AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
DEPARTMENT Business Services AGENDA NO. 9
MEETING DATE February 13, 2024
A
dopt the Two-Year SFPUC Capital Budget and Authorize Associated Bond Financing for FY 2024-25 and FY 2025-26: Regular Calendar Manager: Laura Busch
Summary of Proposed
Commission Action:
Public Hearing to consider and possible action to adopt the Two-Year Capital Budget of the San Francisco Public Utilities Commission consisting of $1,784,912,774 for FY 2024-25 and $1,792,439,721 for FY 2025-26; and authorize the General Manager to seek Board of Supervisors approval for the issuance of (1) $1,035,007,350 aggregate principal amount of Water Revenue Bonds and other forms of indebtedness, including commercial paper and State Revolving Fund (SRF) loans, (2) $ 1,715,671,086 aggregate principal amount of Wastewater Revenue Bonds and other forms of indebtedness, including commercial paper and SRF loans, and (3) $292,825,860 aggregate principal amount of Power Revenue Bonds and other forms of indebtedness, including commercial paper and loans, all subject to the terms of Charter Sections 9.107(6) and 9.107(8).
Background &
Description:
Under San Francisco Administrative Code Section 3.3, the San Francisco Public Utilities Commission (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.
Accordingly, on September 26, 2023, the SFPUC held a duly noticed public meeting to consider FY 2024-25 budget priorities at which members of the public provided input. Additi onally, on January 22, 26, 29, and February 2, 2024, the General Manager and Staff presented in duly noticed public hearings the preliminary proposed FY 2024-25 and FY 2025-26 Capital Budget to the Commission for the Water 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
Two-Year Capital Budget Development
The development of the attached FY 2024- 25 & FY 2025- 26 Capital Budget occurred from July through December 2023 and was directed by the Budget Steering Committee, comprised of the SFPUC Executive Team and budget staff. In August 2023, budget instructions were issued describing how to proceed with capital planning development. The main Two-Year capital budgeting goal was to develop a balanced budget that is deliverable, incorporating current projects needs and ratepayer affordability. The FY 2024-25 and FY 2025- 26 Capital Budget is consistent with the first two years of the 10- Year Capital Plan that the Commission is also considering on February 13, 2024.
Budgetary Control
Attached is an overview of the FY 2024- 25 and FY 2025- 26 Capital Budget for each enterprise. The budget summary includes an “Authority,” column which contains a five-digit code (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 2023- 24 Capital budget appropriation ordinances
FY 2024-25 and FY 2025-26 Capital Budget Approval
This Resolution approves the proposed SFPUC Capital Budget of $1,784,912,774 f or FY 2024- 25 and $1,792,439,721 for FY 2025- 26 presented at the budget hearings on January 22, 2024, and as shown on Attachment A.
This Resolution also authorizes the General Manager to submit associated bond authorization ordinances to the Mayor and Board of Supervisors. The two–year
capital budget and bond authorization
ordinances will also be presented to the City’s Capital Planning Committee at a future date and the Board of Supervisors in June 2024.
Result
of
Inaction
Delay the SFPUC Capital Budget submittal to the Controller and Mayor’s Office.
Budget &
Financing
Costs:
The SFPUC FY 2024-25 and FY 2025-26 capital budget and
associated financing costs are as follows:
FY 2024-25
Capital Budget
Amount Financing
Costs
Total
Wastewater $892,521,033 $136,726,319 $1,029,247,352
Water 456,053,637 61,964,962 518,018,599
Hetchy Water 152,774,787 26,351,105 179,125,892
Hetchy Power 52,035,690 5,902,981 57,938,671
CleanPowerSF 582,260 0 582,260
Total $1,553,967,407 $230,945,367 $1,784,912,774
FY 2025-26
Capital Budget
Amount Financing
Costs
Total
Wastewater $822,912,008 $120,624,344 $943,536,352
Water 477,182,370 64,895,259 542,077,629
Hetchy Water 180,765,665 30,351,763 211,117,428
Hetchy Power 85,482,971 9,708,911 95,191,882
CleanPowerSF 516,430 0 516,430
Total $1,554,459,622 $225,580,277 $1,792,439,721
Authorize: Adoption of the Two-Year Capital Budget and Authorize Associated Bond Financing Commission Meeting Date: February 13, 2024
Bond
Authorization:
The SFPUC FY 202 4-25 and FY 2025 -26 bond authorizations are as follows:
Enterprise FY 2024-25 FY 2025-26 Total
Wastewater $911,508,795 $804,162,291 $1,715,671,086
Water – Regional/
Local
413,099,747 432,635,062 845,734,809
Water - Hetchy 99,396,533 89,876,008 189,272,541
Water - Total 512,496,280 522,511,070 1,035,007,350
Power 115,630,709 177,195,151 292,825,860
Total $1,539,635,784 $1,503,868,512 $3,043,504,926
Environmental
Review:
This action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines section 15378(b)(4) because adoption of the Capital Budget involves creation of a government funding mechanism or other fiscal activities and does not involve any commitment to a specific project which may result in a potentially significant impact on the environment.
The SFPUC will consider approval of projects to be funded through this Capital Budget only after completion of any environmental review required by CEQA and Administrative Code Chapter 31 and any certification required by Proposition E (approved by the voters in 2002 for water and wastewater projects) and Proposition A (approved by the voters in 2018 for power projects).
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
Attachment: Attachment A: Two Year SFPUC Capital Budget
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, On September 26, 2023 and January 22, 26, 29 and February 2, 2024, this Commission heard and considered budget priorities for the department , and the San Francisco Public Utilities Commission (SFPUC) General Manager and Staff presented the prelimi nary proposed FY 2024-25 and FY 2025-26 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 2024-25 and FY 2025-26 Capital Budget for each SFPUC Enterprise is set forth as Attachment A and is on file with the Commission Secretary; and
WHEREAS, The proposed FY 2024-25 and FY 2025-26 Capital Budget must be submitted to, and approved by the Mayor and the Board of Supervisors; and
WHEREAS, This action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines section 15378(b)(4) because adoption of the Capital Budget involves creation of a government funding mechanism or other fiscal activities and does not involve any commitment to a specific project which may result in a potentially significant impact on the environment; and
WHEREAS, The SFPUC will consider approval of projects to be funded through this Capital Budget only after completion of any environmental review required by CEQA and Administrative Code Chapter 31 and any certification required by Proposition E (approved by the voters in 2002 for water and wastewater projects) and Proposition A (approved by the voters in 2018 for power projects); and
WHEREAS, This Commission has considered the proposed FY 2024-25 and FY 2025- 26 Capital Budget for the Water Enterprise, Wastewater Enterprise, and Hetch Hetchy Water and Power, including the Power Enterprise and CleanPowerSF, which totals $1,784,912,774 for FY 2024-25 and $1,792,439,721 for FY 2025-26, as set forth in Attachment A to the February 13, 2024, staff report; now, therefore, be it
RESOLVED, That this Commission hereby adopts the FY 2024-25 and FY 2025-26 SFPUC Capital Budget in the amount of $1,784,912,774 for FY 2024-25 and $1,792,439,721 for FY 2025-26 and for the Water Enterprise, the Wastewater Enterprise, and Hetch Hetchy Water and Power, including the Power Enterprise and CleanPowerSF as presented at the public hearings on January 29, 2024 and as set forth in the attached Attachment A, as follows:
FY 2024-25
Capital Budget
Amount Financing
Costs
Total
Wastewater $892,521,033 $136,726,319 $1,029,247,352
Water 456,053,637 61,964,962 518,018,599
Hetchy Water 152,774,787 26,351,105 179,125,892
Hetchy Power 52,035,690 5,902,981 57,938,671
CleanPowerSF 582,260 0 582,260
Total $1,553,967,407 $230,945,367 $1,784,912,774
FY 2025-26
Capital Budget
Amount Financing
Costs
Total
Wastewater $822,912,008 $120,624,344 $943,536,352
Water 477,182,370 64,895,259 542,077,629
Hetchy Water 180,765,665 30,351,763 211,117,428
Hetchy Power 85,482,971 9,708,911 95,191,882
CleanPowerSF 516,430 0 516,430
Total $1,554,459,622 $225,580,277 $1,792,439,721
and be it;
FURTHER RESOLVED, That the 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, the 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 ordinances authorizing the issuance of (1) not to exceed $1,035,007,350 aggregate principal amount of Water Revenue Bonds and other forms of indebtedness, including commercial paper and State Revolving Fund (SRF) loans, (2) $1,715,671,086 aggregate principal amount of Wastewater Revenue Bonds and other forms of indebtedness, including commercial paper and SRF loans, under the terms of Proposition E (approved by the voters November 2002), and (3) $292,825,860 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 General 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 14, 2023.
Secretary, Public Utilities Commission
Attachment A
Two Year SFPUC Capital Budget
FY 2024-25 and FY 2025 -26
Attachment A Wastewater Enterprise
Funding Source
Authority Description of Appropriation or Fund FY 2024-25 FY 2025-26 19471 Proceeds Sale of Bonds 911,508,795 804,162,291
19141 Wastewater Revenue 112,415,407 133,891,216
19141 Wastewater Capacity Fee 5,323,150 5,482,845
TOTAL - Funding Source 1,029,247,352 943,536,352
Use of Funds
Authority Description of Appropriation or Fund FY 2024-25 FY 2025-26 SSIP
19142 Program Management 16,000,000 12,996,970
19142 Biosolids/Digester Project 378,512,525 188,532,739 19142 Treatment Plant Improvements - Southeast 83,860,148 113,581,087 19142 Treatment Plant Improvements - Other 54,491,438 57,913,311 19142 Collection System Improvements 15,587,483 44,773,049 19142
Stormwater Management/Green
Infrastructure 7,677,412 17,951,320
19142 Flood Resilience/Hydraulic Improvements 82,267,176 158,669,505 TOTAL - SSIP 638,396,182 594,417,981
Non-SSIP
19141 Renewal & Replacement-Collection System 128,538,826 142,124,003 19141 Renewal & Replacement-Treatment Facilities 24,000,000 25,000,000 19134 Treasure Island 36,624,859 4,272,611
19139 Wastewater Facilities and Infrastructure 64,961,166 57,097,413 TOTAL - Non SSIP 254,124,851 228,494,027
19471 Financing Cost 136,726,319 120,624,344
TOTAL - Use of Funds 1,029,247,352 943,536,352
Attachment A Water Enterprise
Funding Source
Authority Description of Appropriation or Fund FY 2024-25 FY 2025-26 17731 Proceeds Sale of Bonds 413,099,747 432,635,062
19133 Water Enterprise Revenue 99,977,942 104,353,430
19063 Water Capacity Fee 4,940,910 5,089,137
TOTAL - Funding Source 518,018,599 542,077,629
Use Of Funds
Authority Description of Appropriation or Fund FY 2024-25 FY 2025-26 80526 Reg Water Facilities and Infra 203,597,839 122,663,166 80527 Watersheds & Right of Way 8,870,044 9,694,978
80528 Reg Alternative Water Supplies 6,240,441 7,449,609 Total Regional Water 218,708,324 139,807,753
Local Water
80529 Local Water Facilities and Infra 227,398,679 319,859,530 80530 Local Water Recourses (WRD) 9,946,634 17,515,087 TOTAL - Local Water 237,345,313 337,374,617
17731 Financing Costs 61,964,962 64,895,259
TOTAL - Use of Funds 518,018,599 542,077,629
Attachment A Hetch Hetchy
Funding Source FY 2024-25 FY 2025-26
Authority Description of Appropriation or Fund
15366 Proceeds Sale Power Bonds 115,630,709 177,195,151 15366 Proceeds Sale Water Bonds 99,396,533 89,876,008
15405 Hetch Hetchy Revenue Funds (Power/Water) 20,222,482 37,238,254 15404 Cap and Trade Revenue 1,006,901 1,151,119
21284 Low Carbon Fuel Standard 807,938 848,778
TOTAL - Funding Source 237,064,563 306,309,310
Use of Funds
Authority Description of Appropriation or Fund FY 2024-25 FY 2025-26 15363 Water Infrastructure Projects 56,049,054 57,052,901 15364 Power Infrastructure Projects 25,730,244 61,113,838 15365 Joint Water/Power Projects 70,995,489 62,598,926 TOTAL - Water 152,774,787 180,765,665
80427 Distribution Services Retail 30,100,000 54,739,676 80427 ITS Capital Projects 74,690 71,295
80427 Distribution Services Retail - Treasure Island 638,000 10,362,000 80427 Distribution Services Retail - Grid Connections 8,050,000 8,350,000 15377 Streetlights 3,615,000 3,615,000
15400 Small Renewables 1,000,000 1,000,000
15404 Energy Efficiency - General Fund 1,000,000 1,000,000 15383 Power Asset Acquisition 7,558,000 6,345,000
TOTAL - Power 52,035,690 85,482,971
15366 Financing Cost Power 17,344,606 26,579,273
15366 Financing Cost Water 14,909,480 13,481,401
Total Financing Costs 32,254,086 40,060,674
TOTAL - Use of Funds 237,064,563 306,309,310
Attachment A CleanPowerSF
Funding Source
Authority Description of Appropriation or Fund FY 2024-25 FY 2024-25
80233 ITI from Cleanpower Funds 582,260 516,430
TOTAL-Source of Fund 582,260 516,430
Use of Funds
Authority Description of Appropriation or Fund FY 2024-25 FY 2024-25
80233 Local Renewable Energy Program 582,260 516,430
Total-Uses of Fund 582,260 516,430