CleanPowerSF Sfpuc Commission
September 23, 2025

San Francisco
Water Power Sewer Services of the San Francisco Public Utilities Commission Real Estate Services Division
525 Golden Gate Avenue, 10th Floor
San Francisco, CA 94102
T 415.487.5210
August 27, 2025
Memorandum
To: Kate H. Stacy, President
Joshua Arce, Vice President
Avni Jamdar, Commissioner
Steve Leveroni, Commissioner
Meghan Thurlow, Commissioner
Dennis J. Herrera, General Manager
Through: Ronald Flynn, Deputy General Manager -D
From: Rosanna Russell, Real Estate Director
Attached please find the Annual Real Estate Report.

Daniel L. Lurie
Mayor
Kate H. Stacy
President
Joshua Arce
Vice President
Avnl Jamdar
Commissioner
Steve Leveronl
Commissioner
Meghan Thurlow
Commissioner
Dennis J. Herrera
General Manager
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.

Annual Real Estate Report

San Francisco Public Utilities
Commission

August 26, 2025

2 MISSION
The San Francisco Public Utilities Commission (SFPUC) provides its customers with high -quality, efficient, and reliable water, power, and sewer services in a manner that includes environmental and community interests and that sustains the resources entrusted in its care. The Real Estate Services Division (RES) of the SFPUC furthers this mission by carefully analyzing projects proposed for the real property over which the SFPUC has jurisdiction (SFPUC Property) , issuing and administering rental agreements for SFPUC Property , increasing rental revenue, and selling underutilized SFPUC Property.

RES also serves the three SFPUC enterprises by negotiating real property acquisitions and office and industrial leases for SFPUC operations and SFPUC capital projects and by resolving complex title issues. RES negotiates with third parties who seek to acquire real property interests from the SFPUC.

Finally, RES works with colleagues in other divisions to protect the SFPUC by vetting proposed third -party projects for potential impacts on SFPUC Property and infrastructure. To this end, RES leads the In -City Project Review Team in San Francisco and actively participates in two other Project Review Teams outside the City.

RES does not perform facilities management , which the three enterprises perform.

SFPUC Rental Revenues and Property Taxes
RES staff negotiates new leases, licenses, and memoranda of understanding for the use of SFPUC Property. The SFPUC rental agreement portfolio generates over $ 15 million annually from over 600 agreements. These transactions are subject to a complex project review process by several SFPUC divisions, the City Attorney’s Office, and regulatory agencies. The real estate agreements often require SFPUC Commission and San Francisco Board of Supervisors’ approval. Final agreements for the use of even a small amount of SFPUC Property can take many months to negotiate and approve, particularly when other regulated public agencies are involved. 3 The SFPUC earned $15,001,924.02 in real estate rental revenue during the fiscal year 202 4-2025. Please see the chart attached as Exhibit A for a breakdown of the revenue by enterprise.

The SFPUC paid $2,828,327.52 in property taxes and assessments across the seven counties in which the SFPUC operates. Please see the chart attached as Exhibit C for a breakdown of taxes paid per county.

SFPUC rental agreements require tenants and licensees to reimburse the SFPUC for their pro rata share of property taxes and assessments paid by the SFPUC in proportion to the square footage of the SFPUC parcels they occupy. The SFPUC recouped $230,007.83 in property taxes and assessment reimbursements from its tenants and licensees in the past fiscal year.

SFPUC RENTAL EXPENDITURES
The SFPUC is both a landlord and a tenant. The SFPUC is currently a tenant under 38 leases, licenses, and Memoranda of Understanding (MOU s) with the Port of San Francisco (Port); however, it is a rent -paying tenant only under 21 of these agreements. The rental agreements allow for a variety of SFPUC uses , including construction staging, storage, vehicle parking, and equipment and materials storage; additional office space for staff; the installation and operation of water, power, and sewer infrastructure; and the operation of SFPUC telecommunications equipment.

The SFPUC’s base rent expenditures as a tenant increased from $ the for 6,844,053to $ 24-2320 the fiscal yearfor 6,330,017.23 any utilities, the cost of Base rent does not include . 2025-2024 fiscal year may be required enterprises insurance, taxes, or other fees that the SFPUC the summarizing Dto pay under each agreement. Please see Exhibit paid base rent during the tenant and the agreements where the SFPUC is . 2025-2024fiscal year the
Other notable changes and updates where the SFPUC is a tenant include the following new and extended agreements:

4 New Agreements:
• 1900 Oakdale Avenue, San Francisco : This market-rent warehouse lease for the Wastewater Enterprise
commenced on July 15, 2024.
• Port MOU (M-17129) for the Pier 19 Shed: This three-year agreement commenced on October 14, 2024 , and allows
the SFPUC to store supplies for new Power Enterprise
projects.
• 19500 Nugget Boulevard, Sonora: This market -rent
warehouse lease and yard for the Hetch Hetchy Water and Power Division commenced on September 1, 2024.
• Note: A new three-year office lease for the Hetch Hetch y Water and Power Division outside Sacramento will
commence in September 2025.

Extension of Existing Agreements:
• Crane Ridge, Alameda County. The term of this license for a Water Enterprise radio communications facility was
extended four years through March 31, 2029.
• Sunol Ridge, Alameda County. The term of this license for a Water Enterprise radio communication s facility was
extended four years through March 31, 2029.
• 150 Executive Park, San Francisco. The term of this lease for the SFPUC Contractor Assistance Center use was
extended through January 31, 2030.
• Mt. Allison, Alameda County . The term of this lease for a Water Enterprise radio communication s facility was
extended five years through April 30, 2030.

5 KEY REAL ESTATE INITIATIVES
525 GOLDEN GATE AVENUE CHILDCARE CENTER LEASE

525 Golden Gate Childcare Center
The SFPUC leases space on the ground floor of its headquarters at 525 Golden Avenue in San Francisco (SFPUC Headquarters) to a childcare center operator. The SFPUC childcare center (Childcare Center) has approximately 2,551 square feet of licensable program area and approximately 1,652 square feet of fenced outdoor play area fronting Redwood Street. The Childcare Center has space for up to 75 children, including infants, toddlers, and preschoolers.

After a Request for Proposals was issued in July of 2024, the SFPUC received five proposals. The SFPUC issued a lease dated October 28, 2024 , to the highest scoring proposer and prior tenant , C5 Children’s School (C5), to operate the Childcare Center . Under the new lease, C5 pay s rent at the annual rental rate of $1 per year for an initial five -year term and one four - year option term.

This lease expires on December 31, 2030.

The C5 lease , among other things, requires C5 to prioritize serving the children of SFPUC employees, the children of other City employees, and the children of the community surrounding the SFPUC Headquarters , which includes the 94102 (Tenderloin) and 94103 (South of Market) zip codes.

Most of the census tracts within these two zip codes are considered either disadvantaged or environmental justice communities according to

6 demographic and environmental data presented in local1, state2, and federal3 screening tools, and should be prioritized accordingly.

SOUTHEAST COMMUNITY CENTER AT 1550 EVANS AVENUE

Southeast Community Center Office Space

1 Environmental Justice Communities Map, SF Planning,
https://generalplan.sfplanning.org/images/environmental-justice- framework/Environmental_Justice_Communities-Map.pdf
2 CalEnviroScreen 4.0, California Environmental Protection Agency's Office of Environmental Health Hazard Assessment,
https://experience.arcgis.com/experience/11d2f52282a54ceebcac7428e6184203/p age/CalEnviroScreen-4_0/
3 Climate and Economic Justice Screening Tool, White House Council on Environmental Quality, https://screeningtool.geoplatform.gov/en/#3/33.47/-97.5

7 The SFPUC operates the Southeast Community Center (SECC), located at 1550 Evans Avenue in San Francisco, provid es reservable event spaces, non-profit office space and workstation desks, open space, an on -site café, and a childcare center.

RES has been working with Community Benefits Division staff to issue a new Request for Proposals for non -profit entities to use desk space and meeting rooms on the third floor . These entities will be required to deliver high - impact education, job training, or senior programming to the Bayview - Hunters Point community and the broader San Francisco community.

In 2024, RES extended the existing workstation licenses until the SFPUC can issue new licenses to the highest proposers responding to the RFP.

FINAL TRANSFER OF FRANCISCO RESERVOIR
In 2014, the SFPUC entered an MOU with the San Francisco Recreation and Parks Department (RPD) for the conditional transfer of the Francisco Reservoir to RPD. The SFPUC tendered possession of the approximately 4.5- acre site to RPD on September 30, 2014. The MOU requires RPD to make annual transfer payments over 12 years to the SFPUC. RES calculates periodic interest on and monitors the transfer payments.

Under the MOU, t he final transfer of the Francisco Reservoir will occur this September after RPD completes payment of the sum of $9,900,000 in installments plus interest over 12 years to the SFPUC . To date, RPD has paid the SFPUC the sum of $9,140,708.44, representing $8,108,837.10 in principal and $1,031,871.34 in intere st. An additional $1, 857,077.69 is due to the SFPUC on or before September 30, 2025.

8 Here is an image of the beautiful Francisco Park on the former reservoir site:

Francisco Park

SALE OF REAL PROPERTY INTERESTS FOR STATE HIGHWAY

IMPROVEMENTS
Caltrans – Stanislaus County North County Corridor Project The California Department of Transportation (Caltrans) and various counties frequently target SFPUC Property for road improvement projects. These entities seek to acquire easements and small areas of SFPUC Property to widen bridges and roads and install other road improvements. Sometimes, Caltrans and a county public works department will join their efforts to accomplish a road improvement project.

Highway improvement projects are generally complex. RES vets the projects to ensure their compliance with SFPUC policies, and to negotiate purchase

9 and sale agreements and easements , and ancillary agreements, such as temporary licenses and cost-sharing agreements for the relocation of SFPUC water transmission pipelines.

One such project is the ongoing Stanislaus County - Caltrans North County Corridor Project – Phase 1 State Route 108 Expressway Project.

This is a high -priority project for Stanislaus County to build a west -east expressway to improve regional circulation. The project seeks to connect State Route 219 near Modesto to State Route 120 near the Town of Oakdale.

Stanislaus County and Caltrans have completed their environmental review for the project. The proposed expressway alignment crosses the SFPUC Property at two locations during two different phases of the project. The current phase (phase 1) will require widening Oakdale Road over SFPUC Property, a section of the Right of Way designated as SFPUC Parcel Numbers 647 and 648, to support an anticipated increase in vehicular traffic.

RES issued and delivered the fully executed revocable license to Stanislaus County in March 2024 so that the road widening project can commence while the purchase and sale of the easement is completed. RES also sent the draft purchase and sale agreement and deed for the road easement to Stanislaus County for review in March 2024. RES staff continue to check in with Stanislaus County for its review and comment on the draft purchase and sale agreement and deed.

Caltrans Arroyo de la Laguna Bridge Rehabilitation Project A second Caltrans project on which RES is the Arroyo de la Laguna Bridge Rehabilitation Project in Sunol.

The project seeks to replace the existing 310 -foot-long Arroyo de la Laguna Bridge on State Route 84 in Alameda County with a new bridge. Caltrans seeks to acquire an approximately 16,488 -square-foot strip of SFPUC Parcel 65 for its new bridge and roadway improvements. Additionally, Caltrans requires the temporary use of approximately 114,043 square feet of SFPUC Parcel 65 adjacent to the Caltrans right -of-way for construction staging, and another 84,992 square feet for temporary monitoring and maintenance of restored vegetation in the areas impacted by the project.

10 RES issued and delivered three fully executed licenses to Caltrans in June 2025 so that the project can commence while the purchase and sale of the property is completed.

SALE OF PARCEL 9 IN SAN BRUNO
The SFPUC sold one remnant parcel of the former Old Muni Right of Way to the City of San Bruno.

In 1944, the City acquired the Market Street Railway Company, an old railway line running from San Francisco to Burlingame. Caltrain and BART later acquired most of these railroads right of way parcels through condemnation or purchase to install their surface and subsurface infrastructure.

The City, through the SFPUC , still owns remnant non -contiguous parcels of the former railroad right of way (Old Muni Right of Way) in San Mateo County. The Old Muni Right of Way has long been on the SFPUC’s list of underutilized properties, meaning that the parcels do not have a utility use for the SFPUC. The SFPUC rents the use of the remaining Old Muni Right of Way parcels to various third parties for street improvements, pedestrian pathways, and other uses.

In 1999, the SFPUC issued a Revocable Permit to San Bruno (San Bruno) .

Under the Permit, San Bruno uses four parcels of the Old Muni Right of Way, including the 50-foot-wide Parcel No. 9, to maintain a roadway, landscaping, and underground utility facilities on Huntington Avenue in San Bruno. The SFPUC does not maintain any infrastructure in Parcel No. 9.

11 Schematic of New Bicycle Track to be installed on Parcel No. 9 Since 2021, San Bruno has sought to construct a two -way bicycle track on Parcel No. 9, among other parcels owned by other parties ( San Bruno Project). The San Bruno Project would narrow the existing roadway median and vehicle travel lanes on Huntington Avenue between Forest Avenue and San Bruno Avenue on Parcel No. 9 to accommodate the construction of the bicycle track while also maintaining a pedestrian sidewalk along the northbound direction of the roadway.

On July 9, 2024, the San Bruno City Council approved the purchase of Parcel No. 9 for the appraised fair market $5,000 value.

After t he SFPUC Commission approved the transaction , the Board of Supervisors approved and authorized the sale to the City of San Bruno under Resolution No. 064-25 dated February 25, 2025. On February 28, 2025, the Mayor executed Resolution No. 064 -25, which, among other things, authorized the SFPUC General Manager to execute the Purchase and Sale Agreement and for the City’s Director of Property to execute the Quitclaim Deed to effectuate the sale of Parcel No. 9 to the City of San Bruno. The executed Quitclaim Deed was recorded on April 8, 2025, in the Official Records of the County of San Mateo.

12 PENDING SALE OF PARCEL 21 IN SOUTH SAN FRANCISCO
RES is currently working with the City of South San Francisco to convey a remnant of the former Spring Valley Water Company Parcel 21 in South San Francisco to facilitate the City of South San Francisco’s Civic Campus Project.

This Parcel 21 remnant never contained any SFPUC utility infrastructure .

The City of South San Francisco has historically used Parcel 21 as components of the public streets known as Mission Road and Antoinette Lane under a SFPUC revocable license. The City of South San Francisco seeks to purchase the property so that it may have full control of its road infrastructure and all future improvements.

The SFPUC Commission and the San Francisco Board of Supervisors approved the sale of Parcel 21 to South San Francisco for the appraised fair market value of $132,000. The City of South San Francisco is seeking approval for this transaction from its City Council in late August 2025 , and RES anticipates completing the sale immediately thereafter.

13 INITIATIVES WITH PUBLIC AGENCIES AND UNIVERSIT IES
Many older revocable permits issued by the SFPUC for public agency use of SFPUC Property were issued years ago and are both factually and legally outdated. They often fail to document all current public agency uses of SFPUC Property. In addition, these older permits lack the modern engineering restrictions, environmental protections, and indemnity and insurance requirements found in current SFPUC real estate agreements.

RES works on an ongoing basis to issue modern revocable licenses to replace these outdated agreements. Negotiations are lengthy, often taking years to enter into executed agreements.

Similarly, the SFPUC is also working with Stanford University to document all of its current uses on SFPUC Property. Additionally, the SFPUC has an undocumented use of Stanford property, and the parties are actively negotiating a Reciprocal Use Agreement as described below.

RES continues to work on the following projects:

CITY OF BURLINGAME
The SFPUC owns the former Muni Right of Way parcels in Burlingame. In 1962, the SFPUC issued a revocable permit to the City of Burlingame to maintain a portion of California Drive, and the installation of public street parking, and landscaping within the SFPUC Property.

In 1990, the SFPUC issued an updated lease to the City of Burlingame for the continued use of the SFPUC Property for street purposes, parking, and landscaping. In 1995, the SFPUC terminated the lease due to an unauthorized sublease for parking by Burlingame. Despite the terminated lease, the City of Burlingame continued to use the SFPUC Property without a lease due to the parcel’s use as a roadway. Since then, the SFPUC has conducted many discussions with the City of Burlingame regarding entering into a new license.

The SFPUC authorized a new license in 2023 to the City of Burlingame to renew its use of a portion of the SFPUC Property for a roadway, parking, and landscaping. The SFPUC is actively engaging in further discussions to issue Burlingame a new license for the unlicensed parking lot and roadway, and

14 street improvements consisting of a new bicycle path within the other portions of the SFPUC Property used by the City of Burlingame.

CITY OF SUNNYVALE
RES continues to negotiate with the City of Sunnyvale to replace eight outdated agreements issued by the SFPUC between 1976 and 2004 with two new licenses allowing the use of portions of SFPUC Property for various public uses , including a pedestrian trail on SFPUC Property in Sunnyvale.

RES had been in a multi -year discussion with the City of Sunnyvale to remove unpermitted encroachments on top of the SFPUC pipelines before the issuance of the new licenses. The City of Sunnyvale removed the encroachments on January 22, 2024.

The new licenses will also require the City of Sunnyvale to install and maintain six SFPUC signs at various locations of the SFPUC Property to educate users about the Hetch Hetchy Regional Water System and the importance that the Right of Way plays in the transmission of water.

CITY OF DALY CITY
The SFPUC and the City of Daly City continue to work together to implement the complex Vista Grande Drainage Basin Improvement Project to divert stormwater from the Vista Grande Watershed to Lake Merced. The project would address storm -related flooding in the Vista Grande Drainage Basin in the northwest portion of Daly City and unincorporated San Mateo County.

The project would benefit the SFPUC by augmenting water levels in Lake Merced by reconnecting a significant portion of the Lake Merced watershed to Lake Merced. RES is working with the City of Daly City to assign the SFPUC’s interest in the existing easement for its Vista Grande Tunnel to the City of Daly City and convey easements to the City of Daly City for the installation and operation of new and existing infrastructure.

STANFORD JUNIOR UNIVERSITY

The SFPUC and Stanford University have a history dating back to 1952 regarding the use of each other’s land. The SFPUC property bisects a portion of the Stanford property , and the SFPUC does not have a recorded right of access to the SFPUC Property from a public road. In 2019, Stanford proposed a paving project over a portion of the SFPUC Property for use as a

15 multi-use path for pedestrians and vehicles. The SFPUC and Stanford worked together to analyze the parties’ respective land rights for this path . This analysis determined that Stanford does not have a written authorization to maintain the path on SFPUC Property. As a result, the SFPUC and Stanford agreed to document each other’s access in a Reciprocal Use Agreement.

RES is actively negotiating the terms of the Reciprocal Use Agreement.

COLORADO STATE UNIVERSITY SYSTEM
In 2025, the SFPUC issued a License to Enter and Use Property to the Board of Governors of the Colorado State University System for the installation of an Advanced Quantitative Precipitation Information (AQPI) system on SFPUC Property on Sawyer Ridge in the Peninsula Watershed. The Sawyer Ridge AQPI system will be a component in the Regional AQPI Program, in collaboration with the National Oceanic and Atmospheric Administration’s Earth Science Research Laboratory, U.S. Geological Survey, Colorado State University’s Cooperative Institute for Research in the Atmosphere, and local water and flood control agencies. The Sawyer Ridge AQPI system is one of at least five AQPI radar systems being installed throughout the San Francisco Bay Area by different local water and flood control agencies as part of this regional effort.

The goal of the Regional AQPI Program is to (1) collect atmospheric data in real time, and to use the data to generate rainfall forecasts with improved spatial, temporal, and volumetric accuracy, (2) use the improved forecasts in conjunction with the SFPUC Water Enterprise hydraulic model to better manage SFPUC infrastructure, and (3) maintain and protect the City’s critical infrastructure, by providing communications to ensure that operations and maintenance proceed uninterrupted during emergencies.

The radar equipment p urchase is funded by a California Department of Water Resources grant under Proposition 84. Sonoma Water administers the grant.

16 WASTEWATER EASEMENT RECOVERY PROJECT

Easement Recovery Project Subdivision Map
The SFPUC’s Wastewater Enterprise operates and maintains its sewer assets within public streets and easements through privately owned land in San Francisco. For the past few years, RES has worked on the Easement Recovery Project, which is an organized effort to proactively locate and catalog sewer easements throughout San Francisco. In 2024, RES completed its review of all 317 dedication maps for references to historic easements.

RES continues to work to find additional missing information, classify available easement records, and document newer easements in the SFPUC’s geographic information system (GIS).

REMAINING UNDERUTILIZED PROPERTY
The SFPUC has the following remaining underutilized parcels: (1) two Manzano Way lots in Sunnyvale; (2) the Niles Reservoir and cottage in Fremont; (3) the remaining Old Muni Right of Way parcels in Burlingame ; and (4) the SFPUC owns former Hetch Hetchy Railroad right-of-way way parcels in Tuolumne County. RES continues its efforts to sell these underutilized parcels. The disposition of any property serving no present or future utility purpose eliminates operational and maintenance costs as well as unforeseen capital expenditures that arise due to continued ownership.

17 Please see the discussion below regarding the potential sale of the former Hetch Hetchy Railroad parcels.

NILES RESERVOIR PROPERTY

Niles Reservoir
The Niles Reservoir property in Fremont consists of two parcels containing a residential structure, a shed, a garage, and utilities as follows:
• The Niles Reservoir site at 38240 Canyon Heights Drive is a partially-improved, approximately 7.45-acre site. The site contains an approximately 60,000 square-foot, inactive concrete reservoir with infrastructure and utility appurtenances; and
• The cottage site at 38234 Canyon Heights Drive is an approximately 21,209-square-foot site improved by a vacant residential structure.

The SFPUC refers to both sites together as the “Niles Reservoir.” In 2016, the SFPUC , through a broker, advertised and issued invitations to bid on the purchase of the Niles Reservoir. In November 2016, RES staff

18 pursued a purchase and sale contract with the highest bidder , a property developer, but d ue to an anti -growth movement in Fremont, however, the bidder withdrew from the contract in January 2018 , and the other bidders also declined to pursue a purchase and sale contract.

RES staff will resume efforts to sell the Niles Reservoir and the Old Muni Right of Way when there is a more constant economic climate for property development.

RES PARTICIPATION IN SFPUC CAPITAL PROJECTS
RES staff acquires real estate rights for many Capital Improvement Program projects implemented mostly through the SFPUC’s Project Management Bureau. These capital projects are varied and include projects under the Water System Improvement Program, the Sewer System Improvement Program, the Water and Wastewater Enterprise Renewal and Replacement Programs, and other capital programs requiring right -of-way acquisition work.

RES support includes conducting extensive research and analysis of parcel ownership, providing input and feedback during the project planning and design phases, providing maps and drawings, coordinating with property owners and other public agencies and City departments, working with adjacent property owners to remove encroaching structures and vegetation before beginning project work, acquiring land rights from private propert y owners, negotiating agreements for temporary laydown and construction staging areas on third -party land , and negotiating, drafting, and seeking approval for various agreements.

CURRENT SFPUC CAPITAL PROJECTS
RES actively participates in the development of new capital projects during the alternatives analysis, conceptual engineering, and design phases, identifying potential right -of-way issues and needs, and providing opportunities to design around them at early stages, where possible. RES works closely with the Project Management Bureau to assess alternatives, identify right-of-way issues, and plan acquisition strategies. RES supports

19 the Project Management Bureau in drafting alternative analysis reports , scoring alternatives, and selecting project alternatives and alignments for further development.

RES also participates in Technical Steering Committee meetings, presenting information to senior staff and fielding questions to aid the committee’s consideration of a project at certain key milestones and to determine whether project development should move forward.

After a project is designed and approved, right -of-way acquisition begins.

RES performs all work related to the property acquisition, including obtaining title reports, preparing legal descriptions and plat maps, ordering, and obtaining appraisals, drafting purchase agreements and deeds, preparing government code offer packages, meeting with property owners to make offers, negotiating offers, obtaining SFPUC Commission and Board of Supervisors’ approval, and coordinating and closing escrow.

MOCCASIN PENSTOCKS REHABILITATION PROJECT
RES continues to work with the Project Management Bureau to evaluate alternatives for the Moccasin Penstocks Rehabilitation Project. The existing alignment of the SFPUC penstocks 4 crosses National Park Service land under the jurisdiction of the United States Bureau of Land Management, as well as private property. RES performed an extensive analysis of the required authorizations and property rights for each alternative and wrote the relevant sections for the alternative analysis report. RES then assisted the SFPUC’s Project Management Bureau in identifying and recruiting panelists with right-of-way subject matter expertise and led the effort to score each alternative according to its complexity and feasibility. An alignment was selected and presented to the Technical Steering Committee (TSC). The TSC found that deeper analyses should be conducted, and the project team went back to the drawing board.

FOLSOM AREA STORMWATER IMPROVEMENT PROJECT

4 A penstock is a sluice or gate or intake structure that controls water flow, or an enclosed pipe that delivers water to hydro turbines and sewerage systems. The term is inherited from the earlier technology of mill ponds and watermills.

20 The SFPUC Folsom Area Stormwater Improvement Project relies on the acquisition of subsurface tunnel easements across three privately owned commercial parcels. The easements would also restrict the development of the parcels within a certain area around the proposed tunnel structure. Two of the three parcels contain large buildings with potential plans for future development that could be impacted by the easements.

RES worked with an appraiser and the property owners to assess the current use of the parcels and obtained appraisals for the value of the proposed easements. Upon receipt of the appraisal reports, RES drafted and compiled the necessary offer documents for government code offers and met with each property owner individually to present and discuss the offers. RES negotiated with the three property owners through a series of counteroffers and in-person meetings to settle for compensation and the City is currently working with each property owner’s attorney to finalize the purchase and sale agreements and easement deeds before seeking SFPUC Commission and San Francisco Board of Supervisors approval of the transactions.

Additionally, this project will impact accessibility to certain properties during construction. The SFPUC engaged a right -of-way consultant, under a professional services contract, with experience in relocation assistance and loss of business goodwill , to assist in working with impacted property owners.

SFPUC USE OF OTHER CITY LAND
Many proposed or active capital projects involve the use of land under the jurisdiction of other City departments. Other City projects incorporate former City streets in which the SFPUC maintains infrastructure.

Here is a recent example where RES and Wastewater En terprise staff are negotiating with the San Francisco Fire Department (SFFD) and the San Francisco Public Works Department (Public Work) to protect the SFPUC’s access to and use of its sewer facilities in the in the Bayview.

The SFFD is developing a new fire training facility on approximately eight acres of real property under the SFFD’s jurisdiction (SFFD Property) located at 1236 Carroll Avenue in San Francisco (SFFD Project).

21 Within the SFFD Property, there are current paper streets in which the SFPUC accesses, owns, and maintains (i) an 18 -foot-wide subsurface box culvert located within a 35 -foot-wide service area in Hawes Street and Bancroft Avenue; (ii) a two -foot-six-inch (2’6) by three-foot-nine inch (3’9) subsurface sewer main located within a 25 -foot-wide service area in and adjacent to Griffith Street; (iii) one communication line in Hawes Street and Bancroft Avenue; and (iv) manholes and catch basins.

The SFFD and Public Works seek to vacate portions of these paper streets to incorporate the vacated portions into the SFFD Property for the SFFD Project. They plan to install a permanent access road and parking lot on the surface of the vacated streets.

RES and the Wastewater Enterprise continue to negotiate an MOU that would add protective measures to address the effect of the anticipated loading of heavy vehicles and equipment on the vacated portions of the former public streets and protect the SFPUC facilities in this area.

The construction of the fire training facility is anticipated to begin soon, with anticipated completion by 2028.

SFPUC USE OF FEDERAL LAND
Many SFPUC capital projects, including the Ocean Beach Climate Change Adaptation Project and the Seacliff 1 Pump Station and Force Main Upgrade Project, involve the use of federal lands under the jurisdiction of the National Park Service, through its Golden Gate National Recreation Area (Park Service).

RES works with the Park Service to review and provide feedback during the design phases of a SFPUC project and obtains the necessary right -of-way authorizations for project elements within Park Service lands. This year, RES and the Project Management Bureau have been working toward right - of-way agreements that would allow the SFPUC to construct project elements of both the Ocean Beach Climate Change Adaptation Project and the Seacliff 1 Pump Station and Force Main Upgrade Project on Park Service lands at South Ocean Beach and China Beach, respectively.

The key capital projects in which RES is participating are described in the attached Project Appendix.

22 HETCH HETCHY WATER AND P OWER DIVISION PROJECT S

Moccasin Reservoir
The SFPUC’s Hetch Hetchy Water and Power (HHWP) Division reviews a diverse array of SFPUC and third -party projects that range from smaller projects, such as irrigation line installations and the planting of row crops, to larger-scale projects, such as highway expansions and utility relocations, that require significantly more RES involvement. HHWP projects often involve significant coordination with multiple government agencies at the federal, state, and/or local levels. When a project proposal involves coordination with additional government agency stakeholders, each government agency may have to conduct its own review of the project, issue its own authorization agreement (e.g., a permit), and/or participate in the real estate negotiations with the SFPUC. This additional coordination may add additional time to complete the Project Review and approval processes.

The HHWP and RES Divisions continue to coordinate to streamline and improve the HHWP Project Review process.

Please see the Project Appendix for a list of current Hetch Hetchy Water and Power projects.

23 PROTECTION OF SFPUC INFRASTRUCTURE AND LANDS

Right of Way and Third-Party Projects
City staff continues to handle a large influx of proposed real estate development projects impacting SFPUC Property and utilities. RES staff work with colleagues in other divisions to protect SFPUC Property by vetting proposed third-party projects for potential negative impacts on the SFPUC’s access to and use of the Right of Way. To this end, RES leads the In -City Project Review Team in San Francisco and participates with the Bay Area Project Review team and the Hetch Hetchy Water and Power Project Review team. The purpose of these committees is to vet proposed third -party uses for conflicts with SFPUC infrastructure and for conformance with SFPUC policies, of which the foremost policy is that the primary purpose of SFPUC Property is for its utility use.

Throughout the Bay Area and in more distant areas such as the City of Modesto, owners of the property adjacent to the Right of Way are redeveloping their adjacent property with denser uses. The third parties include savvy high -net-worth real estate developers and public agencies , and their consultants. They are replacing adjacent low -density shopping centers, small office building centers, and once industrial and agricultural lands with high -density uses, such as mixed housing/office projects and large residential subdivisions. In addition, w ith recent legislation in the State Assembly supporting increased housing development, more and more accessory dwelling units are being installed, often with little setback from the Right of Way boundaries.

SFPUC staff regularly review public notices y to learn about third -party projects and then contact the project sponsor to try to offer early comments.

Staff requests that the project sponsor present their projects before one of the Project Review Committees before proceeding with their projects.

Despite these staff's efforts, third parties routinely proceed to plan the use of the Right of Way in their projects without attempting to comply with SFPUC policies regarding the use of the Right of Way. Here are some examples:
• Third parties often put SFPUC Property in their public presentations for

24 development proposals and CEQA documents without first obtaining SFPUC comments or consent. Often, their proposed uses conflict with SFPUC infrastructure and SFPUC land use and engineering policies. • Real Estate d evelopers routinely include the Right of Way in their subdivision maps even though the City, through the SFPUC, owns this land. They plan roads, utilities, art installations, and recreational uses, benefitting their adjoining properties on the Right of Way. They sometimes seek to construct buildings close to property boundaries that not only affect the SFPUC’s ability to access its utilities (especially its overhead powerlines), but also make it impossible for the walls and windows of these new buildings adjacent to the property boundary to be maintained without accessing SFPUC property.
• Public agencies plan parallel roads, other transit corridors like express bus lanes, utility installations, and recreational uses of the Right of Way without SFPUC input. T hree communities recently developed recreational plans over miles of the Right of Way without first notifying the SFPUC or obtaining the SFPUC’s comments and without regard for the SFPUC’s utility installations or existing agreements with other parties to use the Right of Way.
• Public agencies often apply for grant funding for a particular use on the Right of Way without the SFPUC's knowledge or input, and then pressure SFPUC staff to approve the use because of grant deadlines. • Adjacent schools plan permanent uses like emergency access lanes and playgrounds on the Right of Way.
• Some Bay Area and Central Valley governments have changed, or tried to change, the zoning of SFPUC right -of-way parcels to “open space” with little or insufficient notice to the SFPUC. This effort complicates SFPUC operations and interferes with some existing SFPUC leases for other uses, particularly in jurisdictions with strict time limits for existing, nonconforming uses (e.g., a time limit for land uses, other than open space uses, to exist on the parcel).

RES works with other SFPUC staff to respond to all such proposals and protect the SFPUC’s interests.

25 THIRD-PARTY PROJECTS AND DEVELOPMENT WITHIN SAN

FRANCISCO

IN-CITY PROJECT REVIEW COMMITTEE
RES leads and manages the In -City Project Review Committee. This committee reviews project proposals initiated by third parties and other City departments that affect SFPUC infrastructure or use SFPUC Property located within the City and County of San Francisco.

The committee also reviews tentative subdivision maps, street and easement vacations, and sidewalk changes when requested by the San Francisco Public Works Bureau of Street -Use and Mapping. The committee meets on a bi - weekly basis to discuss the impact of the projects and their feasibility. RES staff review and comment on all projects and solicit input from other SFPUC enterprises in order to issue a single consolidated comment letter on behalf of the SFPUC for the proposed work.

In the past year, RES analyzed and commented upon 24 proposed projects at the following locations in San Francisco:
700 Font Boulevard
189 Magnolia Street
827-935 Golden Gate Avenue1701 Jerrold Avenue
967 Mission Street
1101-1123 Sutter Street
550 O’Farrell Street
3501 Cesar Chavez Street
618 San Jose Avenue
2420-2422 3rd Street
19th Avenue between Holloway Avenue and Lincoln Way

26 1687 Market Street
Crocker Amazon PG&E Pole Replacement
1450 Owens Street
1239 Jones Street
562 28th Avenue
700 Innes Avenue – India Basin Flats
Bancroft Avenue
I-280 Ocean Avenue Interchange
400 Divisadero Street
Lake Merced Well Station

THIRD-PARTY PROJECTS AND DEVELOPMENT OUTSIDE OF

SAN FRANCISCO

BAY AREA PROJECT REVIEW COMMITTEE
RES collaborates with SFPUC colleagues in several divisions to protect SFPUC assets outside of San Francisco. Through the SFPUC’s formal Project Review process, SFPUC staff review proposals for secondary uses of SFPUC Property in Alameda, Santa Clara, and San Mateo Counties. Staff from the Water Enterprise’s Natural Resources Land Management Division, Water Supply and Treatment Division, and RES determine whether a proposal is compatible with City and SFPUC-adopted plans and policies.

Consistent with the Land Use Framework approved by the SFPUC’s Commission via Resolution No. 12-0042 on March 13, 2012, the SFPUC may permit a secondary use on the SFPUC right -of-way only if it benefits the SFPUC, is consistent with the SFPUC’s mission and policies, and does not in any way interfere with, endanger, or damage the SFPUC’s current or future

27 operations, security, or facilities. No secondary use of SFPUC Property is permitted without the SFPUC’s written consent.

As the land adjacent to the SFPUC Right of Way in the Bay Area continues to be redeveloped for denser suburban and urban uses, vacant space has grown more limited. Private parties and public agencies increasingly seek to use the SFPUC Property for various uses. Real property appraisals show that SFPUC Property usually increases in value because of these project proposals. The owners of adjacent redeveloped private parcels seeking to use SFPUC Property often display significant resistance to RES’s efforts to meet the SFPUC’s obligation to charge fair market value. RES staff often spend time negotiating rental rates for new real estate agreements and addressing project-specific issues to protect SFPUC interests.

The above photo shows a simulation of the new bridge crossing at Arroyo de la Laguna in Sunol.

As an active participant in the Project Review process, RES reviews each application, analyzes any existing land rights in the proposed project area, and determines the appropriate real estate agreement to authorize the proposed third-party use on SFPUC property (lease, license, consent letter,

28 or in very rare cases, an agreement for the purchase and sale of easements or SFPUC Property).

RES analyzed and provided comments for 78 projects during the Bay Area Project Review process during fiscal year 2024-2025. Of those 78 projects, RES reviewed and commented on (i) 23 projects from public agencies; (ii) eight private-party projects; (iii) seven communications and (non-PG&E) utility installation projects; (iv) 25 PG&E projects; and (v) 15 internal SFPUC projects.

Many of the projects presented to the Project Review Committee are complex projects requiring several rounds of review by SFPUC staff and revisions by the project sponsor before the proposal is approved by the SFPUC through a fully executed real estate agreement. These projects start the Project Review process in one fiscal year but may receive approval through a fully executed real estate agreement in the subsequent fiscal year.

Of the 78 projects RES analyzed in fiscal year 2024-2025, nine real estate agreements were fully executed and delivered to the project sponsors requesting the use of SFPUC Property. The remaining active projects continue to move through the Project Review process and, assuming the projects are recommended for approval, may be approved in the next fiscal year.

In addition to the Project Review process, RES receives project review applications for minor work that does not require the formal Project Review committee to meet and confer. Such projects typically are less complex with low risk of impacts to SFPUC assets and include proposed fiber optic line installations, construction parking and/or staging, surface road work, and basic improvements to existing recreational uses. RES analyzed 16 projects that did not require their project sponsors to participate in the formal Project Review process in the fiscal year 2024-2025.

RES analyzed a total of 94 Bay Area projects in the fiscal year 2024 - 2025.

29 SFPUC PROPERTY BISECTING LEVI’S STADIUM PARKING LOT
The SFPUC owns approximately four acres of real property designated as SFPUC Parcel No. 142 in Santa Clara . SFPUC Parcel No. 142 bisects a portion of the main parking lot at Levi’s Stadium . The City of Santa Clara owns the land on one side of SFPUC Parcel No. 142 , and land developer Prologis owns the other side.

The SFPUC’s primary use of SFPUC Parcel No. 142 is to access and operate its water transmission pipelines. T he California Great America tenant has historically used the surface use to support its parking, landscaping, and access needs. The current theme park tenant is Six Flags, which occupies Parcel No. 142 for parking and other uses on a month -to-month holdover basis under an expired lease between the SFPUC and the original theme park tenant.

The SFPUC is evaluating its options regarding the future use of Parcel No. 142 in preparation for larger upcoming regional events, such as the Super Bowl, the World Cup, and ongoing Levi’s Stadium concerts and activities.

30 PACIFIC GAS AND ELECTRIC COMPANY PROJECTS

The above photo shows PG&E’s concrete erosion control mat protecting PG&E's gas line L-303 across Alameda Creek in Sunol.

As part of its ongoing plan to implement projects and accommodate new, more stringent safety and performance requirements in the wake of the Northern California wildfires, the Pacific Gas and Electric Company ( PG&E) continues to request SFPUC approval for a variety of projects. These projects include (i) vegetation management initiatives related to power transmission and gas distribution; (ii) gas pipeline inspection, replacement, installation, and retirement projects; and (iii) electric transmission and distribution line inspection, pole and tower repair, and replacement, and reconductoring projects.

31 In the past fiscal year, the SFPUC , through RES, issued 21 agreements (revocable licenses, work authorization letters, and consent letters) for new and existing PG&E projects.

PG&E’s ongoing annual vegetation management projects have become short-term, small -scale vegetation maintenance (pruning) activities along roads and existing access routes. The SFPUC reviews PG&E’s vegetation maintenance activities through the Project Review process, but PG&E vegetation maintenance usually proceeds under a short -term access permit issued by the Natural Resources and Lands Management Division when appropriate.

SFPUC and PG&E staff continue to meet regularly to discuss pending and new projects and make process improvements to accommodate PG&E’s critical work.

A list of real estate agreements the SFPUC issued to PG&E in fiscal year 2024-2025 is attached as Exhibit D.

OTHER KEY INITIATIVES

BISECTED PARCEL PERMITS
In certain areas of San Mateo and Alameda Counties, the SFPUC Property bisects adjacent parcels. These adjacent parcels have limited access and utility, and in some cases, would be landlocked, without the authorization to use the SFPUC Property.

A SFPUC Bisected Parcel Permit allows an adjacent residential property owner (each, a Permittee) access to and use of a portion of the adjoining SFPUC Property as part of the Permittee’s yard or driveway.

32 An aerial GIS image of SFPUC Property bisecting adjacent properties in Menlo Park The SFPUC issues Bisected Parcel Permits to adjacent residential property owners for a five -year renewable term. The Permittee must pay an annual fee of $125, retain sufficient insurance indemnifying the City, and maintain the permitted portion of the SFPUC Property. RES manages 100 active fee- based Bisected Parcel Permits in San Mateo and Alameda Counties.

RES issued four Bisected Parcel Permits in the last fiscal year, and as of August 4, 2025, two additional Permits are pending signature. A list of Bisected Parcel Permits issued within the last fiscal year is attached as Exhibit F.

TENANT INSURANCE COMPLIANCE: RES’S SYSTEM

TRANSITION FROM EXIGIS TO YARDI
As part of its lease administration obligations, RES ensures that hundreds of SFPUC tenants and licensees provide the insurance required by the City, in most cases, comprehensive general liability insurance, worker s’ compensation insurance, and automobile liability insurance. RES performs these obligations through an insurance compliance software system.

33 Before October of 2024, RES engaged in a laborious process to ensure insurance compliance. RES would receive all current and historical data and insurance certificates from a separate third-party insurance compliance platform (Exigis), which contained a total of 8,132 files.

In October 2024, RES began migrating these insurance files from its old system, Exigis, to a new insurance compliance software platform, the Yardi/Tenant Shield platform. The transition from Exigis to Yardi Tenant Shield will save the RES operating budget an estimated $20,000 per year and hours of staff time.

The Yardi Tenant Shield platform now offers the quick and easy ability for tenants or their insurance brokers to upload insurance certificates directly to Yardi or directly to our [email protected] email. It also integrates seamlessly with RES’s existing Yardi lease administration software. Through Yardi, RES can also now track the insurance status and requirements for 96 specialty real estate agreements, which Exigis was previously unable to handle.

Expanding the SFPUC’s partnership with Yardi allows RES to explore future uses for the platform. There is an opportunity to provide access to billing statements and agreements in the future. RES is also exploring methods to streamline the tracking of property taxes within the Yardi lease administration tool.

Summary
In fiscal year 2024 -2025, RES earned over $15 million in revenue for the SFPUC. The small RES team analyzed over 150 new third -party projects proposed for the use of SFPUC property, issued over 135 new real estate agreements, provided real estate transactional support for over 50 SFPUC active capital projects, continued to negotiate scores of draft agreements for third-party use of SFPUC Property, and administered over 600 existing real estate agreements for the use of SFPUC Property in seven counties.

34 PROJECT APPENDIX

CURRENT WATER SYSTEM IMPROVEMENT PROJECT LIST
Regional Groundwater Storage and Recovery Project, Phase I and Phase II – This ongoing project seeks to continue building groundwater facilities in San Mateo County to fulfill the goal of diversifying the SFPUC’s regional water supply for drought protection. RES activities this year included:

1. Obtaining SFPUC Commission and S an Francisco Board of Supervisors approval of the purchase of an access easement on property owned by BART at Mission Road in Colma, for the SFPUC’s groundwater well station;

2. Negotiating with BART, the City of South San Francisco, and a private developer for temporary access rights and permanent access easements for the SFPUC’s groundwater well station near Antoinette Lane in South San Francisco;

3. Negotiating a License with the City of South San Francisco to use a portion of land owned by the City of South San Francisco for SFPUC construction staging and laydown at Antoinette Lane;

4. Obtaining SFPUC Commission and San Francisco Board of Supervisors’ approval to purchase new easements for water and electrical facilities, as well as temporary construction easements to install these facilities, from the Kaiser Foundation Hospitals for the South San Francisco Main Well near Antoinette Lane; and

5. Obtaining SFPUC Commission and S an Francisco Board of Supervisors’ approval to purchase an aerial easement and two footing easements for a pipeline across San Mateo County Flood Control property.

35 CURRENT OTHER WATER ENTERPRISE CAPITAL PROJECT LIST • Emergency Fire Water System – The SFPUC Emergency Fire Water System (EFWS), formerly known as the Auxiliary Water Supply System, is an independent high -pressure, non -potable water supply system built following the 1906 earthquake and dedicated to fire protection. The EFWS mainly serves the northeastern portion of the City. RES continues to support the SFPUC project team in its efforts to improve the EFWS at various locations. RES is currently assisting with plans to install fireboat manifolds at Fort Mason on land under the jurisdiction of the Golden Gate National Recreation Area, and at Piers 20, 35.5, and Mission Bay Ferry Landing on land under Port jurisdiction. While most of these facilities are still in the planning and design phases, RES is actively negotiating an MOU with the Port to install EFWS facilities at Mission Bay Ferry Landing in early 2026. • Bay Division Pipeline Nos. 3 and 4 Crossover Project – RES is working with the Veterans’ Administration Hospital in Palo Alto on a project to acquire an access easement for permanent access to the SFPUC Crossover facility that runs through the Veterans’ Administration Hospital campus.
• Bay Division Pipeline Nos. 3 and 4 Valve Lot Safe Pipe Entry Project – RES is working with the project team, the City of Sunnyvale, Stanford University, and others to acquire the necessary right -of-way authorizations to construct the project.
• CDD Campus at 2000 Marin – RES is working with the project manager to negotiate an internal MOU between Water, Power, and Wastewater Enterprises for the mutual use of parcels belonging to the Wastewater Enterprise, containing the SFPUC’s Islais Creek Transport/Storage Box.

The Wastewater Enterprise parcels would become part of the new CDD campus to be used for traffic circulation and the installation of an EFWS pipeline and a BCTD duct bank across the Wastewater Enterprise property. The MOU would provide for the use of property under the Wastewater Enterprise’s jurisdiction by the Water and Power Enterprise, while protecting the Wastewater Enterprise’s original utility purpose.

36 • Cathodic Protection Capital Upgrades Phase III – This project will install cathodic protection improvements on SFPUC pipeline right s of way. RES will acquire utility easements, access easements, and temporary construction easements, as and where needed, for the improvements and for the installation of electrical supply lines needed to power the improvements. Currently, RES is working with the East Bay Regional Park District to acquire an easement for PG&E facilities for the SFPUC’s Calaveras Pipeline. RES has also identified a need to acquire a second easement for this project on private property in Hillsborough for PG&E facilities. RES is currently coordinating the survey work necessary to produce legal description and plat map s for the easements.
• Crystal Springs Pipeline No. 2, Reach 5 Relining – RES is working with the project team to reclaim portions of the pipeline Right of Way for project construction. The Crystal Springs Pipeline No. 2 Reach 5 Project would reline a 3.84 -mile segment of Crystal Springs Pipeline No. 2. The project would require access pits at multiple locations, as well as the construction of new manholes and modification or relocation of pipeline appurtenances. The project is currently finalizing the design phase.

The anticipated right -of-way needs include negotiating memoranda of agreements with impacted municipalities for project implementation and clearing the right -of-way of significant encroachments along residential stretches of the right -of-way. RES has met with each property owner impacted by the project construction to present and discuss the project and work with the property owners to remove encroachments before construction.
• Crystal Springs Pipeline No. 2, Reaches 2 and 3 Re -Lining – This project would rehabilitate Reaches 2 and 3 of Crystal Springs Pipeline No. 2 by replacing a portion of the pipeline within a new alignment and re-lining the re st. The project would require access pits at multiple locations, as well as the construction of new manholes and the modification or relocation of pipeline appurtenances. The project is currently in the design phase. The a nticipated right -of-way needs include (i) acquiring easements for the portions of the new pipeline that would cross private property; (ii) locating temporary space on

37 SFPUC Property or within public right-of-way for temporary equipment laydown and staging; and (iii) negotiating memoranda of agreements with impacted municipalities for project implementation. • Millbrae Yard Lab and Shops Improvements Project – This project would redevelop the Millbrae Yard over multiple phases. RES support for the project to date has included extensive analysis of the existing historic easements and agreements on the multiple parcels that comprise the Millbrae Yard, assisting with obtaining an accurate ALTA survey for the project site from the City’s Bureau of Streets and Mapping, and coordinating with the existing tenants to perform geotechnical and other investigations. Anticipated future RES support will mainly include coordinati ng with the existing tenants and easement holders to implement the project.
• Moccasin Dam Long -Term Improvements – This project proposes to construct a stilling basin on federal lands under the jurisdiction of the United States Bureau of Land Management, adjacent to SFPUC Raker Act lands. RES will support the project team to complete a “Section 2 Amendment” of the Raker Act, which would effectively remove certain lands not being used and not necessary for SFPUC operation and replace them with the area where the new stilling basin would be constructed.
• Moccasin Penstocks Rehabilitation Project – This project is in the Alternatives Analysis Phase. Anticipated future work includes (i) acquiring special use permits from the Bureau of Land Management for necessary access road improvements; (ii) potentially amending the SFPUC’s Raker Act grant; (iii) acquiring a temporary construction easement on private property for access during construction; and (i v) coordinating with Caltrans to define its Highway 49 right -of-way where it crosses SFPUC Property; (v) and obtaining an encroachment permit from Caltrans to allow for new access to the project area from Highway 49.
• Potable Emergency Firefighting Water System (PEFWS) – This proposed system is related to the EFWS. The PEFWS will serve the west side of San Francisco and will be connected to the drinking water system, using a system of valves that can be closed, when needed, to

38 function at the high pressure required for firefighting. RES will negotiate any necessary agreements with other City departments to install pipelines for the new system through City property (i.e., Stern Grove and Golden Gate Park).
• Southern Skyline Boulevard Ridge Trail Extension – This project is constructing approximately six miles of multi -purpose trail generally following Skyline Boulevard (State Route 35) from State Route 92 to the southern boundary of the Peninsula Watershed at the Phleger Estate. RES will work to assume the existing easement across the Skylawn Memorial Park. The easement is currently owned by the Bay Area Ridge Trail Council.
• Town of Sunol Pipeline Replacement Project – This project will replace a portion of the Sunol Pipeline where it crosses Laguna Creek and the Sunol Glen School. RES has negotiated a purchase and sale agreement for an easement for the new pipeline alignment and appurtenant facilities on and across the school property, as well as a temporary construction easement on the school property. RES will seek SFPUC Commission and San Francisco Board of Supervisors’ approval for the acquisition in the coming months . Additionally, the SFPUC discovered a PG&E utility pole on SFPUC property that lies in the path of a proposed trench. RES performed research to determine PG&E’s land rights (or lack of) and is now working with PG&E to draft and issue a new revocable license to relocate the pole so that project construction may proceed.
• Vista Grande Drainage Basin Improvement Project – Please see the earlier discussion in this report.

CURRENT NON-SSIP WASTEWATER ENTERPRISE CAPITAL

PROJECT LIS T
• Ocean Beach Climate Change Adaptation Project – This project focuses on alleviating chronic shoreline erosion at Ocean Beach between Sloat Boulevard and Fort Funston. Project elements include managed retreat, beach nourishment through the placement of sand, the construction of a buried wall to protect the Lake Merced Tunnel, public

39 beach access and recreational improvements, and the permanent closure of the Great Highway Extension. RES support for this project involves working with the Park Service to obtain easements for the project components on Golden Gate National Recreation Area lands and working with the San Francisco Recreation and Parks Department to negotiate a MOU to govern the respective responsibilities and obligations of each department for the various improvements installed on the Recreation and Parks Department lands as part of the project. • Quint Street Vacation and Jurisdictional Transfer – A Caltrain project in 2014 bisected Quint Street just south of Jerrold Avenue, creating a dead-end street on a block where the SFPUC owns the property on both sides of the street. To mitigate the security issues, illegal dumping, and public safety concerns common to dead -end streets in San Francisco, the SFPUC seeks to install a control gate across Quint Street, securing the site and preventing public access. For the SFPUC to be able to control access at Quint Street (a public street), the San Francisco Board of Supervisors must pass legislation ordering the vacation of that portion of the street and authorizing the jurisdictional transfer of the vacated portion from P ublic Works to the SFPUC. RES staff is leading the effort with Public Works and the City’s Real Estate Division to complete the street vacation and transfer of the property.

CURRENT SSIP PROJECT LIST
• Combined Sewer Discharge at the Brannan Street and Sansome Street Outfalls – This project would rehabilitate the SFPUC’s combined sewer discharge outfall facilities at Brannan Street and at Sansome Street.

Both C ombined Sewer Discharge facilities are located on land under the Port’s jurisdiction. RES is currently negotiat ing two MOUs with the Port for the temporary use of Port lands for contractor staging during construction.
• Folsom Area Stormwater Improvement Project –Please see the earlier discussion in this report
• Lower Alemany Stormwater Improvement Project – The SFPUC seeks to bore a 5,650-foot-long 10-foot-diameter tunnel to alleviate flooding

40 and improve flood resilience in the Lower Alemany Boulevard area.

RES support for the project include s (i) the acquisition of tunnel easements across and below three residential properties ; (ii) the acquisition of a temporary access easement across a commercial property; and (iii) the negotiation of a lease for the use of a commercial property for parking for local businesses to offset the significant loss of parking that will occur during project construction. • Seacliff No. 1 Pump Station and Force Main Upgrade Project – This project would replace the existing Seacliff Pump Station No. 1 in a new location. The pump station is currently located in a landlocked SFPUC parcel at China Beach. The topography of the area and the landlocked nature of the SFPUC parcel led to the SFPUC’s decision to relocate the pump station to within the public right -of-way at the end of Seacliff Avenue. RES support for this project includes coordinating the effort to obtain Special Use Permits from the National Park Service for the necessary access to decommission the existing pump station and for the long -term placement of electrical cabinetry on Golden Gate National Recreation Area property. Additionally, RES is negotiating with a property owner to acquire a temporary construction easement on private property, adjacent to an SFPUC easement, to perform the necessary work on the facilities within the easement.
• Southeast Plant and Central Shops Project (aka Biosolids) – This project would replace the existing solids treatment facilities at the Southeast Plant with more reliable, efficient, and modern technologies and facilities. The new facility requires a new transmission -level natural gas service from PG&E. PG&E requires that the SFPUC grant it a new easement for the facilities to be constructed on SFPUC property before it will operate the natural gas service, which is critical for the SFPUC’s commissioning of the new facility.

41 CURRENT POWER ENTERPRISE CAPITAL PROJECT LIST
• Bay Corridor Transmission and Distribution – RES continues to support the SFPUC project team in its efforts to build a proposed electrical distribution system in the southeast portion of San Francisco that will allow the SFPUC to serve customers from its own distribution system. • SFPUC/Port Northern Waterfront Electrification Project – The SFPUC and the Port of San Francisco seek to increase the SFPUC’s capacity to provide power to Port operations. SFPUC and Port staff identified Port property on which the SFPUC could design and construct electrical infrastructure for the benefit of the Port’s maritime operations. The project is currently in its design phase. The new facilities will require a 66-year MOU with the Port.
• Cordia Steam Loop Substation – The SFPUC is working with Cordia on the design of a new substation to serve Cordia’s goal of converting to clean energy. The substation would be constructed and owned by Cordia. The SFPUC is negotiating with Cordia to construct additional substation capacity so that the SFPUC can serve non -Cordia customers as well. The arrangement will require a new easement to the SFPUC, as well as additional agreements for lease of space.

HETCH HETCHY WATER AND POWER CURRENT PROJECT LIST
• Verizon Cell Site Modifications and Lease Renewals – The SFPUC and Verizon are nearing the completion of negotiating an eight-year communications site lease for Verizon’s use of the SFPUC’s power transmission tower at Early Intake (also known as Intake Ridge) in Tuolumne County. The SFPUC and Verizon streamline d negotiations by using terms that were already negotiated by the parties in the Moccasin Surge Tank lease. RES anticipates that the Early Intake lease will be finalized and executed in the fiscal year 2025-26. After the lease for Early Intake is completed, Verizon and RES will work on subleasing space on the SFPUC’s communication towers located on federal property at Poopenaut P ass and Burnout Ridge. Further l review and concurrence by the federal agencies may be required. In addition, Verizon continues to work with HHWP and RES to replace and

42 upgrade communications facilities at other locations on the SFPUC Property.
• Consent Letters for Irrigation Line Crossings and Planting of Row Crops – In San Joaquin and Stanislaus Counties, the SFPUC Right of Way traverses through miles of land used primarily for agriculture. The deeds for these SFPUC parcels often reserve the right for the adjacent landowner to cross the SFPUC Right of Way with irrigation lines and/or to plant row crops on the Right of Way . These types of uses of the Right of Way are the more common types of projects reviewed by HHWP. RES staff drafts consent letters to approve these uses. • Hetch Hetchy Railroad Underutilized Property/Potential Surplus Property Sale – The SFPUC owns former Hetch Hetchy Railroad right- of-way way parcels in Tuolumne County. The City constructed the now-defunct railroad to support the construction of the O’Shaughnessy Dam many years ago. The existing 19 remnant parcels of the former Hetch Hetchy Railroad are either landlocked, non -contiguous, /or licensed to the Groveland Community Services District to maintain a sewer main under the parcels. The Groveland Community Services District seeks to acquire the parcels from the SFPUC to ensure its continued use of the sewer main and other utility facilities. The Groveland Community Services District hired a surveyor to prepare an ALTA survey of the Hetch Hetchy Railroad parcels that it is interested in acquiring. Previously, the State of California Housing and Community Development Department tentatively agreed with the SFPUC analysis that the former railroad parcels may be considered “exempt surplus” land and would not be subject to most provisions of the State Surplus Lands Act (HCD will make a formal determination when more transaction details are available).
• Stanislaus County (in coordination with Caltrans) North County Corridor (NCC) Project – Phase 1 State Route 108 Expressway Project – Please see the earlier discussion in this report.
• Federal Highway Administration and Tuolumne County Evergreen Road Widening –HHWP and RES are working with the Federal Highway Administration and Tuolumne County on their project to widen Evergreen Road, a portion of which runs through SFPUC Property.

43 Tuolumne County paid the General Plan Referral fee. RES sent a revised purchase and sale agreement for sale of the easement and easement deed to Tuolumne County in the fiscal year 2024-2025. The easement would add additional protection provisions for the additional City infrastructure, including a Recreation and Parks Department utility line, located along the Evergreen Road alignment. Tuolumne County has not yet responded to the revised purchase and sale agreement and easement deed. RES will continue to work with the Federal Highway Administration and Tuolumne County to finalize the sale of the easement for the Evergreen Road widening, which needs SFPUC Commission and San Francisco Board of Supervisors approval. • Transmission Line Clearance Mitigation – HHWP is working with the Modesto Irrigation District (MID) and PG&E to move existing aerial power distribution line conductors that cross under the HHWP power transmission lines to new subterranean conduits with new power conductors for MID and PG&E. This project will resolve clearance issues between the HHWP power transmission lines and other utility distribution lines. RES will issue one revocable license to MID , two consent letters, and two revocable licenses to PG&E to underground the existing power lines at various locations across the HHWP power transmission ROW. PG&E redesigned one of its power distribution line alignments to avoid crossing the HHWP power transmission right of way, which resulted in needing to issue one fewer revocable license to PG&E.

SFPUC COTTAGE TENANTS LIST
• Bay Area Cottage Leases. The SFPUC maintains 14 cottages available for employee housing in the Bay Area. The SFPUC issued two cottage leases in the past fiscal year.
• Hetch Hetchy and Upcountry Cottage Leases –The SFPUC maintains 41 cottage tenants in Moccasin and the greater “Upcountry” area of the Tuolumne Watershed. The SFPUC issued seven cottage leases in the past fiscal year.

44 EXHIBIT A
REAL ESTATE AGREEMENT REVENUE IN FY 2024-2025

ENTERPRISE FISCAL YEAR 2024-2025 REVENUE
Wastewater $ 845,277.59 Hetch Hetchy Water and Power $ 83,416.88 Water $ 14,073,229.55
Total $ 15,01,924.02

45 EXHIBIT B
REAL ESTATE AGREEMENTS ISSUED IN FY 2024-2025

County Start Date Licensee Use Use Fee
Annual
Rent /
One
Time
Payment
San
Mateo
8/1/2024 Poplar &
Redwood, LLC
Ingress, egress,
parking, and
landscaping
$5,740.80 Annual
Santa
Clara
9/1/2024 Bandwidth IG,
LLC
Fiber optic
communication
facility
$6,696.00 Annual
San
Mateo
9/16/2024 Pacific Gas &
Electric
Company
Gas
transmission
line, temporary
staging and
fencing
$24,792.00 Annual
Santa
Clara
10/1/2024 Level 3
Communication,
LLC
Fiber optic
communication
facility
$7,149.96 Annual
Santa
Clara
10/1/2024 Boldyn
Networks US
LLC
Fiber optic
communication
facility
$5,256.00 Annual
San
Mateo
10/7/2024 San Mateo
County
Road access $2,400.00 Annual
San
Mateo
10/15/2024 City of Menlo
Park
Water main line
operation,
maintenance
and repair
$2,400.00 Annual
Santa
Clara
11/1/2024 Adobe Animal
Veterinary
Hospital, Inc.

Ingress, egress,
parking,
driveway and
landscaping
$26,004.00 Annual
Alameda 11/1/2024 Richard Duffey Cottage $11,819.52 Annual Alameda 11/1/2024 Eric Joseph
Sanchez
Cottage $11,819.52 Annual
San
Mateo
11/1/2024 Filoli Center Yard, orchard,
and vehicle
$20,700.00 Annual

46 storage
San
Francisco
12/1/2024 The San
Francisco
Beekeepers
Association
Beehive box
operation
$131.60 Annual
San
Mateo
12/1/2024 San Mateo
County
Walkway,
landscape,
parking lot and
baseball field
$19,200.00 Annual
Santa
Clara
12/1/2024 Level 3
Communications
LLC
Fiber optic
communication
facility
$74,319.96 Annual
Santa
Clara
12/1/2024 Level 3
Communications
LLC
Fiber optic
communication
facility
$77,269.92 Annual
Santa
Clara
12/1/2024 Level 3
Communications
LLC
Fiber optic
communication
facility
$288.00 Annual
Alameda 12/1/2024 Level 3 Telecom
of California
Fiber optic
communication
facility
$37,625.04 Annual
Alameda 12/1/2024 Level 3 Telecom
of California
Fiber optic
communication
facility
$3,600.00 Annual
Santa
Clara
12/1/2024 Wiltel
Communications
LLC
Fiber optic
communication
facility
$200,960.04 Annual
Santa
Clara
1/8/2025 Bandwidth IG,
LLC
Fiber optic and
conduit crossing
$1,920.00 Annual
Santa
Clara
2/1/2025 Rafter C Ranch,
LLC
Cattle grazing $2,724.00 Based on
AUM
San
Mateo
2/1/2025 Pacific Gas &
Electric
Company
Parking, staging
and repair of
gas line
$5,052.00 Annual
San Mato 3/1/2025 The Board of
Governors of
the Colorado
State University
System
Data-gathering
radar site

N/A N/A

47 Alameda 3/14/2025 Northstar
Vallecitos, LLC
Water pump
station, and
vehicular
ingress, and
egress
$17,161.32 Annual
Alameda 3/17/2025 Western Start
Nurseries LLC
Nursery
operation
$21,000.00 Annual
San
Mateo
4/1/2025 Escobedo Family
Trust
Landscaping $125.00 Annual
San
Mateo
4/1/2025 New Light
Properties, LLC
Landscaping $125.00 Annual
San
Mateo
4/1/2025 Andy Yu and
Maureen Coc
Mui Voong
Landscaping $125.00 Annual
Santa
Clara
4/10/2025 Zayo Group Inc. Communications
Facility
$2,880.00 Annual
San
Mateo
4/21/2025 Pacific Gas &
Electric
Company
Repair of gas
transmission
line
$17,424.00 Annual
Santa
Clara
4/21/2025 Bandwidth IG,
LLC
Fiber optic
crossing facility
$11,664.00 Annual
San
Francisco
5/1/2025 Mannar
Investments
Vehicle parking $65,400.00 Annual
Alameda 5/29/2025 Pacific Gas &
Electric
Company
Ingress and
egress, parking,
and construction
staging
$90,000.00 Annual
Alameda 5/29/2025 California Trout
Inc.

Ingress and
egress, parking,
and staging
No Fee N/A
Alameda 6/1/2025 State of
California
(Caltrans)
Ingress and
egress, tree and
vegetation
removal, and
construction of
State Route 84
$10,000.00 One-Time
Fee
Alameda 6/10/2025 Newark
Industrial Park
LLC
Parking and
landscaping
$16,848.00 Annual
Alameda 6/26/2025 State of
California
(Caltrans)
Ingress and
egress, parking,
staging, and
storage
$132,204.00 One-Time
Fee

48 EXHIBIT C
SFPUC PROPERTY TAXES PAID IN FY 2024-2025

County Fiscal Year 2024-2025 Property
Taxes and Assessments Paid
Alameda $1,045,739.92
San Francisco $32,294.22
San Mateo $81,9177.30
Santa Clara $309,499.20
San Joaquin $4,864.10
Stanislaus $18,577.12
Tuolumne $598,175.66
Total $2,828,327.52

49 EXHIBIT D

LIST OF AGREEMENTS WHERE THE SFPUC PAYS RENT

Landlord Property
Address
Premises
(sq. ft.)
Permitted
Use Start Date End Date Annual
Rent
1880 Jerrold
Ave LLC
1876
Oakdale
Avenue, San
Francisco

25,937
Staging
and pre-
disposal
materials
storage
10/1/2018 9/30/2026 $ 189,600
2725
Oakdale LLC
2725
Oakdale
Avenue, San
Francisco

46,442
Warehouse
and
parking
6/1/2019 5/31/2028 $ 983,471
Raul and
Denise
Arriaza, and
Linda and
Carl Olson
1325A Evans
Avenue, San
Francisco

3,287
Offices 1/1/2019 12/31/2026 $ 121,882
Executive
Park
Properties
LLC
150
Executive
Park Blvd.,
Suite 1300,
San
Francisco

4,164
Offices 2/1/2025 1/31/2030 $ 134,914
Bayview
Plaza, LLC
3801 Third
Street, Suite
600, San
Francisco

10,740
Offices 7/1/2024 6/30/2027 $ 398,239
City of
Hayward -
Hayward
Executive
Airport
22488
Skywest
Drive
(Hayward
Executive
Airport),
Hayward

24,974
Pump
station
1/1/2005 12/31/2054 $ 4,408

50 Kristian A.

Akseth, Lilly
B. Akseth,
and Libkra
Investments
1980
Oakdale
Avenue, San
Francisco

36,400
Warehouse
and
parking
1/1/2023 12/31/2030 $1,075,931
Communicati
on & Control,
Inc. -
Livermore
Hills
Livermore
Hills near
Morgan
Territory
Road,
Alameda
County
Two six-
foot
microwave
dishes and
shelter
space
Radio
Comms.

Site
12/1/2022 11/30/2027 $ 20,644
Communicati
on & Control,
Inc. - Mt.

Allison
Mt. Allison,
Alameda
County
Microwave
dishes on
towers,
antennas,
and shelter
space
Radio
Comms.

Site
5/1/2015 4/30/2030 $ 108,954
Vertical
Bridge
Corral Hollow
32322 Corral
Hollow Road,
Tracy

345
Radio
Comms.

Site
1/1/2023 12/31/2027 $ 31,827
Lolita Lodhia,
Hersha
Lodhia Miller
and Sharmila
Lodhia, as
Co-Trustees
of the Lodhia
Living Trust
dated
11/21/1994
1900
Oakdale
Avenue, San
Francisco

46,000
Warehouse
and
parking
7/15/2024 6/30/2029 $ 706,722
Three BG
Investments,
LLC
19500
Nugget
Boulevard,
Sonora

15,800
Warehouse
and
Parking
9/1/2024 8/31/2029 $ 169,218
Alameda
County
Sunol Ridge
37000
Palomares
Road,
Alameda
County
N/A Radio
Comms.

Site
4/1/2020 3/31/2029 $ 41,352

51 Alameda
County
Crane Ridge,
14300 Mines
Road,
Alameda
County
N/A Radio
Comms.

Site
4/1/2020 3/31/2029 $ 4,056
American
Towers LLC
300 Radio
Road
(San Bruno
Mountain),
San Mateo
County

9 Radio
Comms.

Site
8/1/2024 7/31/2029 $ 32,742
Joaquin
Bear, LLC
Cedar Ridge
White Fang
Drive,
Tuolumne
County
N/A Radio
Comms.

Site
10/1/2020 9/30/2028 $ 32,845
Crown Castle
(formerly
TriStar
Investors
LLC)
2201 Blue
Gum
Avenue,
Stanislaus
County
N/A Radio
Comms.

Site
11/1/2020 10/31/2025 $ 32,630
Port Pier 23, San
Francisco

87,363
Shed,
storage,
and
parking
10/1/2023 11/30/2026 $2,005,292
Port Roundhouse
Two Building,
10 Lombard
Street, San
Francisco

7,350
Offices 10/1/2023 11/30/2026 $ 434,554
Port Pier 33 Shed,
San
Francisco

3,440
Shed,
trailer, and
parking
8/1/2020 7/31/2030 $ 74,304
Port Pier 19 Shed,
San
Francisco

13,920
Storage 10/15/2024 10/31/2027 $ 210,470
Total: 21

FY 2024-
2025 Rent
$6,844,053

52 EXHIBIT E
AGREEMENTS ISSUED TO PG&E IN FY 2024-2025

PG&E Project Title Agreement
Date
Agreement
Type
PG&E Replace One Power Distribution Pole (PG&E
Job No. 35453522) within a portion of SFPUC
Parcel No. 275, located near Moccasin, CA
07/12/24 Consent Letter
PG&E Electrical Transmission Short Cycle
Maintenance, Batch 3 (Jefferson-Hilldale/Jefferson-
Martin/Castro-Newark/Newark-Livermore)
07/31/24 Consent Letter
PG&E GT ILI I-746 L-109 ILI Pigging and Analysis
Peninsula 2024 – License No. P4648
09/04/24 Revocable
License
PG&E Idle Transmission Tower Removal Tesla-
Newark
09/20/24 Consent Letter
PG&E Replace Five Power Distribution Poles within
a portion of SFPUC Parcel No. 275, located near
Moccasin, CA
11/11/24 Consent Letter
PG&E Replace Two Power Distribution Poles (PG&E
Job Nos. 35458946 and 35459310) within a portion
of SFPUC Parcel No. 272-A, located near Moccasin,
CA
11/15/24 Consent Letter
PG&E Electrical Transmission Line Repairs – Batch
6 (Alameda County)
12/10/24 Work
Authorization
Letter
PG&E Replace One Power Distribution Pole (PG&E
Job No. 35268965) within a portion of SFPUC
Parcel No. 272-A, located near Old Priest Grade,
Big Oak Flat, CA
12/20/24 Consent Letter
PG&E Replace One Power Distribution Pole (PG&E
Job No. 35268975) within a portion of SFPUC
Parcel No. 272-A, located near Old Priest Grade,
Big Oak Flat, CA
12/20/24 Consent Letter
PG&E Electrical Transmission Line Repairs – Batch 01/02/25 Work Authorization

53 PG&E Project Title Agreement
Date
Agreement
Type
6 (Santa Clara County) Letter
PG&E Gas Line L-132 Corrosion Casing Remediation
Project - License No. P4652
01/15/25 Revocable
License
PG&E Electrical Transmission Line Repairs – Batch
6 (San Mateo County)
01/28/25 Consent Letter
PG&E Electric Distribution Work (35409691_GEP
1100 El Camino Millbrae T117)
01/31/25 Work
Authorization
Letter
PG&E Electrical Transmission Short Cycle
Maintenance Repairs May 27, 2025, through Aug
21, 2025 (Batch 2)
03/21/25 Work
Authorization
Letter
PG&E Electrical Transmission Short Cycle
Maintenance - Peninsula & Alameda Watershed
Locations (Alameda County)
03/31/25 Work
Authorization
Letter
PG&E Gas Pipeline L-132 Repair near Canada Road
– License No. P4669
04/02/25 Revocable
License
PG&E GT I-881 L-132 MP 0.00-31.93 Traditional In
Line Inspection Reinspection
04/07/25 Work
Authorization
Letter
PG&E Electrical Transmission Short Cycle
Maintenance - Peninsula & Alameda Watershed
Locations (San Mateo County)
04/30/25 Consent Letter
PG&E Sunol Valley Fish Passage Project &
Relocation of Gas Pipeline L303 AL Watershed 2025
– PG&E Staging License No. P4678
05/19/25 Revocable
License
PG&E Sunol Valley Fish Passage Project &
Relocation of Gas Pipeline L303 AL Watershed 2025
– Cal Trout Staging License No. P4679
05/19/25 Revocable
License
PG&E Sunol Valley Fish Passage Project &
Relocation of Gas Pipeline L303 AL Watershed 2025
– PG&E Interim License No. P4680
06/13/25 Revocable
License

54 EXHIBIT F
BISECTED PARCEL PERMITS ISSUED FY 2024 - 2025

County Commencement
Date
Permittee Annual Use Fee
San
Mateo
4/1/2025 Antonio and Laura
Escobedo
$125
San
Mateo
4/1/2025 Mauro and Linda
Di Lorenzo

$125
San
Mateo
4/1/2025 Vince and Liezl Thayer $125
San
Mateo
4/1/2025 Jianxun Yu and
Maureen Coc Mui
Voong
$125