San Francisco Public UtilitiesCommission
Adoption of:
Amendment to FY 2025-26 Operating Budget
Augment the Water Revenue Bond Authorization associated with FY 2025-26 Capital Budget
Update to 10-Year Capital Improvement Plan, FY 2025-26 to FY 2034-35 10-Year Financial Plan, FY 2025-26 to FY 2034-35
February 11,2025
Laura Busch, Deputy Chief Financial Officer
Anna Duning, Budget Director
Trey Hunter, Capital Budget Manager
Erin Corvinova, Financial Planning Director
1 Commission Budget Actions today
• For adoption today:
• Item 10: Amendment to FY 2025-26 Operating Budget
• Item 11: Augment the Water Revenue Bond
Authorization associated with FY 2025-26 Capital
Budget
• Item 12: Update to 10-Year Capital Improvement Plan,
FY 2025-26 to FY 2034-35
• Item 13: 10-Year Financial Plan, FY 2025-26 to FY
2034-35
2 Budget timeline
Date Item
March-December 2023 Staff level development of the 2-year budget and 10-Y ear CIP January 2024 4 special budget hearings of the Commission to go over budget and CIP in detail
February 13, 2024 Commission adoption of 2 year Operating and Capital Budget and 10- Y ear CIP
July 31, 2024 Budget adopted by Mayor and Board
September 24, 2024 Final budget provided to Commission
January 14, 2025 Commission hearing on FY 2025- 26 budget priorities TODAY Adoption of amended FY 2025 -26 budget and update to 10 Year CIP , along with 10-Year Financial Plan
February 21, 2025 Budget proposed to Mayor’s Office
3 Reminder: Budget Priorities
4 Affordability
Adopted affordability policy
for Water and Wastewater
Efficient capital planning
Responsible
Management
Addressing Regulatory
Requirements
Financial Sustainability
Workforce: Reducing
vacancies, increasing retention
Accountability: Racial Equity
and Transparency
Responsible management of
our system, maintenance
Investing
Where it
Matters
Contributing to economic
vitality: capital investment and
job creation
Replacing aging infrastructure
Meeting new customer
demands
Environmental stewardship
Resilience and climate change
Summary of 3 budget items
• Minimal changes to FY 2025-26 Operating
Budget (year 2 of fixed biennial budget)
• No change to FY 2025-26 Capital project
budget
• Minor change to FY 2025-26 Capital funding
sources
• Minimal changes to 10 Year CIP since last
version of plan, includes cuts to cancelled
projects and known project increases
5 Item 10: Amendment to
FY 2025-26 Operating
Budget
6 SFPUC Operating Budget Overview
7 Revenue-
funded Capital
12% Debt Service
24%
Personnel
14%
Power Purchase and
Distribution 25%
Non-Personnel
19%
General Reserve
2%
Programmatic Projects
4%
• Capital is SFPUC’s largest
cost driver at 36% (debt
service 24% + revenue
funded capital 12%)
• Power purchase and
distribution is next at 25%
• Followed by Personnel and
Non-Personnel costs that
support daily operations at
14% and 19% respectively
Capital Funding
FY 2025-26
$2 Billion
Operating
Budget
8 Key Changes to FY 2025-26 budget
$30.2 million overall reduction to FY 2025-26 Operating Budget • Main driver: $23.1 Million reduction in CleanPowerSF due to lower volume forecast, with accompanying reduction in power purchase expenses
• $13.6 Million reduction in revenue-funded capital
• Water’s Regional capital budget plan is increasing revenue funding by $15.0 Million and Local is decreasing by $27.6 Million.
• Hetch Hetchy Water’s plan is decreasing by $1.4 Million • Wastewater and Hetch Hetchy Power have minimal changes • Offset by modest increases:
• $4.3 Million increase to contribution to fund balance in CleanPowerSF in alignment with reserves policy
• $1.7 Million increase in labor costs to support projected hiring for Hetch Hetchy Water, CleanPowerSF and Customer Services (no position changes) • $0.5 Million increase in upcountry facilities maintenance Do we need Board
approval?
• No increase in
bottom line and less
than 5% change so
budget will not be
subject to full review
• ONLY the changes
in revenue funded
capital require board
approval
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
FY2024 FY2025 FY2026
SFPUC Estimated Budget
($millions)
Operating Uses Capital Uses Purchase of Power
Operating Budget Growth
• Budget will grow by 19% or
$339 Million from FY 2024 to
FY 2026
• Capital and power
purchase remain the large
cost drivers, growing by $277
Million, or 82% of the growth
9 13.2%
5.1%
1,788
2,127
2,024
0 200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
AAO Total, budgeted and funded FTE,
excludes off budget positions and attrition
AAO*: Since FY 2019-20, the budget grew by 49%
meanwhile FTE grew by just 6%
10 AAO total Change % change
FY2019-20 1,690
FY2020-21 1,667 -23 -1.4%
FY2021-22 1,708 41 2.5%
FY2022-23 1,718 10 0.6%
FY2023-24 1,724 5 0.3%
FY2024-25 1,750 26 2.2%
FY2025-26 1,783 33 1.9%
92 6.1%
COVID
*AAO: Annual Appropriation Ordinance
Biennial Budget
Item 11: Augment the Water
Revenue Bond Authorization
associated with FY 2025-26
Capital Budget
11 Components of the Capital Budget
• 2-Year Capital Budget (near-term)
• Authorizes actual appropriations/spending for specific projects over the 2-year period
• Current focus: FY 2025-26 (second year of already appropriated 2-year budget) • Debt Authorization (Funding tool - to be referenced later) • Separate from budget appropriation
• Provides authority to issue bonds
• 10-Year Capital Improvement Plan (longer-term)
• Charter mandated annual updates provide a roadmap of proposed infrastructure investments
• Serves as a guide for funding needs and project delivery capacity • How they all work together:
• 10-Year CIP: sets vision
• 2-Year Budget: provides authority to spend
• Debt authorization: ensures the SFPUC can borrow $ for capital needs 12 FY 2025-26 $1.6B Capital Budget
Summary
13 $-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800$ in Millions
FY2025-26 Capital Budget by Enterprise
Wastewater Water Hetch Hetchy Water
Hetch Hetchy Power CleanPowerSF
Wastewater
• BDFP ($188.5M)
• Flood Resilience ($155.2M)
• R&R ($167.1M)
• Ocean Beach Climate Adaptation ($52M)
Water
• Water Transmission ($58.8M)
• Millbrae Campus Imp. ($34.6M)
• Local Water Conveyance ($136.9M)
• New SFWD HQ ($147.6)
HHWP
• Moccasin Powerhouse ($46.5M)
• SJPL Valve & Safe Entry Imp. ($30M)
• SFO Substation ($21.5M)
• Distribution Interface Redev. Projects (18.5M)
***Note: No proposed changes to the
approved FY 2025-26 Capital Budget
Why do we need debt authorization?
What is Debt Authorization?
• Legal authority granted by the Commission and Board of Supervisors to issue debt
• Establishes maximum amount of debt that can be issued in respective enterprises • Required under SF Charter Section 8B.124 for revenue bonds Debt Authorization vs. Appropriations
• Appropriations provide spending authority for respective fiscal year • Debt authorization provides authority to borrow appropriated funds Important Considerations
• Authorization does not obligate SFPUC to issue debt
• Actual debt issuance depends on project needs and market conditions 14 Minor Changes to SFPUC's Debt
Authorization in FY2025-26
15 $ in Millions
FY 2025-26
(Approved
02/2024)
FY 2025-26
(Proposed
02/2025) Change
Wastewater 804.2 804.2 <(0.1)
Water
Regional &
Local
432.7 445.3 12.6
Hetchy Water 89.9 91.4 1.5
Total 522.5 536.6 14.1
Power 177.2 171.7 (5.5)
PUC Total 1,503.9 1,512.5 8.6
• 0.6% net change ($8.6M);
decreases exempt from
approval
• Water increase ($14.1M)
offset by other reductions
• Reflects optimized
debt/revenue mix
• ***Note: FY 2025-26
project budget
appropriation request
unchanged
Item 12: Update to 10-Year
Capital Improvement Plan, FY
2025-26 to FY 2034-35
16 FY 2025-26 to FY 2034-35 10-Year Capital Improvement Plan Overview by Enterprise
Major Projects in the Capital Plan:
System Reliability and Resilience: Water
Millbrae Yard Laboratory and Shop
Improvements, SFWD Headquarters, and
replacement of water mains throughout the
system
Protecting Public Health: Wastewater
Nutrient Reduction, Biosolids Digester Facility,
stormwater/treatment plant improvements, flood
resistance, and replacement of sewer mains
throughout the system
System Sustainability and Expansion: Power
Public Power Expansion, Clean Steam, Moccasin
Penstocks, expanding clean energy sources,
enhancing reliability
Breakdown of the 10-Year CIP by Enterprise
17 Changes since last year's CIP
18 0
2,000
4,000
6,000
8,000
10,000
12,000
14,000$ iin Millions
SFPUC 10-Y ear Capital Improvement Plan
Comparison
Water Wastewater Hetch Hetchy Water and Power CleanPowerSF The FY 2026-35 Capital Plan decreased from
$11.8B to 11.1B (over $700M or -6.5%)
Major Changes by Enterprise
• WWE – $165M increase to the Biogas portion
of the Biosolids project in FY2027. Smaller plan
overall
• Water – SVWTP Ozone increased by $74.3M.
Reduced significantly due to the removal of Los
Vaqueros Reservoir and Daly City Recycled
Water projects.
• HHWP and CPSF – smaller appropriation
requests in the out years
**Note: this spring the full CIP development
process begins which will culminate in the
next 2-year budget and 10-Year CIP
Overview of the FY 2026-35 10-Year CIP
19 0
500
1,000
1,500
2,000
2,500
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 $ in Millions
FY2026-35 10-Y ear Capital Improvement Plan
Water Wastewater Hetch Hetchy Water and Power CleanPowerSF • Notably this is a
balanced capital plan
(sources = uses) and
aligns with the 10 Year
Financial Plan
• 71% of the plan is
anticipated to be bond
funded
• 29% is anticipated to be
revenue funded,
exceeding 15% minimum
required
Major Projects in this 10-Year CIP
Water Enterprise ($2.4B - 21.9% of Plan)
• Sunol Valley Treatment Plant Ozone Project (Total
project budget is ~$326M and with an additional
$74.3M added in this year’s CIP)
• Major Pipeline Rehabilitation & Replacement
Program ($321M)
• New SFWD Headquarters ($266M)
• Advanced Metering Infrastructure Upgrades ($21M)
20 Major Projects in this 10-Year CIP
Wastewater Enterprise ($5.9B - 53.2% of
Plan)
• Biosolids Digester Facilities Project ($374M) - Major increase with biogas funding (+$165M)
• Southeast Plant Nutrient Reduction Project ($1.2B)
• Southeast Bay Outfall Assessment & Rehabilitation
• Critical Flood Resilience: Lower Alemany ($256M) &
Folsom Area ($253M)
• Collection System Renewal ($1.8B)
21 Major Projects in this 10-Year CIP
Hetch Hetchy Water & Power ($2.7B -
24.5% of Plan)
• Moccasin Penstock Rehabilitation ($315M)
• SFO Substation Improvements ($228M)
• Clean Steam Loop Project ($217M)
• Grid Modernization & Reliability
• Dam Safety & Water Conveyance Upgrades
CleanPowerSF ($48.4M - 0.4% of Plan)
• Local Renewable Energy Program Development
22 Services of the San Francis co Public Utilities Commis s ion Item 13: Adoption of 10-
Year Financial Plan
FY 2025-26 to FY 2034-35
23Mountain Tunnel Flow Control Facility
10-Year Financial Plan Background
• Updated annually on a rolling basis, as required by SF Charter
• Plans are complex Excel-based financial models
• Forecast revenues, expenses, and rates
• Confirm compliance with all financial policies
• Inputs from Capital Finance, Budget, Power Risk Management, and Water Resources Planning
• Accompanying written report details assumptions and key takeaways
24 Key Policies That Guide Financial Planning
• Financial policies set guidelines
for rate-setting and budgeting
decisions
• Approved by Commission and
reviewed periodically
• Adopting and following strong
financial policies supports
SFPUC’s bond credit ratings
25 • Sets minimum reserves as a % of operating
expenses
• Provides cushion of reserves for emergencies
Fund Balance Reserve Policy
• Ensures sufficient revenues to pay debt service
• Meets bond indenture requirements
Debt Service Coverage Policy
• Sets target bill as a % of typical and low-income
household income
• If not meeting, requires justification and plant to
address
• Water/wastewater only
Affordability Policy
Major Updates in this Year’s Plan
• Challenges facing utility industry
• Climate change, uncertain economy, regulatory complexity, and aging infrastructure
• Bond rating agencies have expressed concern
• Plan includes changes to demonstrate commitment to
financial sustainability
• Major long-term capital investments to meet challenges • More conservative assumptions: Lower sales volumes, higher debt costs, and higher expense growth
• Result is: Higher rate increases and stronger financial metrics 26 Expense Assumptions
Operating Expenses
• Base of FY 2025-26 proposed
budget
• Assume savings based on
historic percent of budget spent
• Inflationary growth afterward
• 4.4% on fringe benefits
• 3% elsewhere
• Power supply costs modelled
based on customer demands,
market prices
Capital Financing
• Interim financing with
commercial paper
• Revenue bonds refund
commercial paper
• 6% interest rate
• 30-year amortization
• Level debt service
• Federal and state low-cost
loans (WIFIA and SRF)
incorporated only if executed
27 Water & Wastewater Sales Recovery by FY 2026-27
28 • More conservative
forecast this year vs.
last year’s plan
• Pandemic recovery at
“new normal”
• Drought recovery
continues 1-2 years
• Long-term trends from
planning documents,
with adjustment down
• Price elasticity
• Conservation
• Job & population
growth
• Wastewater volumes
are based on retail
water
update
Water Expense Summary
29 • Average annual
growth: 3.4%
• Capital is the driver
• Costs of regional
water system split
between retail and
wholesale
customers
Wastewater Expenses More than Double
30 • Average annual
growth: 8.9%
• Capital is the driver
• Huge increase in
capital costs
translates into
higher debt
service costs
• All costs borne by
San Francisco
retail ratepayers
Projected Water & Wastewater Rate Increases
31 Fiscal Year Water Rate
Increase
Wastewater
Rate Increase
Combined
Bill Increase
FYE 2020* 8.3% 7.0% 7.6%
FYE 2021* 7.8% 8.0% 7.9%
FYE 2022* 7.9% 8.0% 8.0%
FYE 2023* 0.0% 0.0% 0.0%
FYE 2024* 5.0% 9.0% 10.5%
FYE 2025* 5.0% 9.0% 8.0%
FYE 2026* 5.0% 9.0% 9.7%
FYE 2027 7.0% 15.0% 11.5%
FYE 2028 7.0% 15.0% 12.5%
FYE 2029 8.0% 14.0% 11.8%
FYE 2030 8.0% 12.5% 11.7%
FYE 2031 7.0% 10.5% 9.1%
FYE 2032 6.5% 6.5% 6.4%
FYE 2033 6.5% 5.0% 5.5%
FYE 2034 3.5% 5.0% 4.4%
FYE 2035 3.0% 5.0% 4.2%
10-Year Avg. 6.0% 10.5% 9.6%
HistoricProjected
* Approved rates, all others forecast/planning only
• Forecasted to exceed affordability targets
outside of 10-year window
• Early warning of affordability issues 10+ years
out allows time to adjust in capital planning
Projected Water & Wastewater Rate Increases
• Goal of higher rate
increases in this plan:
• Better financial metrics
• More buffer to mitigate
risks
• Maintain bond credit
ratings
• Maintaining high
bond ratings = lower
interest rates = lower
long-term costs
• Increasing rates now
aims to save money in
the long run
32 • Rate survey context: our near-term bill projections are line with peer agencies
• Few peers publish long-term rate forecasts
Hetch Hetchy Growing Customer Base
33 • More conservative
forecast this year
vs. last year’s plan
• Pandemic
recovery at “new
normal”
• Delays in new
projects coming
online
• 5.8% annual growth
reflects new
customers in
redevelopment and
infill areas
Hetch Hetchy Power Expenses
34 • Average annual
growth: 8.7%
• Largest growth:
Purchased power
supply and delivery
• Some expense
growth related to
capital and supply
costs for new
customers
• Partially offset by
additional revenues
CleanPowerSF Expenses Steady
35 • Average
annual
growth: 1.9%
• Driven by
power supply
costs, and
subject to
resulting risks
update
Power Rate Increases
• Hetch Hetchy increases
• Short-term to meet higher supply and delivery
costs, target stronger financial metrics
• Long-term driven by capital
• CleanPowerSF’s trajectory flat
• Subject to change based on power markets
• FYE 2026 rates to Commission April 2025
• Expected to be lower than PG&E
36 Fiscal Year Hetch Hetchy
Power
CleanPowerSF
Generation
FYE 2024* 14.0% 15.0%
FYE 2025* 12.0% 8.5%
FYE 2026 10.0% 3.0%
FYE 2027 9.5% 0.0%
FYE 2028 9.5% 0.0%
FYE 2029 8.0% 0.0%
FYE 3030 5.0% 1.5%
FYE 2031 5.0% 1.5%
FYE 2032 4.5% 0.0%
FYE 2033 4.0% 0.0%
FYE 2034 4.0% 0.0%
FYE 2035 5.0% 0.0%
10-Year Avg. 6.4% 0.6%
• Hetch Hetchy Power rates shown are for retail, non-municipal customers. General Use rates for certain municipal depts. increase by $0.03/kWh annually until they reach equivalent retail rate • CleanPowerSF rate increase is only the generation portion of the bill; a 3% increase in the generation portion represents an approximate 1% increase on the overall bill
* Approved rates, all others forecast/planning only HistoricProjected Proposed Plans Meet & Exceed Financial Policy
Minimums, though Long-Term Affordability Pressure
37 Metric Policy
Requirements Water Wastewater Hetch Hetchy
Power CleanPowerSF
Fund Balance as a % of
Operating Expenses
Minimum 25% and if
>68% note plan 33% - 54% 42 - 49% 35% - 59% n/a
Days Cash on Hand
(CleanPowerSF)
Minimum 150 and
target 180 n/a n/a n/a 186 - 324
Current Debt Service
Coverage Minimum 1.10x 1.21x - 1.34x 1.25x – 1.71x 1.90x - 3.00x n/a Indenture Debt Service
Coverage Minimum 1.35x 1.55x – 1.71x 1.49x – 2.48x 3.57x - 12.89x n/a Revenue-Funded % of
Capital Plan Minimum 15-30% 37.2% 22.8% 33.2% 100%
Typical Household
Affordability
(Water & Sewer)
Max. 3.0% of 40th
percentile household
income or justify
1.7% - 3.1%
under target until FYE 2040 n/a n/a
Low-Income Household
Affordability
(Water & Sewer)
Max. 7.0% of 20th
percentile household
income or justify
4.0% - 7.3%
under target until FYE 2037 n/a n/a
Services of the San Francis co Public Utilities Commis s ion Questions?
38 AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
DEPARTMENT Financial Services
AGENDA NO.
10 MEETING DATE
February 11, 2025
Calendar: Regular Calendar
Project Manager: Laura Busch
Adopt the Amendment to the F iscal Year 2025-26 SFPUC Operating Budget (San Francisco Administrative Code Section 3.3(c))
Summary of Proposed
Commission Action:
Public Hearing to consider and possible action to amend the Fiscal Year 2025-26 San Francisco Public Utilities Commission Operating Budget including the Revenue Transfer for Capital , with a reduction of $30,233,308, for a total amount of $2,127,237,927; and authorize the General Manager to submit a supplemental appropriation request to the Mayor and Board of Supervisors.
Background and
Description:
Budget Development
On February 13, 2024, by Resolution No. 24-0030, the San Francisco Public Utilities Commission (SFPUC) approved the fixed Fiscal Year (FY) 2024-25 and FY 2025- 26 Biennial Operating Budget in the amount of $2,023,680,883 for FY 2024- 25 and $2,157,471,235 for FY 2025-26.
SFPUC staff developed the proposal for t he fixed Biennial Operating Budget during the fall of 2023. In August 2023, the General Manager issued budget development instructions including guidance on budgetary growth and position requests for FY 2024- 25 and FY 2025-26. The executive teams reviewed the proposals and provided feedback through a series of Budget Steering Committee meetings in November 2023.
General Manager review and approval occurred
during additional meetings in December 2023. Special Hearings of the Commission to go over the proposed budget were held on January 26, January 29, and February 2, 2024, and the Commission formally adopted the Biennial Operating Budget on February 13, 2024.
Because the SFPUC is currently operating under a fixed two -year budget, staff is only proposing critical changes to move forward in this FY 2025-26 mid-cycle budget amendment.
Agenda Title: Adopt the Amendment to the FY 2025-26 SFPUC Operating Budget Commission Meeting Date: February 11, 2025
2 To comply with Charter Section 9.101 and the City’s Budget submittal schedule, the Commission -approved FY 2025- 26 budget amendment must be submitted to the Mayor and Controller by February 21, 2025 for incorporation into the Mayor’s proposed budget and consideration by the Board of Supervisors. The SFPUC is scheduled to present the proposed changes to the biennial budget to the Board of Supervisors in June 2025.
Summary of Changes to FY 2025-26 Budget
The proposed change to the original FY 2025- 26 operating budget and revenue transfer for capital budget is a reduction of $30,233,308, resulting in a total revised FY 2025-26 budget of $2,127,237,927.
In addition, a “shadow” operating budget for FY 2026- 27 of $2,184,921,674 will also be adopted as part of the Mayor’s upcoming two-year rolling budget process. This “shadow” budget is simply a placeholder. SFPUC staff
will be launching a full budget
development process in Spring 2025 to put in place another fixed two-year budget for FY 2026- 27 and FY 2027 -28, which will be brought to the Commission for adoption in February 2026.
Sources:
The $30,233,308 reduction in total funding sources from the original FY 2025-26 adopted budget includes:
• A net reduction in water revenues due to $3.2 million in non- ratepayer real estate revenue to cover the costs associated with the SFPUC Customer Assistance Program. There are also more conservative retail account growth assumptions, resulting in lower projected water sales and a $5.5 million decrease in projected retail rate revenues. This is partially offset by an increase of $5.0 million in wholesale revenues driven primarily by higher volumes and an increase in wholesale rate
projections. Water will be decreasing its use of Fund Balance from a budgeted $39.1 million to $32.4 million. The decrease is largely due to changes in revenue-funded capital.
• A net reduction to sewer service charges of $3.9 million. This reduction from the original budget is a result of volume adjustments. Wastewater will be increasing its use of Fund Balance from $34.5 million to $38.9 million due to the
reduction in revenue.
• Hetch Hetchy Power retail revenues are updated to reflect more conservative volume assumptions and assumed delays in
projects, resulting in a $16.7 million reduction in retail sales, offset by a $8.0 million increase to wholesale revenues, and a $1.9 million increase in transfers from the Water Enterprise.
Agenda Title: Adopt the Amendment to the FY 2025-26 SFPUC Operating Budget Commission Meeting Date: February 11, 2025
3 Hetchy will be increasing its use of Fund Balance from $15.6 million to $39.3 million.
• CleanPowerSF revenues are updated to reflect revised
projections in customer account growth and power sales. As a result, net revenues are projected to decrease by $18.9 million, with sales projected to decrease by $30.7 million. This decrease is offset by a $24.0 million decrease in power purchase costs on the uses side. In addition, sales of capacity in the original budget were highly conservative, preparing for a change in regulatory environment. With more certainty in the
marketplace, capacity sales are up by $11.8 million.
CleanPowerSF will be increasing its contribution to Fund Balance from $36.1 million to $40.4 million.
Uses:
The $30,233,308 reduction to the FY 2025- 26 operating budget uses includes:
• $24.0 million reduction to purchase of power in CleanPowerSF due to updated sale projections as mentioned in the previous section.
• $0.9 million increase in purchase of power in Hetch Hetchy Power due to the growth of energy prices and the cost of transmission and distribution.
• $0.5 million increase in Hetch Hetchy Water expenditures to fund critical maintenance for facilities located upcountry. • $1.7 million net increase to Salaries and Fringe Benefits, including:
o $1.0 million in Hetch Hetchy Water, $0.8 million in
CleanPowerSF, and $0.7 million for the Customer
Services Bureau to support projected hiring.
o Other increases include $0.5 million due to changes in MEA salary adjustments based on latest MOUs, and
$0.3 million for COLA adjustments made by the
Controller’s Office.
o This is offset by $0.9 million reduction to the risk
management work order for Hetch Hetchy due to
lower premiums and a reduction of $0.7 million in
non-personnel services from Business Services.
• Lastly, an increase in contributions to Fund Balance in CleanPowerSF makes up the balance.
Capital Revenue Transfers support enterprise pay- go or revenue funded capital of $266,051,442 for FY 2025 -26. The proposed change reflects a $13,624,531 reduction to optimize the mix of debt vs. revenue funding for the capital budget.
Agenda Title: Adopt the Amendment to the FY 2025-26 SFPUC Operating Budget Commission Meeting Date: February 11, 2025
4 They include the following changes:
• A shift in funding source from revenue to debt in Water and Hetch Hetchy Water
• There are minimal changes to Wastewater and Hetch Hetchy Power
Summary of Operating Budget Changes:
Original Final
Operating FY 2025-26 Change FY 2025-26
Water Enterprise $
784,458,242
$
(12,243,939) $ 772,214,303
Wastewater
Enterprise
528,083,728 479,330 528,563,058
Hetch Hetchy
Power
262,744,468 329,432 263,073,900
Hetch Hetchy
Water
118,910,098 101,268 119,011,366
CleanPowerSF
463,274,699 (18,899,399) 444,375,300
Subtotal $2,157,471,235 $ (30,233,308) $
2,127,237,927
External Affairs $
12,036,477
24,318 $
12,060,795
General Manager 39,786,814 (112,847) 39,673,967
Business Services 101,840,179 499,272 102,339,451
Bureau
Recoveries
(153,663,470)
(410,743) (154,074,213)
Infrastructure 111,835,725 71,151 111,906,876
Project
Recoveries,
Infrastructure
(111,835,725) (71,151) (111,906,876)
Total SFPUC $ 2,157,471,235 $ (30,233,308) $ 2,127,237,927 Capital Revenue
Transfer
Original
FY 2025-26
Change Final
FY 2025-26
Water Enterprise $
108,030,176
$
(12,642,606)
$
95,387,570
Wastewater
Enterprise
133,891,216 164,081 134,055,297
Hetch Hetchy
Power
28,465,812 287,423 28,753,235
Hetch Hetchy
Water
8,772,339 (1,433,429) 7,338,910
CleanPowerSF 516,430 - 516,430 Subtotal $ 279,675,973 $
(13,624,531)
$
266,051,442
Adherence to Commission Policies
Agenda Title: Adopt the Amendment to the FY 2025-26 SFPUC Operating Budget Commission Meeting Date: February 11, 2025
5 The proposed budget changes and final proposed budget are aligned with the following relevant policies:
• City and County of San Francisco budget policies and legislation • Capital Financing Policy
• Debt Service Coverage policy
• Fund Balance Reserve policy
• Affordability Policy
• Technology Policy
Budget & Costs:
Total Change Operating Budget*:
FY 2025-26: $2,157,471,235 decrease to $2,127,237,927
Total Change to Capital Revenue Transfer:
FY 2025-26: $279,675,973 decrease to $266,051,442
* Includes Capital Revenue Transfer
Environmental
Review:
This action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines section 15378(b)(4) because adoption of amendments to the Operating Budget involves creation of a government funding mechanism or other fiscal activities and does not involve any commitment to any 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 amendment to the Operating 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).
Attachments: No attachments
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, Under Charter Section 8B.123, the Commission must hold public hearings on an annual basis to review, update, and adopt an Operating Budget for the San Francisco Public Utilities Commission (SFPUC); and
WHEREAS, On February 13, 2024, by Resolution No. 24-0030, the Commission approved the SFPUC Biennial Operating Budget for Fiscal Year (FY) 2024-25 and FY 2025-26, including the revenue transfer for capital, in the amount of $2,023,680,883 for FY 2024-25 and $2,157,471,235 for FY 2025-26; and
WHEREAS, On February 11, 2025, at a duly noticed public meeting, staff presented the proposed mid-cycle amendments to the FY 2025-26 Operating Budget for the SFPUC, including the revenue transfer for capital, with a reduction of $30,233,308, resulting in a total revised FY 2025-26 Operating Budget of $2,127,237,927; and
WHEREAS, On July 30, 2024, the Mayor approved the FY 2025-26 Operating Budget for each Enterprise and Bureau; and
WHEREAS, The SFPUC must submit its mid-cycle changes to the FY 2025-26 Operating Budget for approval by the Mayor and the Board of Supervisors, as provided under Charter Section 9.101; and
WHEREAS, This is action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines section 15378(b)(4) because adoption of amendments to the Operating Budget involves creation of a government funding mechanism or other fiscal activities and does not involve any commitment to any 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 amendment to the Operating 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); now, therefore, be it
RESOLVED, This Commission hereby approves amendments to the FY 2025-26 Operating Budget, including the revenue transfer for capital as follows, and be it:
Original Final
Operating FY 2025-26 Change FY 2025-26
Water Enterprise $ 784,458,242 $ (12,243,939) $ 772,214,303 Wastewater Enterprise 528,083,728 479,330 528,563,058
Hetch Hetchy Power 262,744,468 329,432 263,073,900
Hetch Hetchy Water 118,910,098 101,268 119,011,366
CleanPowerSF 463,274,699 (18,899,399) 444,375,300 Subtotal $2,157,471,235 $ (30,233,308) $ 2,127,237,927 External Affairs $ 12,036,477 24,318 $ 12,060,795 General Manager 39,786,814 (112,847) 39,673,967
Business Services 101,840,179 499,272 102,339,451
Bureau Recoveries (153,663,470) (410,743) (154,074,213) Infrastructure 111,835,725 71,151 111,906,876
Project Recoveries,
Infrastructure (111,835,725) (71,151) (111,906,876) Total SFPUC $ 2,157,471,235 $ (30,233,308) $ 2,127,237,927 Capital Revenue
Transfer
Original
FY 2025-26
Change Final
FY 2025-26
Water Enterprise $ 108,030,176 $ (12,642,606) $ 95,387,570 Wastewater Enterprise 133,891,216 164,081 134,055,297 Hetch Hetchy Power 28,465,812 287,423 28,753,235 Hetch Hetchy Water 8,772,339 (1,433,429) 7,338,910
CleanPowerSF 516,430 - 516,430 Subtotal $ 279,675,973 $ (13,624,531) $ 266,051,442
FURTHER RESOLVED, That this Commission authorizes the General Manager to submit the above referenced mid-cycle amendments to the FY 2025-26 Operating Budget to the Mayor and the Board of Supervisors for approval; and be it
FURTHER RESOLVED, That the General Manager is authorized 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, That the General Manager is authorized to adjust salaries in conformance with amendments to the Annual Salary Ordinance and mandatory fringe benefits as provided in the Controller's instructions; and be it
FURTHER RESOLVED, That the SFPUC proposed budgets shall be filed with the Controller in conformance with the provisions of the San Francisco Charter Article IX and Administrative Code Chapter 3. Copies of the approved budget are on file in the office of Commission Affairs.
I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting of February 11, 2025.
Director of Commission Affairs
San Francisco Public Utilities Commission