,265,422
TOTAL - SSIP 583,124,468
Non-SSIP
19141 Renewal & Replacement-Collection System 77,355,890 19141 Renewal & Replacement-Treatment Facilities 25,680,135 19139 Customer Service System 998,325
19134 Treasure Island 215,248
TOTAL - Non SSIP 104,249,598
19471 Financing Cost 105,629,835
TOTAL - Use of Funds 793,003,901
Authority Description of Appropriation or Fund FY 2022-23 19142 Program Management (13,666,744)
19142 Stormwater Management/Green Infrastructure (1,844,368) 19142 Flood Resilience/Hydraulic Improvements (25,647,235) Uses- Total (41,158,347)
19142 Treatment Plant Improvements - Southeast 41,158,347 Funding Source
Use of Funds
Wastewater Uses De-Appropriation
Wastewater Uses Re‐Appropriation
1 Attachment A - Water Enterprise
Authority Description of Appropriation or Fund FY 2022-23 17731 Proceeds Sale of Bonds 62,583,966
19133 Water Enterprise Revenue 46,602,926
19063 Water Capacity Fee 1,520,000
TOTAL - Funding Source 110,706,892
Use Of Funds
Authorit
y Description of Appropriation or Fund FY 2022-23
19056 Regional Water Treatment Program 17,165,884
19057 Water Transmission Program 14,232,044
19061 Buildings & Ground Regional 16,180,543
Total Regional Water 47,578,471
Local Water
19063 Local Water Conveyance/Distribution 50,205,893
19065 System Monitoring and Control 998,326
19114 Buildings & Ground Improvements 2,536,607
TOTAL - Local Water 53,740,826
17731 Financing Costs 9,387,595
TOTAL - Use of Funds 110,706,892
Regional Water De-Appropriation
Authorit
y Description of Appropriation or Fund FY 2022-23
19058 Water Supply and Storage (8,919,150)
19059 Watershed and land Management (4,276,110)
19069 Long Term Monitoring & Permit Program (2,315,740) Uses- Total (15,511,000)
Regional Water Re-Appropriation
19056 Regional Water Treatment Program 11,091,065
19060 Communication & Monitoring 2,969,645
19061 Buildings & Grounds 1,450,290
Uses- Total 15,511,000
Local Water De-Appropriation
19054 Treasure Island (6,451,819)
19062 Local Water Supply Projects (835,847)
19115 Pacifica Recycled Water Project (1,100,994)
80119 Water Supply Projects (14,432,000)
Uses- Total (22,820,660)
Local Water Re-Appropriation
19063 Local Water Conveyance 21,604,697
19067 Pump Station Improvements 468,742
19112 Automated Meter Reading System 747,221
Uses- Total 22,820,660
Funding Source
2 Attachment A - Hetch Hetchy Enterprise
Authority Description of Appropriation or Fund FY 2022-23 15366 Proceeds Sale Power Bonds 140,889,875
15366 Proceeds Sale Water Bonds 67,069,801
15405 Distributed Antenna System Revenue 2,265,000
21284 Low Carbon Fuel Standard 1,114,452
15404 Cap and Trade Revenue 885,548
TOTAL - Funding Source 212,224,676
Authority Description of Appropriation or Fund FY 2022-23 15372 Distribution Services Retail - SFO Substation 4,100,000 15372 Distribution Services Retail - Intervening Facilities 12,000,000 15372 Distribution Services Retail - Affordable Housing 500,000 15372 Distribution Services Retail - Grid Connections 40,432,000 15377 Streetlights 2,265,000
15391 Treasure Island 1,482,543
15400 Small Renewables 1,000,000
15404 Energy Efficiency - General Fund 1,000,000
15383 Power Asset Acquisition 3,406,000
TOTAL - Power 66,185,543
15363 Water Infrastructure Projects 45,723,000
15364 Power Infrastructure Projects 44,140,154
15365 Joint Water/Power Projects 25,080,735
TOTAL - Water 114,943,889
15366 Financing Cost Water 10,060,470
15366 Financing Cost Power 21,034,774
TOTAL - Use of Funds 212,224,676
Funding Source
Use of Funds
3 Attachment A - CleanPowerSF Enterprise
Authority Description of Appropriation or Fund FY 2022-23 80233 ITI from CleanPowerSF Funds 1,586,046
TOTAL-Source of Fund 1,586,046
Authority Description of Appropriation or Fund FY 2022-23 80233 Local Renewable Energy Program 665,000
80233 CleanPowerSF Customer Program 921,046
Total-Uses of Fund 1,586,046
Funding Source
Use of Funds
4