OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 4th Floor
San Francisco, CA 94102
T 415.934.5707
F 415.554.1877
Date: September 24, 2024
To: Commissioner Tim Paulson, President
Commissioner Anthony Rivera Vice President
Commissioner Newsha K. Ajami
Commissioner Kate H. Stacy
Through: Nancy L. Hom, CFO and AGM Business Services
From: Laura Busch, Deputy CFO and Budget Director
Subject: Fi
nal Changes to FY 2024-25 & FY 2025-26 Budget
since Commission Adoption
This memo is to provide an overview of the final changes to the San Francisco Public Utilities Commission (SFPUC) FY 2024-25 and FY 2025-26 Budget since Commission Adoption on February 13, 2024. The final budget adoption by the Mayor and Board of Supervisors occurred on July 30, 2024.
After Commission approval, the budget went through both the Mayor’s and Board of Supervisors’ phases of budget review and several changes were made, as described below.
FY 2024-25 a
nd FY 2025-26 SFPUC Budget Changes
Commission Approved Adopted Budget Variance
FY 2024-25 FY 2025-26 FY 2024-25 FY 2025-26 FY 2024-25 FY 2025-26 1,992,354,768 2,110,646,439 2,023,064,914 2,157,471,235 30,710,146 46,824,796 The total budget adopted by the Commission was $1,992,354,768 for FY 2024-25 and $2,110,646,439 for FY 2025-26. The final Board adopted budget is $2,023,064,914 for FY 2024-25 and $2,157,471,235 for FY 2025-26. The net change from the Commission adopted budget is $30,710,146 for FY 2024-25 and $46,824,796 for FY 2025-26, or approximately 2 percent in each year.
The drivers for the budget increase are as follows:
Change driver Note FY 2024-25 FY 2025-26
General Reserve contribution for
CleanPowerSF due to increases
revenue projections
1 $ 13,901,256 $ 19,366,178
Labor Cost changes related to final
negotiated MOUs and rightsizing of
salary savings
2 7,547,047 10,970,072
Changes to citywide workorders and
COWCAP 3 4,208,158 8,971,900
Board and Mayor Cuts 4 (5,202,614) (6,584,574)
Addbacks, Community Programs 5 3,616,000 4,451,000
Repayment to General Fund 6 3,500,000 -
Rebalancing 525 Golden Gate Costs
and Programmatic Projects 7 3,119,410 3,043,307
Debt and Capital Assumptions 8 799,001 8,040,327
Balancing adjustments for Work Order
Fund 9 (887,480) (845,891)
Other Minor changes 10 109,368 (587,523)
Total $ 30,710,146 $ 46,824,796
Notes
1. The biggest driver of the change is an increase to the general reserve contribution in CleanPowerSF as a result of higher revenue assumptions. Rates were set in Spring of 2024. These increased reserve contributions are in line with our fund balance reserve policy.
2. Labor cost increases due to Cost of Living Adjustments (COLA) agreed between the unions and the City after the budget went to the Commission, as well as changes in health and pension costs to reflect updated cost assumptions. The final negotiated cost are
1.5% on July 1, 2024, 1.5% on January 4, 2025, 1% on June 30, 2025, 1% on July 1, 2025, 1.5% on January 3, 2026, 2% on June 30, 2026, 2% on January 2, 2027, and 2.5% on June 30, 2027. vs approximately 3% annually in the Commission adopted budget. In addition, this includes a thorough examination of all salary savings (or attrition), which has been right-sized to match future projected use.
3. Workorder increases made during Mayor Phase including energy costs from Hetch Hetchy Power, services from Department of Human Resources, City Attorney’s Office, and the Controller’s Office, which includes a reduction to COWCAP (County Wide Cost Allocation Plan) of ($0.5M) per year.
4. Board and Mayors cuts, which include 23 positions, 10 vehicles and $0.9M of non-personnel costs.
5. Board Budgetary addbacks include outreach and community programs.
6. $3.5M one-time repayment of an old loan from the City’s General Fund relating to public power expansion in Hetch Hetchy Power.
Early repayment was not obligatory but was possible given a healthy fund balance in Hetch Hetchy Water and Power. The loan is now fully repaid.
7. Rebalancing of costs associated with 525 Golden Gate (SFPUC headquarters) and updated programmatic project assumptions.
8. Changes related updated debt and revenue funded capital assumptions
9. Balancing adjustments to the workorder fund to ensure recoveries and expenditures match service requests from other City Departments.
10. Other minor changes
If you have questions, please contact me at [email protected].
cc:
Ronald P. Flynn, Deputy General Manager, SFPUC
Barbara Hale, AGM, Power Enterprise, SFPUC
Joel Prather, AGM, Wastewater Enterprise, SFPUC
Steve Ritchie, AGM, Water Enterprise, SFPUC
Stephen Robinson, AGM, Infrastructure, SFPUC
Wendy Macy, Chief People Officer, SFPUC
Masood Ordikhani, AGM, External Affairs, SFPUC
Nancy L. Hom, CFO and AGM, Business Services, SFPUC