OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
Date: February 10, 2026
To: Joshua Ace, President
Steve Leveroni, Vice President
Avni Jamdar, Commissioner
Kate H. Stacy, Commissioner
Megan Thurlow, Commissioner
Through: Dennis J. Herrera, General Manager
From: Vivian Chen, Deputy Chief Financial Officer
RE: SFPUC Fiscal Year 2024-25 Annual Comprehensive Financial Report and Popular Annual Financial Report
Financial Services is pleased to present the FY 2024-25 Annual Comprehensive Financial Report (ACFR) issued by Macias Gini & O’Connell LLP on December 10, 2025 and the FY 2024-25 Popular Annual Financial Report (PAFR) focusing on SFPUC’s “Effective Workforce”.
The reports can be found on our public-facing website:
https://www.sfpuc.gov/sites/default/files/about-us/policies-reports/ACFR-2025.pdf https://www.sfpuc.gov/sites/default/files/about-us/policies-reports/PAFR-2025.pdf
The ACFR describes our financial activities, condition, and services as an organization, inclusive of the Water, Wastewater, and Hetch Hetchy Water & Power & CleanPowerSF audited financial statements. The report includes financial and statistical information, inclusive of ten years of financial and operating indicators and trends, social and economic data, and other metrics of interest to the general public and investors. The Government Finance Officers Association (GFOA) has awarded the SFPUC the prestigious Certificate of Achievement in Financial Reporting annually since 2009.
The PAFR is specifically designed to be readily accessible and easily understandable to the general public and interested parties without a background in public finance. This year’s report highlights our work is only as strong as the people behind it. At the SFPUC, we prioritize investing in an effective, first-rate workforce that keeps essential services reliable every day.
The SFPUC has received the GFOA Award for Outstanding Achievement in Popular Annual Financial Reporting annually since 2010. The award recognizes our commitment to transparency and increasing public awareness by providing an overview of our financial condition.
We are looking forward to another year of both prestigious awards for fiscal year 2024.
cc: Ronald P. Flynn, Deputy General Manager
Nancy L. Hom, Assistant General Manager, Business Services & Chief Financial Officer Laura Busch, Deputy Chief Financial Officer
Att: FY 2024-25 Annual Comprehensive Financial Report
FY 2024-25 Popular Annual Financial Report
SUSTAINING THE
The San Francisco Public Utilities Commission
An Enterprise Department of the City and County of
San Francisco, California
Annual Comprehensive Financial Report for the
Fiscal Years Ended
June 30, 2025 and 2024
Prepared by SFPUC Financial Services
Nancy L. Hom
Chief Financial Officer and Assistant General Manager, Business Services The San Francisco Public Utilities Commission
TABLE OF CONTENTS
Page
Introductory Section (Unaudited) 1–15
General Manager’s Transmittal Letter 2–3
The Reporting Entity 4–5
Mission, Vision and Values and Commission Members 6–7
Organizational Chart 8
Agency Strategic Plan 9
Enterprise Risk Management Framework 9–10
San Francisco’s Budget Process 11
Operating and Capital Budgets 11–13
Ten-Year Financial Plan 13
Ten-Year Capital Plan 13
Financial Transparency, Reporting and Auditing Process 13 Financial Authority and Policies 14
Accounting Systems, Policies, and Internal Controls 14
Achievement Awards from Government Finance Officers Association 14-15 Financial Section
16–180
Independent Auditor’s Report 17–19
Management’s Discussion and Analysis (Unaudited) 20–66
Basic Financial Statements 67–169
Statements of Net Position – Proprietary Funds 67–68
Statements of Revenues, Expenses, and Changes in Net Position – Proprietary Funds
69 Statements of Cash Flows – Proprietary Funds 70–71
Notes to Basic Financial Statements 72–168
Required Supplementary Information (Unaudited) 169–180
Schedules of the Proportionate Share of the Net Pension (Asset)/Liability
170
Schedules of Employer Contributions - Pension Plan 171–172 Schedules of Changes in Total Pension Liability and Related Ratios – Replacement Benefits Plan
173
Schedules of Changes in Other Postemployment Benefits Liability and Related Ratios - Other Postemployment Healthcare Benefits Plan
174
Page
Schedules of Employer Contributions -
Other Postemployment Healthcare Benefits Plan
175
Supplementary Information (Proprietary Funds)
176–180
Schedule of Changes in Net Position – Dollar and Percentage Change vs. Prior Year
176–177
Schedule of Changes in Revenues, Expenses, and Net Position – Dollar and Percentage Change vs. Prior Year
178
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards
179–180
Statistical Section (Unaudited)
181–269
Financial Trends 182–212
Comparative Highlights of Revenues and Expenses 183–188 Changes in Net Position 189–200
Summary of Net Position by Component 201–206
Investments in Capital Assets 207–212
Revenue Capacity 213–220
Water, Wastewater, Hetchy Power, and CleanPowerSF Rates History
214–217
Net Revenue and Debt Service Coverage 218–220
Debt Capacity 221–244
Debt Ratings 222
Summary of Debt Outstanding 223–225
History of Outstanding Debt by Type 226–227
Future Principal and Interest Payments for Debt Issues 228–244 Demographic and Economic Information 245–262
City and County of San Francisco Economic and General
Information
246–250
Summary of Accounts by Type of Customer 251–252
Water Accounts and Billings 253
Historical Water Sales 254–256
Wholesale Water Customers 257
Water and Wastewater Accounts, and Billings by Type of Customer 258–259 Historical Hetchy Water Sales 260
Historical Hetchy Power Electric Sales 261
Historical CleanPowerSF Electric Sales 262
Page
Operating Information 263–269
Budgeted Full-Time Equivalent (FTEs) Employees by Division 264 Operating and Capacity Indicators 265–266
Major Water Wholesale, Retail, and Sewer Customer Accounts by Revenue
267
Major Electric Retail and Wholesale Customer Accounts by Revenue 268 Performance Measures 269
Project Team Acknowledgments
270
1 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
Introductory Section (Unaudited)
General Manager’s Transmittal Letter
The Reporting Entity
Mission, Vision and Values and Commission Members
Organizational Chart
Agency Strategic Plan
Enterprise Risk Management Framework
San Francisco’s Budget Process
Operating and Capital Budgets
Ten-Year Financial Plan
Ten-Year Capital Plan
Financial Transparency, Reporting and Auditing Process
Financial Authority and Policies
Accounting Systems, Policies, and Internal Controls
Achievement Awards from Government Finance Officers Association
The San Francisco Public Utilities Commission
An Enterprise Department of the City and County of San Francisco, California 2 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
SAN FRANCISCO PUBLIC UTILITIES COMMISSION
General Manager’s Transmittal Letter
December 10, 2025
Dear Customers and Interested Parties,
On behalf of the San Francisco Public Utilities Commission (SFPUC), I am pleased to present our Annual Comprehensive Financial Report for fiscal years June 30, 2025 and 2024. This report covers the first year of our two-year operating and capital budget cycle, which was adopted by the SFPUC Commission, the Mayor, and the San Francisco Board of Supervisors.
In addition to the two-year budget, we also develop a 10-year financial plan and a 10-year capital plan to guide our long-term investments. These long-range tools balance today’s priorities with future demands, and make sure our investments remain sustainable over time.
At the SFPUC, planning and budgeting are guided by three priorities: keeping services affordable, managing resources responsibly, and investing where it matters most.
Affordability
While for-profit utilities were raising electricity rates, the SFPUC kept electricity rates unchanged for 98% of our customers. Commissioners decided to not change rates for 380,000 CleanPowerSF customers for the fiscal year that began July 1, 2025. The SFPUC approved a 10% rate increase for 6,300 Hetch Hetchy Power customers to reflect the true cost of providing electricity. Even with that adjustment, Hetch Hetchy Power customers continue to pay the lowest electricity rates in San Francisco.
The SFPUC is also an industry leader, creating an Affordability Policy to guide rate setting. The policy established metrics to gauge the impact of budget increases on future rates. Our targets are for water and sewer bills to account for less than 3% of a typical customer’s income.
Additionally, San Francisco won a victory for ratepayers at the U.S. Supreme Court. The case, where thousands of cities and counties stood with San Francisco through friend-of-the-court briefs, was about preventing water pollution before it happens. It requires the Environmental Protection Agency (EPA) to follow the Clean Water Act by setting clear permit limits for discharges of treated wastewater. It holds utilities responsible for their discharges, instead of penalizing them for factors outside of their control. The legal victory protected ratepayers from potentially massive bill increases.
Responsible Management
Responsible management is about earning trust through results. This year, the skill of our workforce earned recognition across the agency.
These honors included the Government Finance Officers Association’s Award for Certificate of Achievement for Excellence (COA for ACFR), Budget Award, Popular Annual Financial Reporting Award (PAFR) and the Triple Crown Winner, the U.S. Conference of Mayors’ Climate Protection Award for CleanPowerSF, the National Association of Clean Water Agencies’ Clean Water Advocate Award for our leadership in San Francisco v. EPA, and the Institute for Sustainable Infrastructure’s Envision Platinum Award for the Treasure Island Water Resource Recovery Facility.
3 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
One of our leaders was also honored with the San Francisco Bay Area Planning and Urban Research Association’s Good Government Award.
Investing Where it Matters Most
We’re focused on investments that will make a lasting difference.
This year, with our partners on the Tuolumne River, we completed a 10-acre habitat restoration project as a precursor to the Healthy Rivers and Landscapes Program, improving salmon and trout habitat and demonstrating how stewardship and science-based collaboration deliver results.
We also signed a 40-year agreement with the San Francisco Unified School District to help campuses manage stormwater, reduce flood risk, and expand outdoor opportunities for students citywide.
Our work is only as strong as the people behind it. At the SFPUC, we prioritize investing in an effective, first-rate workforce that keeps essential services reliable every day.
The SFPUC’s auditors Macias Gini & O’Connell LLP have issued an unmodified (clean) audit of our agency’s financial statements as of and for the years ended June 30, 2025 and 2024. This audit provides accountability and transparency of the SFPUC’s financial activities, while reflecting the ethical way our agency operates. A copy of this independent auditor’s report can be found in the financial section of this report.
With the continued dedication of our Commissioners and staff, we are ensuring that our services remain affordable, responsibly managed, and focused on what matters most for San Francisco’s future.
Respectfully submitted,
Dennis J. Herrera
General Manager
San Francisco Public Utilities Commission
4 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
The Reporting Entity - Profile of the San Francisco Public Utilities Commission
The San Francisco Public Utilities Commission (SFPUC), an enterprise department of the City and County of San Francisco (the City), is responsible for the operation, maintenance, and development of three utility enterprises: Water, Wastewater, and Hetch Hetchy Water and Power and CleanPowerSF. We provide wholesale and retail drinking water to the San Francisco Bay Area, wastewater collection and treatment within San Francisco and three neighboring municipalities, and power to residential and commercial customers and municipal facilities.
Our Business Services, External Affairs, and Infrastructure bureaus provide support and administrative services and are funded through utility rates and charges.
The Water Enterprise operates the Hetch Hetchy Regional Water System (System), a wholesale and retail drinking water supply system that serves over 2.6 million customers in Alameda, Santa Clara, San Mateo, and San Francisco counties. The upcountry portion of the System begins with Hetch Hetchy Reservoir in Yosemite National Park.
Impounded by O’Shaughnessy Dam, Hetch Hetchy Reservoir water passes through hydroelectric powerhouses before it enters the San Joaquin Pipelines, the Tesla Ultraviolet Treatment Facility, and the Coast Range Tunnel on its journey to the Bay Area.
The Bay Area portion of the System includes water collection, treatment, and transmission facilities from the Alameda East Portal to the wholesale service area and terminal reservoirs in San Francisco. Water storage facilities include watersheds, dams, and reservoirs such as our Calaveras, San Antonio, Crystal Springs, Pilarcitos, and San Andreas. The water treatment facilities are Tesla Ultraviolet Treatment Facility, disinfecting the Hetch Hetchy supply; Sunol Valley Water Treatment Plant, treating the water from the Calaveras and San Antonio supply as well as the stored Hetch Hetchy supply; and Harry Tracy Water Treatment Plant, treating the water from the Crystal Springs and San Andreas supply. The water transmission system in the Bay Area and Peninsula includes the Bay Division, San Andreas, Sunset Supply, and Crystal Springs pipelines. The Bay Area transmission system also includes Irvington Tunnel 1 and Tunnel 2, the Bay Tunnel, and the Crystal Springs Bypass Tunnel.
The Water Enterprise also manages water distribution in the City and the majority of the drinking water is supplied by our system, originates as snowmelt within the 459-square-mile Hetch Hetchy Watershed on the upper Tuolumne River within Yosemite National Park. This high-quality water is transported 167 miles across California solely by gravity. The Hetch Hetchy water supply is augmented with precipitation collected in the reservoirs of the Alameda Creek Watershed in Alameda County, and the Peninsula Watershed in San Mateo County. The Regional Groundwater Storage and Recovery Project, currently under construction, will provide additional dry year water supply to the System for drought management.
Wa
ter Enterprise revenue is based on retail and wholesale water rate payments from customers. Retail rates are set by the SFPUC, while wholesale rates are set by the Commission pursuant to our Water Supply Agreement with our wholesale customers.
The Wastewater Enterprise is responsible for the operation and maintenance of San Francisco’s combined sewer system that collects, treats, and discharges once treated, sanitary sewage (toilet flushing, bathroom and kitchen sinks, showers) and stormwater runoff (rainwater falling on our roofs, sidewalks and streets within San Francisco, parts of Daly City, the Bayshore Sanitary District, Brisbane, Treasure Island, and Yerba Buena Island. This work is crucial for the protection of public health, and for the environmental safety of the San Francisco Bay and Pacific Ocean. Our combined sewer system is unique to coastal California and offers significant environmental benefits because it captures and treats both stormwater (rain runoff) and sanitary sewage from homes and businesses, and these combined flows are referred to as wastewater.
San Francisco wastewater and stormwater flows are treated at three facilities: the Southeast Treatment Plant, the Oceanside Treatment Plant, and the North Point Wet Weather Facility, the last of which is operated only in wet weather. The sewer system currently can handle up to an average of 70 million gallons per day (MGD) in dry weather and can treat up to 575 MGD in wet weather. The Wastewater Enterprise operates pump stations, discharge points, and the massive underground transport/storage structures around the City that have storage capacity up to 200 million gallons.
Enterprises Funds
Water Water
Wastewater Wastewater
Hetch Hetchy
Hetchy Water
Hetchy Power
CleanPowerSF
5 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
The Wastewater Enterprise serves both residential and commercial accounts as well as some municipal customers. We operate, clean, inspect, and maintain more than 1,000 miles of sewer pipes. We regularly monitor areas of the San Francisco shoreline for water quality where water recreation is common and provide water quality reports to the public using our 24-hour hotline, website, and e-newsletters.
In a combined sewer system, such as San Francisco’s, managing stormwater is an important priority for the SFPUC and the City. We take a comprehensive approach to managing stormwater and advancing flood resilience across the City. Although no sewer system can handle the heaviest rains, we are pursuing a variety of approaches to improve the City’s flood resilience in the face of increasingly intense rainstorms. The comprehensive RainReadySF Program, which is a combination of planned infrastructure improvements, coordinated City services and innovative programs, provides residents and businesses with the resources they need to reduce the risk of flooding during a major rainstorm.
The Hetch Hetchy Water and Power and CleanPowerSF Enterprise comprises of three key components:
(1) Hetch Hetchy Water (Hetchy Water), which operates and maintains the upcountry water and power facilities;
(2) Hetch Hetchy Power (Hetchy Power), responsible for all power utility wholesale and retail transactions and in-City power operations; and
(3) CleanPowerSF, a Community Choice Aggregation (CCA) that provides San Francisco residents and businesses with electricity supply services sourced from new and existing clean energy sources.
Hetchy Water is responsible for operating the Hetch Hetchy Reservoir, the main source of water for the Hetch Hetchy Regional Water System (System) and plays a key role in water delivery in California. Several of the Hetch Hetchy Water facilities are joint assets and are used for both water transmission and power generation and transmission. Operating and capital costs of these facilities are allocated 45% to Hetchy Water and 55% to Hetchy Power. Refer to Water Enterprise for more information on the System.
Hetchy Power is the publicly owned utility for San Francisco. The Hetchy Power System is comprised of transmission lines and some local distribution facilities. It has a generation portfolio that includes three major hydroelectric powerhouses – Holm, Kirkwood, and Moccasin – in the Sierra Nevada mountain range and 28 solar arrays in San Francisco. Hetchy Power revenue is based on retail and wholesale power-rate payments and charges collected from customers. Retail rates are set by the Commission.
Hetchy Power customers include San Francisco International Airport (SFO), libraries, police stations, City Hall, San Francisco Municipal Transportation Agency (SFMTA), San Francisco Port Authority, Treasure Island, Hunter’s Point Shipyard, and the Transbay Transit Center. Hetchy Power also owns, operates, and maintains approximately 60% of the streetlights in the City. Finally, Hetchy Power provides electrical maintenance services, energy efficiency programs, and distributed generation services to our customers.
CleanPowerSF, San Francisco’s CCA program, provides clean electricity supply to residents and businesses in San Francisco. Under this program, CleanPowerSF supplies customers with electricity from renewable sources like solar wind, and hydro power. Pacific Gas & Electric Company (PG&E) delivers the energy via their electrical grid. CleanPowerSF’s Green product features at least 50% California Renewables Portfolio Standard (RPS) certified renewable energy, and its SuperGreen product offers 100% California RPS-certified renewable energy.
CleanPowerSF serves more than 380,000 customer accounts in San Francisco. Collectively, Hetchy Power and CleanPowerSF meet more than 70% of the electricity demand in San Francisco with clean power.
6 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
Mission, Vision, and Values
The mission of the San Francisco Public Utilities Commission (SFPUC or the Commission) is to provide our customers with high-quality, efficient, and reliable water, power, and wastewater services in a manner that is inclusive of environmental and community interests, and sustains the resources entrusted to the SFPUC’s care.
SFPUC values sustainability as a fundamental business principle, exemplified through the adoption of an agency-wide strategic sustainability plan to ingrain the values of a sustainable future into our agency’s core processes. The SFPUC is a sustainable utility leader, recognized for superior levels in service, value, environmental stewardship and innovation. Most importantly we value our workforce and community as reflected in the core values adopted by our organization.
• Communication: Listen and communicate honestly and openly. • Diversity: Valuing a workforce that reflects all manner of views, experiences, backgrounds, and talents, and recognize it is vital to the SFPUC success.
• Equal Opportunity: Provide opportunities to all staff to contribute and reach their potential. To achieve this, the SFPUC must be a learning organization.
• Excellence: Strive for personal and professional excellence, and recognize exemplary performance by seeking continuous improvement.
• Inclusiveness: Provide access and transparency to stakeholders and community members. • Respect: Understand and appreciate the inherent value of the SFPUC’s staff, customers, and community. • Safety: Take the health and safety of the SFPUC’s employees, customers, and communities seriously. • Service: Focus on customer satisfaction, health, and safety. • Stewardship: Responsibly manage the resources entrusted to the SFPUC’s care. • Teamwork: Support a cooperative work environment; the SFPUC team is strengthened by the diversity and contributions of its members.
• Trust: Act with honesty, integrity, and fairness.
7 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
8 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
Organizational Chart as of June 2025
Note: AGM is Assistant General Manager, the person who leads an Enterprise or Bureau.
9 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
The Agency Strategic Plan is a high-level and future-oriented plan. The purpose is to better align the work of the Water, Wastewater and Hetch Hetchy (Hetchy Water and Hetchy Power) and CleanPowerSF Enterprises, set a strategic direction and identify key priorities.
The Agency Strategic Plan outlines the mission, vision and values and sets forth 6 priority goals and supporting objectives.
The goals are as follows:
• Reliable service and assets;
• Organizational excellence;
• Effective workforce;
• Financial sustainability;
• Stakeholder and community interest; and
• Environmental stewardship
Each Goal has one or more Executive Champions
who have worked across the Enterprises,
Infrastructure, and the Bureaus to develop
performance measures including target and baseline
metrics. There is a Lead Strategist for each of the six goal area who will carry the vision of their respective goal area will report biannually to the Goal
Champions on progress of achieving the
performance measures consistent with the
target/baseline. At the end of the fiscal year, each
Goal Champion is required to report performance
measured against the target/baseline. More details
of the 2020 SFPUC Strategic plan are
available at https://www.sfpuc.gov/about-us
/policies-
plans/agency-strategic-plan and the Performance
Measures in the Operating Information section of
this report.
Enterprise Risk Management Framework
The SFPUC helps ensure successful implementation of our Mission, Vision, and Values by integrating the principles of Enterprise Risk Management (ERM) into organizational culture and strategic decision making. In planning for our future, the ERM framework promotes a culture where risks are identified, assessed, prioritized, and managed to minimize threats
hindering us from achieving our goals; and to maximize
opportunities benefiting the SFPUC. Accountability and
transparency are promoted through assignment of identified risks to owners, and routine reporting of mitigation status to senior management. The ERM framework is a continuous
process that strengthens organizational structure and culture through communication and awareness. The Risk Management division provides support to the SFPUC’s journey from a traditional risk management approach towards enterprise risk management – emphasizing effective management of the total cost of risk and management of risk for better outcomes.
In fiscal years 2015 and 2016, respectively, the Power
Enterprise adopted and implemented the ISO 31000 standard for Enterprise Risk Management for the Hetchy Power and
CleanPowerSF program. The program enables systematic and proactive identification
and analysis of risks that threaten
We support a cooperative
strengthened by diversity.
We focus on customer integrity, and fairness.
satisfaction and innovation.
Inclusiveness
We provide access and
transparency to stakeholders
and community members.
We take the health and safety
of our employees, customers
and communities seriously.
We strive for personal excellence,
recognize exemplary performance,
and seek continuous improvement.
We responsibly manage the
resources entrusted to our
care in a sustainable manner.
We value a diverse workforce
that reflects all manner of views,
experiences, backgrounds and
talents, and recognize it is vital
to our success.
Establish the context
Risk assessment
Risk treatment
Risk evaluation
Risk analysis
Risk identification
Communicate and consult
Monitor and review
10 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
business objectives before they occur. Proper identification of risks to business objectives ensures mitigation measures can be implemented to reduce the probability of certain risks occurring or reducing negative impact.
Other prior applications of ERM at the SFPUC include supporting the Business Services Bureau, Emergency Planning and Security, and other specific PUC programs.
The SFPUC also utilizes other risk tools as part of a comprehensive risk management approach. This includes the SFPUC Purchased Insurance Program, a portfolio of insurance policies acquired to mitigate various liability risks to mission critical assets, operational and financial. Other risk management activities include contractual risk review, project specific risk assessments and advisement for the Infrastructure Project Management Bureau and Contract Management Bureau for construction, professional and general service contracts. SFPUC Risk Management also collaborates with the Office of the City Administrator’s Risk Management Division for citywide risk management initiatives.
Risk Categories
Strategic
Trends in Economy & Society
Financial
Effect of Market Forces on
Financial Assets or
Liabilities
Operational
People, Processes &
Systems or Controls
Legal/ Regulatory
Effect of Change in Laws
and Regulations
Insurable Hazards
Loss Exposures: Property,
Liability or Personnel
Our property insurance policy
covers select Mission Critical
Power Assets for all risks (e.g. fire,
flood up to $1 million, terrorism,
etc.) excluding specific
catastrophic perils (e.g.
earthquake, tsunami, war, etc.).
We have not purchased Business
Interruption insurance as the
property insurance ‘extra expense’
clause serves a similar purpose.
Overall, the SFPUC’s ERM initiatives are designed to reduce the chances of a negative outcome from occurring, lessen its impact, or transfer financial liabilities away from the organization. These initiatives can also increase opportunities and maximize the benefit from taking advantage of positive outcomes. A combination of these strategies will help lower the total cost of risk for the SFPUC and achieve both short and long-term benefits to our ratepayers.
Construction
Worker injury/illness
Third-party liability
Physical structure damage
Public Officials' liability
Employment liability
Stakeholders' interests
Public support/ Ratepayer fatigue
Competing expectations
Economic uncertainty
Long-term planning vs. budget limitations
Negative media coverage
Image and reputation
Bond rating
Debt obligations
Financial reporting
Cash flow/availability
Energy costs
Rate fatigue
HR and personnel risks
Operations disruption (e.g. construction,
utilities failure, procurement)
IT data / infrastructure compromise
Process / execution failure
Environmental
Aging infrastructure
Regulatory non-compliance with EPA,
WECC/NERC, GASB, OSHA,
government policy
Compliance with the WSA and WRR
Punitive damages, lawsuits
11 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
San Francisco’s Budget Process
The budget cycle for the biennial July 1 fiscal year budget begins in August and typically ends in July. The two-year fixed budget is prepared, reviewed, enacted by the Board of Supervisors, signed by the Mayor, and implemented by departments and adjusted as necessary during this period. The Board of Supervisors does not adopt a new budget for the second fiscal year of the cycle unless there are significant increases or decreases in revenues or expenditures which then reopen the budget to follow the usual budget process.
The SFPUC’s two-year budget is comprised of two, single-year spending plans, which supports the ongoing mission of the SFPUC to provide its customers with high-quality, efficient, and reliable water, wastewater, and power services in a manner that is inclusive of environmental and community interests, and that sustains the resources entrusted to our care. The budget is a detailed operating plan that identifies estimated costs and results in relation to estimated revenues and represents a process through which policy decisions are deliberated, implemented, and controlled. The budget aligns funding to accomplish our long-term strategic goals and objectives, ensures funding for our operating programs, and purposefully supports the Strategic Plan targeted outcomes to ensure the appropriate application of resources to reach our goals.
Budgeting Basis
The City adopts budgets for all government funds on a budget basis relying on a current financial resources measurement focus and a modified accrual basis of accounting. The modified accrual method is a basis of accounting used with a current financial resources measurement focus. It modifies the accrual basis of accounting in two significant ways: first, revenues are only recognized when they are measurable and available; second, expenditures are recognized in the period in which the SFPUC normally liquidates the related liability rather than when the liability is first incurred, if earlier. The City Charter prohibits expending funds for which there is no legal appropriation.
Accounting Basis
The accounts of the SFPUC Enterprises are organized by proprietary fund type, specifically an enterprise fund.
The activities of the Enterprises are accounted for with a separate set of self-balancing accounts that comprise the Enterprises’ assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues, and expenses. Enterprise funds account for activities that (1) are financed with debt secured solely by a pledge of the net revenues from fees and charges of the activity; or (2) are required by laws or regulations that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues; or (3) that the pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs.
The financial activities of each Enterprise and the year-end audited financial statements are accounted for on a flow of economic resources measurement focus, using the accrual basis of accounting. Under this method, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources associated with its operations are included on the Statement of Net Position; revenues are recorded when earned, and expenses recorded when liabilities are incurred. The SFPUC Enterprises apply all applicable Governmental Accounting Standards Board (GASB) pronouncements.
Fiscal Year 2026 Operating Budgets
The SFPUC annual budgets based on mid-year cycle, including debt service and cash-funded capital, as well as operating programs total $2.13 billion and $2.02 billion for fiscal years 2026 and 2025, respectively. The operating programs include regular operating costs, maintenance of utility facilities and lands, as well as support services, like management, business services, planning, regulatory compliance, communication, and planned debt service for each of the Enterprises. The budget increase is mainly driven by debt service and personnel cost. The debt service funds the SFPUC’s Capital Improvement Programs for the Water System Improvement Program (WSIP) and the Sewer System Improvement Program (SSIP). The operating budget is financed by both wholesale and retail rates, service charges and non-operating revenues, including rental income and interest earnings.
12 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
Of the SFPUC fiscal year 2026 $2.13 billion operating budget, the Water Enterprise accounts for $775.5 million to fund the operations and maintenance of the SFPUC’s water system; Wastewater Enterprise’s operating budget of $528.0 million funds the operations and maintenance of the SFPUC’s sewer system. Hetch Hetchy Water and Power’s operating budget of $382.5 million funds the operations and maintenance of the upcountry water and power systems, including Power Enterprise activities within the City. CleanPowerSF’s operating budget of $444.4 million funds the operations and power purchases. Detailed budget information is available under Annual Budget and Appropriation Ordinance, July 29, 2025 on the City’s website, https://www.sf.gov/budget-process-documents-for-fiscal-years-2026-2027 .
Fiscal Year 2026 Capital Budgets
Our capital programs are intended to reconstruct, replace, expand, repair, or improve facilities that are under the SFPUC’s jurisdiction. The capital budgets are coordinated with the Ten-Year Capital Improvement Plan and the Ten-Year Financial Plan. The issuance of revenue bonds, other forms of indebtedness, and the execution of governmental loans are provided under the San Francisco City Charter to finance our capital programs. The repayment of this indebtedness is provided through rates and service charge revenues of the SFPUC that incurs the debt and benefits from the underlying capital improvements. The budget appropriations for capital programs are coordinated with the SFPUC’s Ten-Year Capital and Ten-Year Financial Plans. The SFPUC develops stand-alone supplemental appropriations for our capital program which are coordinated with our operating budget review and approval cycle.
Total approved capital budgets were $1.57 billion and $1.55 billion for fiscal year 2026 and 2025, respectively. Of the $1.57 billion capital budget, the Water Enterprise accounts for $477.2 million with $21.2 million increase or 5%. The Wastewater Enterprise accounts for $822.9 million with $69.6 million decrease or 8%. Hetch Hetchy Water and Power Enterprise accounts for $266.2 million with $61.4 million increase or 30%. CleanPowerSF accounts for $0.5 million with a $0.1 million decrease or 17%.
Water Treatment Program, which is to provide renewal and replacement programs at the Sunol Valley and Harry Tracy Water Treatment Plant Ozone project. The Water Transmission Program includes pipeline inspections and repairs, valve replacements and pump station and vault upgrades. The Regional Buildings and Grounds includes major improvements to the Millbrae Yard. Millbrae Campus Improvements include a new laboratory and office building to update the lab facilities and consolidate staff from the Burlingame facility. Water Supply and Storage Program includes upgrades to structures to meet State Division of Safety of Dams requirements, and projects to increase regional water supply diversification and explore alternative methods for expanding water sources. The Water Conveyance/Distribution System Program includes funding to install, replace and renew distribution system pipelines and service connection for over 1,000 miles of drinking water mains in San Francisco. Local Buildings and Grounds Improvements includes the new City Distribution Division (CDD) headquarter at 2000 Marin.
The Wastewater Enterprise’s major capital investment from the Sewer System Improvement Program (SSIP) includes the Treatment Facilities Programs, including the Southeast Plant (SEP) Biosolid Digester Facility, improvement to the liquid treatment at the SEP, the North Point Wet Weather Facility, the North Shore Pump Station, and associated outfalls. The New Operations Engineering and Maintenance Buildings project will provide workshop space for the Trades and Mechanical Maintenance, engineering workspaces and shower and locker facilities for the Plant. SEP Mainstream Nutrient Reduction project is to reduce the amount of nitrogen discharged from the SEP to comply with anticipated future nitrogen-related regulations. The Stormwater Management and Flood Resilience program includes work on flood resilience planning and project implementations.
The Hetch Hetchy Water and Power’s major capital investment includes projects to sustain the reliability of the San Joaquin Pipeline System, generator rehabilitation and power plan system upgrades for the Moccasin Powerhouse. Other projects include, Transmission Lines Clearance Mitigation Project, Cherry Eleanor Pumps upgrade and replacement, Eleanor Dam and Moccasin Penstock Rehabilitations. Moccasin Dam and Reservoir Long Term Improvements will fund the construction of a new concrete spillway and additional flood protection to the Moccasin project facilities. The Transmission and Distribution program is to provide electric service to new City facilities, and redevelopment projects. The San Francisco Airport (SFO) Substation Improvements project will ensure continued power supply to meet the growing demands of the airport. The Distribution Interface Redevelopment Projects include design and construction of new electric distribution system and facilities to various new developments within San Francisco.
13 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
The CleanPowerSF major capital investment includes the development of new renewable energy (solar photovoltaic) and battery storage projects on select SFPUC sites. The project has six major phases including:
Planning, Request for Proposals, Construction and Commissioning, Power Purchase Agreements (PPA), Asset Management, and Project Buyout. The initial renewable energy facilities developed under this program would be structured as PPA with third parties that would develop and operate the projects for an initial period. The PPAs would include a buy-out option for the City.
Ten-Year Financial Plan
The SFPUC prepares an annual updated Ten-Year Financial Plan as required by the City and County of San Francisco Charter Section 8B.123. The Ten-Year Financial Plan is a summary of projected revenues, expenditures, fund balances, and financial metrics for each Enterprise over a rolling 10-year period. The Financial Plan projections are based on current Mayor and Commission policies, goals, and objectives. For the Financial plan fiscal year 2026, costs are anticipated to increase for each Enterprise on average from 1.9% to
8.9%, mainly due to capital investments and power supply cost. The SFPUC remains committed to financial sustainability. Adopted financial policies, including the Debt Service Coverage Policy, Fund Balance Reserve Policy, and Capital Financing Policy set targets for our long-term financial planning, while the San Francisco Charter requires the agency to establish rates sufficient to maintain high bond ratings. Prudent financial planning is increasingly important as the utility industry as a whole faces growing challenges, including climate change, an uncertain economy, regulatory complexity, and aging infrastructure.
Ten-Year Capital Plan
The SFPUC prepares an annual updated Ten-Year Capital Plan as required by the City and County of San Francisco Charter Section 3.20. The Capital Plan is to contain a list of projects to be executed during the 10-year planning horizon, including cost estimates and schedules. Both the Ten-Year Financial Plan and Capital Plan, serve as a basis and supporting documentation for the Commission’s capital budget and issuance of revenue bonds and other indebtedness to support the SFPUC capital program.
The SFPUC Ten-Year Capital Plan for fiscal years 2026 through 2035 totals $11.1 billion, represents a 6% decrease from last fiscal year’s proposed expenditures of $11.8 billion. The decrease is mainly due to outyear appropriation for the Wastewater Enterprise being significantly less than the nearer term appropriation needs, Water Enterprise removing various projects such as the Daly City Recycled Water Expansion and Los Vaqueros Reservoir Expansion projects.
Financial Transparency, Reporting and Auditing Process
This report was prepared by SFPUC Financial Services in conformance with the principles and standards for financial reporting set forth by the U.S. Generally Accepted Accounting Principles (GAAP). Recommended guidelines by the Government Finance Officers Association of the United States and Canada were also followed.
The SFPUC’s management is responsible for both the accuracy of the data presented and the completeness and fairness of its presentation, including all disclosures. The existing comprehensive structure on internal controls in the City and SFPUC ensures that the financial statements are free of any material misstatements.
This report is accurate in all material respects, and it is presented in a manner designed to set forth fairly the financial position and the results of operations of the SFPUC. The included disclosures enable the reader to gain a thorough understanding of the SFPUC’s financial activities.
The SFPUC’s financial statements have been audited by Macias Gini & O’Connell LLP, an independent registered public accounting firm. The goal of the independent audit was to provide reasonable assurance that the financial statements of the SFPUC for the fiscal years ended June 30, 2025 and 2024 are fairly presented in conformity with GAAP and are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statements presentation. The independent auditors rendered an unmodified (clean) opinion for SFPUC’s financial statements fiscal year ended June 30, 2025, which has also been achieved since 2008. The independent auditor’s report is presented as the first component of the financial section of this report.
Management’s Discussion and Analysis (MDA) is presented after the independent auditor’s report, and provides a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement MDA and should be read in conjunction with it.
14 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
Financial Authority and Policies
The City is a Charter City under the California Constitution, and as a result, the Charter is the guiding document for financial authority and policies for City departments. The SFPUC is the department responsible for the maintenance, operation, and development of the three utility enterprises’: the Water Enterprise, the Wastewater Enterprise, Hetch Hetchy Water and Power and CleanPowerSF. Each of the SFPUC’s enterprise fund is operated and managed as a separate financial entity and separate enterprise entity. The SFPUC’s financial policies, adopted and updated such as fund balance budgetary reserve and debt service coverage requirements are available on our website https://www.sfpuc.gov/about-us/policies-plans/financial-plans-and-policies . The
purpose and source for each of the designated budgetary reserves within its major funds of operating, capital projects, debt service, and trust are included in these guidelines which enable restricting funds for future infrastructure needs, replacement of aging facilities, bond reserves, and various operating reserves to mitigate unexpected occurrences. These budgetary reserves are critical to the SFPUC’s financial strength and high bond ratings. Further, the City has a long-standing practice of recognizing and reserving for known and anticipated liabilities. The City also has established an irrevocable trust for other postemployment benefits (also known as retiree medical) and continues to make the annual required contribution to ensure this future obligation is funded.
Accounting Systems, Policies, and Internal Controls
In developing and maintaining the accounting systems, consideration is given by the administration as to the adequacy of internal controls. Internal controls are designed to provide reasonable, but not absolute, assurance.
The SFPUC’s management is responsible for establishing and maintaining a system of internal controls designed to safeguard the Enterprises’ assets from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in accordance with GAAP. For the fiscal year ended June 30, 2025, the independent auditors noted no matters involving internal controls over financial reporting that would be considered a material weakness for Water, Wastewater and Hetch Hetchy Water and Power and CleanPowerSF.
The SFPUC’s Finance Services Bureau is responsible for providing comprehensive financial services for the utility enterprises and bureaus, including support for financial accounting and reporting, accounts payable, billing and collection of water, wastewater, and power charges, and other revenues. The SFPUC’s financial statements and records are maintained on an enterprise basis using the accrual method of accounting to ensure the timely matching of revenues against the costs of providing services. Revenues and expenses are recorded in the period in which the revenues are earned, and the expenses are incurred.
Achievement Awards
The Government Finance Officers Association of the United States and Canada (GFOA) awarded the Certificate of Achievement for Excellence in Financial Reporting to the SFPUC for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2024. This was the 16th consecutive year that the SFPUC has achieved this prestigious award. In order to be awarded the Certificate of Achievement, a government or reporting entity must publish an easily readable and efficiently organized Annual Comprehensive Financial Report. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to GFOA to determine its eligibility for another certificate.
15 Introductory Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City and County of San Francisco
Public Utilities Commission
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2024
Executive Director/CEO
16 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
Financial Section
Independent Auditor’s Report
Management’s Discussion and Analysis (Unaudited)
Basic Financial Statements
Statements of Net Position – Proprietary Funds
Statements of Revenues, Expenses, and Changes in Net Position – Proprietary Funds
Statements of Cash Flows – Proprietary Funds
Notes to Basic Financial Statements
Required Supplementary Information (Unaudited)
Schedules of the Proportionate Share of the Net Pension (Asset)/Liability Schedules of Employer Contributions – Pension Plan
Schedules of Changes in Total Pension Liability and Related Ratios – Replacement Benefits Plan
Schedules of Changes in Other Postemployment Benefits Liability and related Ratios - Other Postemployment Healthcare Benefits Plan Schedules of Employer Contributions – Other Postemployment Healthcare Benefits Plan
Supplementary Information (Proprietary Funds)
Schedule of Changes in Net Position – Dollar and Percentage Change vs. Prior Year
Schedule of Changes in Revenues, Expenses, and Net Position – Dollar and Percentage Change vs. Prior Year
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards
The San Francisco Public Utilities Commission
An Enterprise Department of the City and County of San Francisco, California 17 F in ancial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025 Ind
ependent Auditor’s Report
The San Francisco Public Utilities Commission, the
Honorable Mayor, and the Board of Supervisors of
City and County of San Francisco, California
Opinions
We have audited the financial statements of the business-type activities and each major fund of the San Francisco Public Utilities Commission (SFPUC), as of and for the years ended June 30, 2025 and 2024, and the related notes to the financial statements, which collectively comprise the SFPUC’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and each major fund of the SFPUC as of June 30, 2025 and 2024, and the respective changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States ( Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the SFPUC, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements of the SFPUC are intended to present the financial position, the changes in financial position, and, where applicable, cash flows of only that portion of the business-type activities and each major fund of the City and County of San Francisco, California (City) that is attributable to the transactions of the SFPUC. They do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2025 and 2024, the changes in its financial position, or, where applicable, its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.
Responsibilities of Management for the Financial Statements The SFPUC’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes www.mgocpa.com Macias Gini & O’Connell LLP
2121 N. California Blvd., Suite 750
Walnut Creek, CA 94596
18 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025 our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the SFPUC’S internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedules of the proportionate share of the net pension (asset)/liability, schedules of employer contributions – pension plan, schedules of changes in total pension liability and related ratios – replacement benefits plan, schedules of changes in other postemployment benefits liability and related ratios – other postemployment healthcare benefits plan, and schedules of employer contributions – other postemployment healthcare benefit plan, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audits of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the SFPUC’s basic financial statements. The schedule of changes in net position – dollar and percentage change vs. prior year and schedule of changes in revenues, expenses, and net position – dollar and percentage change vs. prior year are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and
19 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025 reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, these schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
The SFPUC’s management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 10, 2025 on our consideration of the SFPUC’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the SFPUC’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the SFPUC’s internal control over financial reporting and compliance.
Walnut Creek, California
December 10, 2025
20 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
This section presents management’s analysis of the San Francisco Public Utilities Commission’s (SFPUC or the Commission) financial condition and activities as of and for the years ended June 30, 2025 and 2024 .
Management’s Discussion and Analysis (MDA) is intended to serve as an introduction to SFPUC’s financial statements. This information should be read in conjunction with the audited financial statements that follow this section. All dollar amounts, unless otherwise noted, are expressed in thousands of dollars.
The information in this MDA is presented under the following headings:
● Organization and Business
● Overview of the Financial Statements
● Fund Financial Statements
● Financial Analysis
● Capital Assets
● Debt Administration
● Rates and Charges
● Request for Information
Organization and Business
The SFPUC is a department of the City and County of San Francisco (the City) that is responsible for the maintenance, operation, and development of three utility enterprises and five funds. The three utility enterprises include Water, Wastewater, Hetch Hetchy Water and Power and CleanPowerSF.
Water Enterprise
The Water Enterprise collects, transmits, treats, and distributes high quality drinking water to a total population of approximately 2.7 million people, including retail customers in the City and wholesale customers located in San Mateo, Santa Clara, and Alameda Counties. The Water Enterprise sold approximately 1 82 million gallons of water per day in the year ended June 30, 2025 . Approximately 70% of the water delivered by the Water Enterprise is to wholesale customers. Retail customers use the remaining 30% and are primarily San Francisco consumers, including residential, commercial, industrial, and governmental users. Wholesale customers include cities, water districts, one private utility, and one non -profit university. Service to these customers is provided pursuant to the 25-year Amended and Restated Water Supply Agreement (WSA), commenced on July 1, 2009, which established the basis for determining the costs of wholesale service.
Wastewater Enterprise
The primary responsibility of the Wastewater Enterprise is to protect the public health and the surrounding bay and ocean receiving waters by collecting, transmitting, treating, and discharging storm and sanitary flows generated in the service area. This includes 1,139 miles of combined, sanitary, and storm collection system pipes including:
gravity mains, force mains, culverts, transport storage boxes, and tunnels. San Francisco is the only coastal city in California with a combined sewer system that collects both wastewater and stormwater in the same network of pipes and provides treatment to remove harmful pollutants before discharging into the San Francisco Bay and Pacific Ocean. In addition, the Wastewater Enterprise serves on a contractual basis certain municipal customers located outside of the City limits, including the North San Mateo County Sanitation District No. 3, Bayshore Sanitary District, and the City of Brisbane. The Wastewater Enterprise recovers costs of service through user fees based on the volume and strength of sanitary flow. As of June 30, 2025 , the Wastewater Enterprise serves 149,672 residential accounts, which discharge about 15. 9 million units of sanitary flow per year (measured in hundreds of cubic feet, or ccf) and 32,010 non-residential accounts, which discharge about 5.8 million ccf per year.
These reflected an increase of 0.67 million discharge units for residential accounts and 0.15 million discharge units for non-residential accounts, resulting from account growth of 217 and 4,367, respectively, compared to prior year. 21 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Water
For efficiency and to streamline the coordination of upcountry water and power operations, Hetchy Water operates upcountry and joint asset facilities, managing resources in an environmentally responsible manner to a high standard of safety and reliability while meeting regulatory requirements. It is responsible for operating the Hetch Hetchy Reservoir, the main source of water for the Hetch Hetchy system. Hetchy Water operates, maintains, and improves water and power facilities, smaller dams and reservoirs, water transmission systems, power generation facilities, and power transmission assets, including transmission lines to the Newark substation. Hetchy Water delivers high-quality water from upcountry downhill to the Bay Area while optimizing the resulting generation of clean hydropower as water is transported through the system. It maintains land and properties consistent with public health and neighborhood concerns.
Hetchy Power
Hetchy Power is San Francisco’s publicly owned utility which provides 100% greenhouse gas-free electric power to serve the City and County of San Francisco’s municipal customers, other commercial and residential developments. It includes approximately 160 miles of transmission lines from Yosemite to the Bay Area and nearly 400 megawatts of generation capacity. Hetch Hetchy Power is a full -service retail electric program serving approximately 20% of the City’s load and over 6,000 customer accounts.
Hetchy Power’s portfolio consists of hydroelectric generation, onsite solar at SFPUC and other City facilities, generation using bio -methane produced at SFPUC wastewater treatment facilities, and third- party purchases.
Consistent with its commitment to address environmental concerns and community objectives, Hetchy Power continues to expand its resource base to include distributed generation as well as energy efficiency and transportation and building decarbonization programs. As part of its mission and core functions, Hetchy Power provides reliable energy services at reasonable cost to customers.
Hetch Hetchy Joint
A portion of Hetch Hetchy’s operating budget, capital program, and assets, provides benefit to both Hetchy Power and Hetchy Water. This is commonly referred to as joint costs and joint assets. Both operating and capital costs that jointly benefit both funds are allocated 55% to Hetchy Power and 45% to Hetchy Water, as has historically been done by the SFPUC.
CleanPowerSF
CleanPowerSF is San Francisco’s community choice aggregation (CCA) program operated by the SFPUC. CCA programs were made possible by the 2002 passage of California Assembly Bill 117, enabling communities to generate and purchase power on behalf of their residents and businesses and creating retail competition for power supply services. CleanPowerSF began serving customers with power generation in May 2016. CleanPowerSF’s core business is to provide greener electricity supply to residential and commercial consumers that are retail distribution customers of Pacific Gas and Electric Company (PG&E) in San Francisco. The SFPUC operates CleanPowerSF as a financially independent service, with the ability to set rates and charges with adequate revenues, and to issue debt to support its operations and future projects, as needed. CleanPowerSF is discretely presented as a fund of the Enterprise starting fiscal year 2017.
CleanPowerSF offers affordable and competitive electricity generation rates with a diverse electricity resource portfolio that is comprised of renewable and other clean sources of supply. The program serves more than 380,000 customer accounts and provides San Francisco with an electricity supply from its default “Green” product that is sourced from at least 50% California State Renewables Portfolio Standard (RPS) -eligible resources. Additionally, CleanPowerSF offers “SuperGreen”, a 100% RPS -eligible electricity supply, that is available to customers for a small additional cost. On June 1, 2022, CleanPowerSF opened enrollment for its “SuperGreen Saver” product, which provides eligible low-income ratepayers residing in neighborhoods that meet the State of California’s criteria as Disadvantaged Communities with 100% RPS-eligible electricity at a 20% bill discount.
22 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Overview of the Financial Statements
The Department’s financial statements include the following:
Statements of Net Position present information on the Department’s assets, deferred outflows, liabilities, and deferred inflows as of year-end, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Department is improving or worsening.
While the Statements of Net Position provide information about the nature and amount of resources and obligations at year-end, the Statements of Revenues, Expenses, and Changes in Net Position present the results of the Department’s operations over the course of the fiscal year and information as to how the net position changed during the year. These statements can be used as an indicator of the extent to which the Department has successfully recovered its costs through user fees and other charges. All changes in net position are reported during the period in which the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in these statements from some items that will result in cash flows in future fiscal periods, such as delayed collection of operating revenues and the expenses of employee earned but unused vacation leave.
The Statements of Cash Flows present changes in cash and cash equivalents resulting from operational, capital financing, non- capital financing, and investing activities. These statements summarize the annual flow of cash receipts and cash payments, without consideration of the timing of the event giving rise to the obligation or receipt, and exclude non-cash accounting measures of depreciation or amortization of assets.
The Notes to Financial Statements provide information that is essential to a full understanding of the financial statements that is not presented on the face of the financial statements.
Fund Financial Statements
The Department has five funds: Water, Wastewater, Hetchy Water, Hetchy Power, and CleanPowerSF.
Financial Analysis
Financial Highlights for Fiscal Year 2025
Department-wide Business Type Activities
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $3,292,239.
● Total assets exceeded total liabilities by $3,137,845. ● Net position increased by $211,561 or 6.9% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization, increased by $1,074,361 or 8.8% to $13,336,489.
● Current and other assets increased by $568,715 or 27.3%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $108,929 or 6.4% to $1,811,298.
● Operating expenses decreased by $127,196 or 8.2% to $1,423,674.
Water
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $782,738.
● Total assets exceeded total liabilities by $687,077.
● Net position increased by $49,632 or 6.8% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization increased by $212,832 or 3.7% to $5,991,299.
● Current and other assets increased by $1,003 or 0.1%. 23 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $1,747 or 0.3% to $678,637.
● Operating expenses decreased by $35,191 or 6.6% to $495,463.
Wastewater
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $1,354,939.
● Total assets exceeded total liabilities by $1,323,663. ● Net position increased by $31,303 or 2.4% during the year. ● Capital assets, net of accumulated depreciation and amortization, increased by $796,443 or 14.5% to $6,284,853.
● Current and other assets increased by $435,577 or 75.4%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $36,150 or 9.2% to $431,191.
● Operating expenses decreased by $170,610 or 36.8% to $292,481.
Hetchy Water
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $339,957.
● Total assets exceeded total liabilities by $328,268.
● Net position increased by $60,014 or 21.4% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization, increased by $12,844 or 5.4% to $250,330.
● Current and other assets increased by $46,373 or 56.8%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $3,719 or 7.5% to $53,211.
● Operating expenses increased by $1,062 or 2.4% to $45,471.
Hetchy Power
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $567,986.
● Total assets exceeded total liabilities by $553,699.
● Net position increased by $2,135 or 0.4% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization, increased by $52,169 or 6.9% to $809,921.
● Current and other assets increased by $55,828 or 16.9%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $4,111 or 1.9% to $218,463.
● Operating expenses increased by $16,918 or 8.4% to $218,081.
CleanPowerSF
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $246,619.
● Total assets exceeded total liabilities by $245,138.
● Net position increased by $68,477 or 38.4% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization, increased by $73 or 561.5% to $86. ● Current and other assets increased by $67,642 or 30.1%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $63,202 or 17.2% to $429,796.
● Operating expenses increased by $60,625 or 19.5% to $372,178. 24 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Financial Highlights for Fiscal Year 2024*
Department-wide Business Type Activities
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $3,080,678.
● Total assets exceeded total liabilities by $2,915,075. ● Net position increased by $79,292 or 2.6% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization, increased by $1,055,526 or 9.4% to $12,262,128.
● Current and other assets increased by $272,251 or 15.1%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $63,865 or 3.9% to $1,702,369.
● Operating expenses increased by $292,924 or 23.3% to $1,550,870.
Water
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $733,106.
● Total assets exceeded total liabilities by $624,496. ● Net position increased by $41,033 or 5.9% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization increased by $125,515 or 2.2% to $5,778,467.
● Current and other assets increased by $174,613 or 25.3% mainly due to increases of reimbursements receivable relating to the Mountain Tunnel Improvement project for Clean Water State Revolving Funds (SRF) Loans and restricted cash from the issuances of the 2023 Series AB and 2023 Series CD bonds. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, decreased by $14,201 or 2.1% to $676,890.
● Operating expenses increased by $70,401 or 15.3% to $530,654.
Wastewater
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $1,323,636.
● Total assets exceeded total liabilities by $1,289,457. ● Net position decreased by $75,198 or 5.4% during the year. ● Capital assets, net of accumulated depreciation and amortization, increased by $802,064 or 17.1% to $5,488,410.
● Current and other assets increased by $3,551 or 0.6%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $31,105 or 8.5% to $395,041.
● Operating expenses increased by $201,741 or 77.2% to $463,091.
Hetchy Water
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $279,943.
● Total assets exceeded total liabilities by $269,661.
● Net position increased by $5,815 or 2.1% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization, increased by $17,450 or 7.9% to $237,486.
● Current and other assets decreased by $9,225 or 10.2%. ● Operating revenues, excluding interest and investment income, and other non- operating revenues, decreased by $3,205 or 6.1% to $49,492.
● Operating expenses, excluding interest expenses decreased by $5,602 or 11.2% to $44,409.
25 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Power
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $565,851.
● Total assets exceeded total liabilities by $553,285.
● Net position increased by $47,501 or 9.2% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization, increased by $110,514 or 17.1% to $757,752.
● Current and other assets increased by $36,405 or 12.4%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $10,349 or 5.1% to $214,352.
● Operating expenses, excluding interest expenses, other non -operating expenses, and amortization of premium, discount, and issuance costs, increased by $9,611 or 5.0% to $201,163
CleanPowerSF
● Total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $178,142.
● Total assets exceeded total liabilities by $178,176.
● Net position increased by $60,141 or 51.0% during the fiscal year. ● Capital assets, net of accumulated depreciation and amortization, decreased by $17 or 56.7% to $13. ● Current and other assets increased by $66,794 or 42.3%. ● Operating revenues, excluding interest and investment income, and other non-operating revenues, increased by $39,817 or 12.2% to $366,594.
● Operating expenses, excluding interest expenses increased by $16,773 or 5.7% to $311,553.
*The financial highlights for fiscal year 2024 were updated to reflect the restatements from Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences.
26 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Financial Position
Department-wide Business Type Activities
The following table summarizes the department-wide changes in net position. Detailed discussion follows for each proprietary fund.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences. ** Eliminated interfund payables and receivables of $37,822 between Water and Hetchy Power for the State Revolving fund loan for Mountain Tunnel project for fiscal year 2025 and $291, $405 and $518 between Wastewater and Hetchy Power for the 525 Golden Gate Avenue Headquarters construction cost in fiscal years 2025, 2024 and 2023, respectively.
Restated 2025 - 2024 2 024 - 2023
2025 2024* 2023 Change Change
Total assets:
Current and other assets ** $ 2 ,648,713 2,079,998 1,807,747 568,715 272,251 13,336,489 12,262,128 11,206,602 1,074,361 1,055,526 Total assets 15,985,202 14,342,126 13,014,349 1,643,076 1,327,777 Deferred outflows of resources:
Unamortized loss on refunding of debt 82,711 89,186 124,643 (6,475) (35,457) Pensions 174,202 164,907 123,669 9,295 41,238
Other postemployment benefits 46,168 50,876 48,335 (4,708) 2,541 Total deferred outflows of resources 303,081 304,969 296,647 (1,888) 8,322 Liabilities:
Current liabilities:
Arbitrage rebate payable 826 — — 826 —
Bonds 181,458 177,109 164,755 4,349 12,354
Certificates of participation 4,965 4,765 4,576 200 189 Commercial paper 189,333 280,654 — (91,321) 280,654
State revolving fund loans 6,419 5,629 2,526 790 3,103 Other liabilities ** 506,617 510,143 454,130 (3,526) 56,013 Subtotal current liabilities 889,618 978,300 625,987 (88,682) 352,313 Long-term liabilities:
Arbitrage rebate payable 5,746 9,574 188 (3,828) 9,386 Bonds 9,069,495 7,791,378 7,473,933 1,278,117 317,445 Revenue Notes — — 349,556 — (349,556)
Certificates of participation 115,245 120,210 124,974 (4,965) (4,764) State revolving fund loans 660,222 572,003 479,790 88,219 92,213 Commercial paper — 341,373 487,811 (341,373) (146,438) 1,394,652 922,431 122,357 472,221 800,074
Other liabilities ** 712,379 691,782 496,487 20,597 195,295 Subtotal long-term liabilities 11,957,739 10,448,751 9,535,096 1,508,988 913,655 Total liabilities:
Arbitrage rebate payable 6,572 9,574 188 (3,002) 9,386 Bonds 9,250,953 7,968,487 7,638,688 1,282,466 329,799 Revenue Notes — — 349,556 — (349,556)
Certificates of participation 120,210 124,975 129,550 (4,765) (4,575) Commercial paper 189,333 622,027 487,811 (432,694) 134,216 State revolving fund loans 666,641 577,632 482,316 89,009 95,316 1,394,652 922,431 122,357 472,221 800,074
Other liabilities 1,218,996 1,201,925 950,617 17,071 251,308 Total liabilities 12,847,357 11,427,051 10,161,083 1,420,306 1,265,968 Deferred inflows of resources:
Unamortized gain on refunding of debt 64,716 42,109 11,353 22,607 30,756 Leases 34,189 37,786 43,011 (3,597) (5,225)
Pensions 11,881 22,598 49,027 (10,717) (26,429)
Other postemployment benefits 37,901 36,873 45,136 1,028 (8,263) Total deferred inflows of resources 148,687 139,366 148,527 9,321 (9,161) Net position:
Net investment in capital assets 2,079,779 2,075,817 2,098,355 3,962 (22,538) Restricted for debt service 7,465 44,724 18,191 (37,259) 26,533 Restricted for capital projects 339,670 292,369 142,641 47,301 149,728 Restricted for other purposes 5,772 — — 5,772 —
Unrestricted 859,553 667,768 742,199 191,785 (74,431) Total net position $ 3,292,239 3,080,678 3,001,386 211,561 79,292 Capital assets, net of accumulated
depreciation and amortization
Table 1
Business Type Activities
Comparative Condensed Net Position
June 30, 2025, 2024, and 2023
Water Infrastructure Finance and
Innovation Act (WIFIA) loans
Water Infrastructure Finance and
Innovation Act (WIFIA) loans
27 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The following table summarizes Water’s changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
Restated 2025 - 2024 2024 - 2023
2025 2024* 2023 Change Change
Total assets:
Current and other assets $ 866,693 865,690 691,077 1,003 174,613 5,991,299 5,778,467 5,652,952 212,832 125,515
Total assets 6,857,992 6,644,157 6,344,029 213,835 300,128 Deferred outflows of resources:
Unamortized loss on refunding of debt 82,711 89,186 124,635 (6,475) (35,449) Pensions 98,819 93,526 70,101 5,293 23,425
Other postemployment benefits 27,309 29,974 28,616 (2,665) 1,358 Total deferred outflows of resources 208,839 212,686 223,352 (3,847) (10,666) Liabilities:
Current liabilities:
Arbitrage rebate payable 536 — — 536 —
Revenue bonds 139,250 138,140 135,095 1,110 3,045
Certificates of participation 3,545 3,402 3,267 143 135 Commercial paper 20,000 190,000 — (170,000) 190,000
Other liabilities 190,100 157,052 148,547 33,048 8,505 Subtotal current liabilities 353,431 488,594 286,909 (135,163) 201,685 Long-term liabilities:
Arbitrage rebate payable 1,285 869 — 416 869
Revenue bonds 5,049,478 4,826,497 4,575,751 222,981 250,746 Certificates of participation 82,285 85,830 89,232 (3,545) (3,402) Commercial paper — — 371,459 — (371,459)
State revolving fund loans 300,035 259,970 163,627 40,065 96,343 Other liabilities 384,401 357,901 291,193 26,500 66,708 Subtotal long-term liabilities 5,817,484 5,531,067 5,491,262 286,417 39,805 Total liabilities:
Arbitrage rebate payable 1,821 869 — 952 869
Revenue bonds 5,188,728 4,964,637 4,710,846 224,091 253,791 Certificates of participation 85,830 89,232 92,499 (3,402) (3,267) Commercial paper 20,000 190,000 371,459 (170,000) (181,459) State revolving fund loans 300,035 259,970 163,627 40,065 96,343 Other liabilities 574,501 514,953 439,740 59,548 75,213 Total liabilities 6,170,915 6,019,661 5,778,171 151,254 241,490 Deferred inflows of resources:
Unamortized gain on refunding of debt 49,499 31,854 — 17,645 31,854 Leases 33,235 36,583 41,558 (3,348) (4,975)
Pensions 7,050 13,305 28,504 (6,255) (15,199)
Other postemployment benefits 23,394 22,334 27,075 1,060 (4,741) Total deferred inflows of resources 113,178 104,076 97,137 9,102 6,939 Net position:
Net investment in capital assets 450,019 350,430 460,213 99,589 (109,783) Restricted for debt service 5,353 44,724 14,625 (39,371) 30,099 Restricted for capital projects 145,442 200,632 56,822 (55,190) 143,810 Unrestricted 181,924 137,320 160,413 44,604 (23,093) Total net position $ 782,738 733,106 692,073 49,632 41,033 Capital assets, net of accumulated
depreciation and amortization
Table 1A
Proprietary Fund – Water
Comparative Condensed Net Position
June 30, 2025, 2024, and 2023
28 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Water Net Position, Fiscal Year 2025
For the period ended June 30, 2025 , the Water Enterprise’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $782,738. Total net position increased from prior year by $49,632 or
6.8% (see Table 1A). Increases of $209,988 in assets and deferred outflows of resources, and increases of $160,356 in liabilities and deferred inflows of resources are described below.
Current and other assets are primarily comprised of restricted and unrestricted balances of cash, receivables for water deliveries and services, interest and lease receivables, interfund receivables due from other governmental agencies, prepaids, and inventory.
During the fiscal year 2025, current and other assets increased by $1,003 or 0.1%. The increases included $105,164 in unrestricted and restricted cash and investments mainly due to the issuances of 2025 Series DEF water revenue refunding bonds and commercial paper, and $37,827 in interfund receivables mainly from Hetch Hetchy Power for the Mountain Tunnel Improvement project. Other increases of $3,598 were mainly due to prepaids, advances and other receivables for software licensing, consulting, permits and subscription fees. These increases were offset by decreases of $105,774 from reimbursements received from the State Water Resources Control Board (SWRCB) State Revolving Funds (SRF) Loan relating to the Mountain Tunnel Improvement and SF Westside Recycled Water projects, $26,121 in Wholesale Balancing Account receivable (see Note 11 for details), $8,733 in charges for services receivable due to more receipts than billings, and $4,958 mainly in leases receivable, restricted and unrestricted interest and other receivables, and inventory.
Capital assets, net of accumulated depreciation and amortization, increased by $212,832 or 3.7% mainly from the Sunol Valley Water Treatment Plant Ozonation and New San Francisco Water Division Headquarters projects. The largest portion of the Water E nterprise’s net position of $450,019 or 57.5% represents net investment in capital assets (see the Capital Assets section of the MD &A for more information), which increased by $99,589 or 28.4% from the prior year’s $350,430. The change was explained by an increase of $212,832 in capital assets, offset by a $113,243 increase in liabilities mainly from the issuances of 2025 Series ABC, 2025 Series DEF bonds and additional commercial paper.
Deferred outflows of resources decreased by $3,847 due to a $6,475 decrease in unamortized loss on refunding of debt mainly from defeasance of refunding loss by the 2025 Series ABC revenue bonds and amortization and $2,665 decrease in other postemployment benefits (OPEB) based on actuarial estimates, offset by an increase of $5,293 from pensions based on actuarial estimates.
Total liabilities increased by $151,254. Increases included $224,091 in revenue bonds, of which increases of $1,511,695 in bond principal and $129,352 in premium were from issuances of 2025 Series ABC and 2025 Series DEF bonds, and $10 in bond discount from amortization. These increases were offset by decreases of $1,206,240 in bond principal and $41,467 in premium from refunding, $138,140 in bond principal from repayment, $30,621 in bond premium from amortization, and $498 in bond discount from issuances. Additional increases include $40,065 in SRF Loans payable due to additional loans relating to the Mountain Tunnel Improvement and SF Westside Recycled Water projects, $29,276 in restricted and unrestricted payables due to higher year end expense accruals for capital projects and operating activities as compared to prior year, $14,335 in pensions based on actuarial estimates, $12,983 in Wholesale Balancing Account (see Note 1 1 for details), $3,858 in accrued payroll mainly from cost of living adjustments for payroll and compensated absences mainly from the implementation of GASB Statement No. 101, Compensated Absences, and $3,674 in OPEB based on actuarial estimates. Other increases of $5,513 were mainly due to unearned revenues from customer deposits from more accounts. These increases were offset by decreases of $170,000 in commercial paper of which $312,400 was from refunding by the 2025 Series DEF revenue refunding bonds offset by $142,400 from additional issuances. Other decreases included $7,824 in damage claims based on the City Attorney and Controller’s Offices analysis, $3,402 in certificates of participation principal from repayment, and other decreases of $1,315 mainly from pollution remediation for the Lake Merced Pacific Rod and Gun Club (see Note 16(d) for more detail). Water Enterprise’s damage claim liability as of June 30, 2025 was estimated by using probable exposure information provided by the City Attorney’s Office and includes an estimate of incurred but not reported losses.
29 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Deferred inflows of resources increased by $9,102 due to increases of $17,645 in unamortized gain on refunding of debt mainly from the issuance of the 2025 Series ABC revenue refunding bonds and $1,060 in OPEB based on actuarial estimates, offset by decreases of $6,255 in pensions based on actuarial estimates and $3,348 in leases due to fewer leases.
Water Net Position, Fiscal Year 2024*
For the period ended June 30, 2024, the Water Enterprise’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $733,106. Total net position increased from prior year by $41,033 or
5.9% (see Table 1A ). Increases of $289,462 in assets and deferred outflows of resources, and increases of $248,429 in liabilities and deferred inflows of resources are described below.
Current and other assets are primarily comprised of restricted and unrestricted balances of cash, receivables for water deliveries and services, interest and lease receivables, interfund receivables due from other governmental agencies, prepaids, and inventory.
During the fiscal year 2024, current and other assets increased by $174,613 or 25.3%. The increases included $93,433 for reimbursements receivable from the State Water Resources Control Board (SWRCB) State Revolving Funds Loan relating to the SF Westside Recycled Water and the Mountain Tunnel Improvement projects, $53,237 in restricted and unrestricted cash and investments mainly due to the issuances of Series 2023 Series AB and 2023 Series CD bonds, $16,069 in Wholesale Balancing Account receivable (see Note 11 for details), $15,531 in charges for services receivable due to more billings than collections and adopted rate increases of 9.7% for wholesale customers and 5.0% for retail customers, $1,264 in interest receivable mainly due to higher interest rates, $505 in notes receivable from the sale of the Balboa Reservoir due to interest accruals, $366 due from other governments for a Federal Emergency Management Agency disaster cost recovery relating to the 2020 Wildfires Santa Clara Fence project, and $275 in restricted interest and other receivables mainly due to increases in capacity fees. These increases were offset by decreases of $4,567 in leases receivable due to payments received, $1,121 in prepaid expenses of multiple software licensing and membership fees, $366 in inventory due to more issuances than purchases during the fiscal year, and $13 for custom work projects due from the Department of Public Works (DPW).
Capital assets, net of accumulated depreciation and amortization, increased by $125,515 or 2.2% mainly from the San Joaquin Pipeline Valve and Safe Entry Improvement and Mountain Tunnel Improvement projects. The largest portion of the Water Enterprise’s net position of $350,430 or 46.7% represents net investment in capital assets (see the Capital Assets section of the MD&A for more information), which decreased by $109,783 or 23.9% from prior year’s $460,213. The change was explained by an increase of $235,298 in liabilities mainly from the issuances of 2023 Series AB and 2023 Series CD bonds, and additional State Revolving Funds Loans relating to the Mountain Tunnel Improvement and SF Westside Recycled Water projects, offset by an increase of $125,515 in capital assets mainly from additional assets placed into service.
Deferred outflows of resources decreased by $10,666 due to a decrease of $35,449 in unamortized loss on refunding of debt mainly from defeasance of refunding loss by the 2023 Series CD revenue refunding bonds, offset by increases of $23,425 from pensions and $1,358 in OPEB benefits based on actuarial estimates.
Total liabilities increased by $241,490 which was due to increases of $253,791 in outstanding revenue bonds mainly from the issuances of 2023 Series AB revenue bonds and 2023 Series CD revenue refunding bonds, $96,343 in SRF Loans payable due to additional loans relating to the Mountain Tunnel Improvement and SF Westside Recycled Water projects, $37,300 in pensions based on actuarial estimates, $18,597 in accrued payroll, vacation and sick leave from the implementation of GASB Statement No. 101, $9,700 in O PEB liabilities based on actuarial estimates, $6,442 in interest payable mainly from the issuances of 2023 Series AB revenue bonds and 2023 Series CD revenue refunding bonds, $3,148 in damage claims based on actuarial reports, $1,715 in restricted and unrestricted payables due to higher year end expense accruals for operating activities as compared to prior year, $1,267 in accrued workers’ compensation based on actuarial estimates, $1,073 in unearned revenues mainly for the water utility California state ar rearages relief grant received, and $869 in arbitrage rebate payable mainly for the 2023 Series A bonds. These increases were offset by decreases of $181,459 in commercial paper from refunding by the 2023 Series AB revenue bonds, $3,267 in certificates of participation from repayment and amortization of premium, $2,440 payment to San Francisco Municipal Transportation Agency (MTA) for a settlement payable relating to the Van Ness Corridor Transit Improvement project, $1,189 in leases liability due to 30 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
payments in the current year, and $400 in subscription liability from payments in the current year.
Deferred inflows of resources increased by $6,939 due to an increase of $31,854 in unamortized gain on refunding of debt from the issuance of 2023 Series CD revenue refunding bonds, offset by decreases of $15,199 related to pensions based on actuarial estimates, $4,975 in leases due to fewer leases, and $4,741 in OPEB benefits based on actuarial estimates.
*The fiscal year 2024 net position narrative was updated to reflect the restatement s from GASB Statement No. 101, Compensated Absences.
The following table summarizes Wastewater’s changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
Restated 2025 - 2024 2 024 - 2023
2025 2024* 2023 Change Change
Total assets:
Current and other assets $ 1 ,013,574 577,997 574,446 435,577 3,551 6,284,853 5,488,410 4,686,346 796,443 802,064
Total assets 7,298,427 6 ,066,407 5,260,792 1,232,020 805,615 Deferred outflows of resources:
Unamortized loss on refunding of debt — — 8 — (8)
Pensions 44,997 42,685 32,592 2,312 10,093
Other postemployment benefits 11,099 12,816 11,493 (1,717) 1,323 Total deferred outflows of resources 56,096 55,501 44,093 595 11,408 Liabilities:
Current liabilities:
Arbitrage rebate payable 290 — — 290 —
Revenue bonds 38,460 35,370 28,070 3,090 7,300
Certificates of participation 937 900 864 37 36
State revolving fund loans 6,419 5,629 2,526 790 3,103 Other liabilities 215,276 246,962 200,992 (31,686) 45,970 Subtotal current liabilities 261,382 288,861 232,452 (27,479) 56,409 Long-term liabilities:
Arbitrage rebate payable 4,254 8,521 188 (4,267) 8,333 Revenue bonds 3,710,386 2,649,681 2,708,840 1,060,705 (59,159) Revenue notes — — 349,556 — (349,556)
Certificates of participation 21,758 22,695 23,594 (937) (899) Commercial paper — 341,373 — (341,373) 341,373
State revolving fund loans 360,187 312,033 316,163 48,154 (4,130) 1,394,652 922,431 122,357 472,221 800,074
Other liabilities 222,145 231,355 121,786 (9,210) 109,569 Subtotal long-term liabilities 5,713,382 4,488,089 3,642,484 1,225,293 845,605 Total liabilities:
Arbitrage rebate payable 4,544 8,521 188 (3,977) 8,333 Revenue bonds 3,748,846 2,685,051 2,736,910 1,063,795 (51,859) Revenue notes — — 349,556 — (349,556)
Certificates of participation 22,695 23,595 24,458 (900) (863) Commercial paper — 341,373 — (341,373) 341,373
State revolving fund loans 366,606 317,662 318,689 48,944 (1,027) 1,394,652 922,431 122,357 472,221 800,074
Other liabilities 437,421 478,317 322,778 (40,896) 155,539 Total liabilities 5,974,764 4,776,950 3,874,936 1,197,814 902,014 Deferred inflows of resources:
Unamortized gain on refunding of debt 15,217 10,255 11,353 4,962 (1,098) Leases 954 1,203 1,453 (249) (250)
Pensions 2,172 4,055 10,023 (1,883) (5,968)
Other postemployment benefits 6,477 5,809 8,286 668 (2,477) Total deferred inflows of resources 24,820 21,322 31,115 3,498 (9,793) Net position:
Net investment in capital assets 1,039,359 1,148,814 1,110,957 (109,455) 37,857 Restricted for debt service 2,112 — 3,510 2,112 (3,510) Restricted for capital projects 140,768 31,782 53,137 108,986 (21,355) Unrestricted 172,700 143,040 231,230 29,660 (88,190) Total net position $ 1,354,939 1,323,636 1,398,834 31,303 (75,198) Water Infrastructure Finance and
Innovation Act (WIFIA) loans
Water Infrastructure Finance and
Innovation Act (WIFIA) loans
Capital assets, net of accumulated
depreciation and amortization
Table 1B
Proprietary Fund – Wastewater
Comparative Condensed Net Position
June 30, 2025, 2024, and 2023
31 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Net Position, Fiscal Year 2025
As of June 30, 2025 , the Wastewater Enterprise’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $1,354,939. The Wastewater Enterprise’s total net position increased by $31,303 or 2.4% from prior year. This change reflects increases of $108,986 in restricted for capital projects, $29,660 in unrestricted net position, and $2,112 in restricted for debt service, offset by a decrease of $109,455 in net investment in capital assets. The $1,232,615 increase in total assets and deferred outflows of resources, as well as the increase of $1,201,312 in total liabilities and deferred inflows of resources, are described below (see Table 1B).
During fiscal year 2025, current and other assets increased by $435,577 or 75.4%. The increase was primarily driven by a $404,591 increase in restricted and unrestricted cash and investments, resulting from proceeds of the 2024 Series ABCD revenue bonds issuance and new loans under the Water Infrastructure Finance and Innovation Act (WIFIA) and State Revolving Fund (SRF). Additional increases included a $30,301 rise in reimbursement receivables from the State Water Resources Control Board (SWRCB) for the Southeast Water Pollution Control Plant New Headworks (Grit) Replacement and OSP Digester Gas Utilization Upgrade projects; a $4,560 increase in restricted and unrestricted receivables and inventory, primarily due to higher interest receivables driven by elevated average annualized interest rates and cash balances; and a $2,097 increase in receivables from charges for services and prepaid expenses, net of allowance for uncollectible receivables, largely attributed to higher sales.
These increases were partially offset by a $5,972 decrease in other receivables, mainly due to a $7,370 payment received from the University of California, San Francisco (UCSF) and the Golden State Warriors (GSW) for their fair share contribution to the Mariposa Sanitary Pump Station Upgrade Project.
Capital assets, net of accumulated depreciation and amortization, increased by $796,443 or 14.5%, primarily due to expanded capital improvement activities and the right -to-use lease and subscription assets. The largest component of the Wastewater Enterprise’s net position $1,039,359 or 76.7%, represents net investment in capital assets (see the Capital Assets section of the MD&A for more information). Deferred outflows of resources increased by $595, resulting from a $2,312 rise in pension contributions, offset by a $1,717 reduction in other postemployment benefits.
Total liabilities increased by $1,197,814 or 25.1%. As of June 30, 2025, the outstanding balance of $5,532,799 for revenue bonds, certificate of participation (COP), SRF, and WIFIA loans represented 92.6% of total liabilities, an increase of $1,242,687 or 29.0%. This increase was driven by the issuances of 2024 Series ABCD revenue bonds totaling $1,217,971, which included an original issue premium of $74,996; $472,221 in new WIFIA loans, including $16,324 of capitalized interest; $55,221 in new SRF loans; and additions from commercial paper. These increases in outstanding debt were offset by $465,325 in defeasance and repayment of outstanding debt, as well as $37,401 in amortization and defeasance of revenue bond premiums (see Table 4B).
Other liabilities of $441,965, including arbitrage rebate payable, payables to vendors, contractors, and other government agencies for goods and services under contractual agreements, decreased by $44,873 or 9.2%. This is due to a $34,009 reduction in restricted and unrestricted payables to vendors and contractors mainly due to decreased capital project spending; $3,977 decrease in arbitrage rebate payable; and a $1,391 decrease resulting from revenue recognition of rental deposits, payments to other City departments, and a refund to the State for unspent Federal COVID -19 recovery pass -through grant funds under the California Water and Wastewater Arrearages Payment Program (CWWAPP). Additionally, there was a decrease of $36,310 in damage claims liability based on the analyses performed by the City Attorney’s Office and Controller’s Office and in pollution remediation obligation due to payments made for the Yosemite Creek Remediation Project. Wastewater’s damage claims liability as of June 30, 2025 was estimated by using probable exposure information provided by the City Attorney’s Office and includes an estimate of incurred but not reported losses. These reductions were offset by an increase of $13,666 in interest payable primarily related to the newly issued 2024 Series ABCD revenue bonds; an $8,816 increase in lease and subscription liabilities, and higher accrued payroll and workers’ compensation; and an increase of $8,332 in net pension and other postemployment benefits liability based on actuarial estimates.
Deferred inflows of resources increased by $3,498 due to an increase of $5,630 in the unamortized gain on refunding of debt by the 2024 ABCD revenue bonds and other postemployment benefits, offset by $2,132 decreases in pension and leases.
32 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Net Position, Fiscal Year 2024*
For the year ended June 30, 2024 , the Wastewater Enterprise’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $1,323,636. The Wastewater Enterprise’s total net position decreased by $75,198 or 5.4% from prior year, comprised of decreases of $88,190 in unrestricted net position, $21,355 in restricted for capital projects, and $3,510 in restricted for debt service offset by an increase of $37,857 in net investment in capital assets. Increases in total assets and deferred outflows of resources of $817,023 and increases of $878,418 in total liabilities and deferred inflows of resources are described below (see Table 1B).
During the fiscal year 2024, current and other assets increased by $3,551 or 0.6%. The increase was due to an $8,245 rise in charges for services resulting from a $10,835 increase in sewer charges receivable, as there were more billings than collections. This was offset by a $2,590 increase in allowance for doubtful accounts related to sewer charges receivable that were over 120 days old. Other increases included $7,558 in other receivable due to revenue accrual for the upgrades fair share contribution from the Golden State Warriors and the University of California, San Francisco for the Mariposa Project, $1,526 in unrestricted and restricted interest receivable due to higher average annualized interest rate, $458 in restricted and unrestricted cash and investments due to loan proceeds from Water Infrastructure Finance and Innovation Act (WIFIA) loans and commercial paper issuances offset by capital project spending and debt service principal and interest payments, $317 increase in inventory as there were more purchases than issuances during the year, $172 increase in capacity charges receivable, net of allowance for doubtful accounts, and $10 increase in custom work receivable. These increases were primarily offset by a $13,942 decrease in receivables from the State Water Resources Control Board (SWRCB), as a result of receipts from reimbursement requests for the Southeast Water Pollution Control Plant New Headworks (Grit) Replacement Project. Other decreases included $440 in prior year prepaid expenses recognized in current year, $212 in lease receivable, $46 in receivable from the Department of Public Works (DPW) for the Mission Bay South Project, $38 prepayments amortizations for the Civic Center Garage lease and the Mariposa Pump Station & Force Project, $32 decrease in Federal interest subsidy receivable, $22 in property rent receivable, and $3 in miscellaneous receivable.
Capital assets, net of accumulated depreciation and amortization, increased by $802,064 or 17.1% reflecting an increase in construction and capital improvement activities. The largest portion of the Wastewater Enterprise’s net position of $1,148,814 or 85.9%, represents net investment in capital assets (see the Capital Assets section of the MD&A for more information). Deferred outflows of resources increased by $11,408 mainly due to increases in pensions and other postemployment benefits of $10,093 and $1,323, respectively, based on actuarial report, offset by $8 amortization of the 2013 Series A bond refunding loss.
Total liabilities increased by $902,014 or 23.3%. As of June 30, 2024, total outstanding balance of $4,290,112 for revenue bonds, certificates of participation (COP), commercial paper, State Revolving Fund (SRF) loans, and WIFIA loans represented 90.1% of total liabilities, an increase of $738,142 or 20.8%. The increase was mainly due to $800,074 new WIFIA loans (included $7,506 of capitalized interest) for the Biosolids Digester Facilities Project and the Southeast Treatment Plant Improvement Project, $341 ,373 new issuance of commercial paper, and $1,498 SRF loan capitalized interest for the OSP Digester Gas Utilization Upgrade and SEP New Headworks (Grit) Replacement projects, offset by $347,465 defeasance of 2021 Series AB revenue notes by the WIFIA loans, principal repayments of $28,070 in bonds, $2,525 in SRF loans, and $863 in COP, and $25,880 in revenue bonds and notes premium amortization and defeasance. Other liabilities of $486,838, including arbitrage rebate payable, payables to vendors, contractor s, and other government agencies for goods and services under contractual agreements, increased by $163,872 or 50.7% due to increases of $110,733 in damage claims liability based on actuarial report, $17,750 in net pension liability based on actuarial report, $15,732 increase in employee related benefits including workers’ compensation, accrued payroll, vacation and sick leave from the implementation of GASB Statement No. 101, and 4.75% increase in cost of living adjustment (COLA), $8,549 in restricted and unrestricted payable to vendors and contractors mainly due to increased capital project spending, $8,333 in arbitrage rebate payable due to actuarial calculation, $4,488 in bond, loan, lease, and subscription interest payable mainly due to higher outstanding debt principal resulting from the issuance of 2023 Series ABC revenue bonds and commercial paper, $3,166 in unearned revenue mainly due to $1,429 in unspent Federal pass -through grant relating to California Water and Wastewater Arrearages Payment Progra m (CWWAPP), $1,169 in liens payable, and $652 in customer credit balances due to overpayments, offset by $84 decrease in deposits from Pacific Gas & Electric due to expenses incurred for the Cross Bore Project, and $225 increase in other postemployment benefits obligations based on actuarial report. The increase in other liabilities were offset by $2,102 in payment of prior year 33 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
payable that was made in current year to Municipal Transportation Agency for its share of the Walsh Construction Settlement, $1,349 decrease in pollution remediation obligation due to payments made for the Yosemite Creek Remediation project, $1,297 in leases due to payments made, $243 decrease in subscription liability, and $113 payment to Hetch Hetchy Power related to the 525 Golden Gate Living Machine System. Deferred inflows of resources decreased by $9,793 due to decreases in pensions and other postemployment benefits of $5,968 and $2,477, respectively, based on actuarial reports, $1,098 in unamortized gain on refunding of debt due to amortization and refunding gain, and $250 in leases.
*The fiscal year 2024 net position narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
The following table summarizes Hetchy Water’s changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
Hetchy Water Net Position, Fiscal Year 2025
Hetchy Water’s net position of $339,957 increased by $60,014 or 21.4% from prior year. Increases in total assets and deferred outflows of resources of $59,486 and decreases of $528 in total liabilities and deferred inflows of resources are described below (see Table 1 C-A). The increase of $46,373 in current and other assets was attributed to an increase of $46,258 in cash and investments with City Treasury mainly due to transfer of $47,084 from the Water Enterprise for the Mountain Tunnel Improvement Project. The remaining increase of $115 was mainly due to increase in interest receivables from higher interest rates.
Capital assets, net of accumulated depreciation and amortization, increased by $12,844 or 5.4% to $250,330 primarily from construction and capital improvement activities for the Mountain Tunnel Improvement and O’Shaughnessy Dam Outlet Works Projects (see the Capital Assets section of the MD&A for more information).
Restated 2025 - 2024 2024 - 2023
2025 2024* 2023 Change Change
Total assets:
Current and other assets $ 127,978 81,605 90,830 46,373 (9,225) 250,330 237,486 220,036 12,844 17,450
Total assets 378,308 319,091 310,866 59,217 8,225
Deferred outflows of resources:
Pensions 12,435 11,929 8,858 506 3,071
Other postemployment benefits 2,954 3,191 3,248 (237) (57) Total deferred outflows of resources 15,389 15,120 12,106 269 3,014 Liabilities:
Current liabilities 8,728 9,921 9,888 (1,193) 33
Long-term liabilities 41,312 39,509 31,730 1,803 7,779 Total liabilities 50,040 49,430 41,618 610 7,812
Deferred inflows of resources:
Pensions 868 1,941 4,142 (1,073) (2,201)
Other postemployment benefits 2,832 2,897 3,084 (65) (187) Total deferred inflows of resources 3,700 4,838 7,226 (1,138) (2,388) Net position:
Net investment in capital assets 248,610 233,276 214,014 15,334 19,262 Restricted for capital projects 20,815 31,330 10,980 (10,515) 20,350 Unrestricted 70,532 15,337 49,134 55,195 (33,797)
Total net position $ 339,957 279,943 274,128 60,014 5,815 Proprietary Fund – Hetchy Water
Comparative Condensed Net Position
June 30, 2025, 2024, and 2023
Capital assets, net of accumulated
depreciation and amortization
Table 1C – A
34 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Deferred outflows of resources increased by $269 due to an increase in pensions offset by a decrease in OPEB based on actuarial reports.
Hetchy Water’s total liabilities increased by $610 or 1.2% to $50,040, as explained by increases of $1,320 in net pension liability based on actuarial estimates and $825 in employee related benefits due to 3.0% increase in cost - of-living adjustment (COLA) and implementation of GASB Statement No. 101, Compensated Absences which required the recognition of additional leave benefits. Other increases of $1,374 were mostly related to unrestricted payables due to increase in management consulting services and equipment purchases. These increases were offset by a decrease of $2,909 in restricted payables due to lower project spending mainly for Repair and Replacement Projects.
Deferred inflows of resources decreased by $1,138 due to decreases in pensions and OPEB based on actuarial reports.
Hetchy Water Net Position, Fiscal Year 2024*
Hetchy Water’s net position of $279,943 increased by $5,815 or 2.1% from prior year. Increases in total assets and deferred outflows of resources of $11,239 and increases of $5,424 in total liabilities and deferred inflows of resources are described below (see Table 1C -A). The decrease of $9,225 in current and other assets was attributed to decreases of $10,152 in cash and investments with City Treasury mainly from higher cash paid to suppliers and contractors for goods and services, $59 in due from other governments related to State grant reimbursement for Rim Fire Project, and $22 in inventory due to more issuances than purchases during the fiscal year. The decreases were offset by increases of $659 in prepaid charges, advances, and other receivables mainly due to higher prepayments to San Joaquin Tributaries Authority and County of Tuolumne, $283 in interest receivables attributed to higher interest rates, and $66 in charges for services receivables due to higher consumption from Lawrence Livermore National Laboratory.
Capital assets, net of accumulated depreciation and amortization, increased by $17,450 or 7.9% to $237,486 primarily from construction and capital improvement activities for the 2023 March Winter Storm and Mountain Tunnel Improvements Projects (see the Capital Assets section of the MD&A for more information) . Deferred outflows of resources increased by $3,014 due to an increase of $3,071 in pensions, offset by a decrease of $57 in OPEB based on actuarial reports.
Hetchy Water’s total liabilities increased by $7,812 or 18.8% to $49,430, as explained by increases of $4,985 in net pension liability based on actuarial estimates, $3,314 in accrued compensated absences per implementation of GASB Statement No. 101, Compensated Absences , $1,362 in OPEB obligations based on actuarial estimates, and $468 in employee related benefits due to 4.75% increase in cost -of-living adjustment (COLA). These increases were offset by decreases of $1,720 in restricted payables due to lower project spending mainly for Mountain Tunnel Improvement Project, $432 in general liability based on actuarial estimates, $80 in subscription liability, $64 in unrestricted payables mainly due to decrease in management consulting services, $16 in lease liability, $4 in unearned revenues, refunds, and other mainly due to decrease in prepaid rent received from tenants, and $1 in interest payable related to SBITAs.
Deferred inflows of resources decreased by $2,388 due to decreases of $2,201 in pensions and $187 in OPEB based on actuarial reports.
*The fiscal year 2024 net position narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
35 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The following table summarizes Hetchy Power’s changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
Restated 2025 - 2024 2024 - 2023
2025 2024* 2023 Change Change
Total assets:
Current and other assets $ 386,239 330,411 294,006 55,828 36,405 809,921 757,752 647,238 52,169 110,514
Total assets 1,196,160 1,088,163 941,244 107,997 146,919 Deferred outflows of resources:
Pensions 15,198 14,580 10,826 618 3,754
Other postemployment benefits 3,611 3,899 3,969 (288) (70) Total deferred outflows of resources 18,809 18,479 14,795 330 3,684 Liabilities:
Current liabilities:
Bonds 3 ,748 3,599 1,590 149 2,009
Certificates of participation 483 463 445 20 18
Commercial paper 169,333 90,654 — 78,679 90,654
Other liabilities 54,523 58,082 63,355 (3,559) (5,273) Subtotal current liabilities 228,087 152,798 65,390 75,289 87,408 Long-term liabilities:
Bonds 309,631 315,200 189,342 (5,569) 125,858
Certificates of participation 11,202 11,685 12,148 (483) (463) Commercial paper — — 116,352 — (116,352)
Arbitrage rebate payable 207 184 — 23 184
Other liabilities 93,334 55,011 45,626 38,323 9,385 Subtotal long-term liabilities 414,374 382,080 363,468 32,294 18,612 Total liabilities:
Bonds 313,379 318,799 190,932 (5,420) 127,867
Certificates of participation 11,685 12,148 12,593 (463) (445) Commercial paper 169,333 90,654 116,352 78,679 (25,698) Arbitrage rebate payable 207 184 — 23 184
Other liabilities 147,857 113,093 108,981 34,764 4,112 Total liabilities 642,461 534,878 428,858 107,583 106,020 Deferred inflows of resources:
Pensions 1,061 2,372 5,062 (1,311) (2,690)
Other postemployment benefits 3,461 3,541 3,769 (80) (228) Total deferred inflows of resources 4,522 5,913 8,831 (1,391) (2,918) Net position:
Net investment in capital assets 341,791 343,297 313,171 (1,506) 30,126 Restricted for debt service — — 56 — (56)
Restricted for capital projects 32,645 28,625 21,702 4,020 6,923 Restricted for other purposes 5,772 — — 5,772 —
Unrestricted 187,778 193,929 183,421 (6,151) 10,508
Total net position $ 567,986 565,851 518,350 2,135 47,501 Table 1C – B
Proprietary Fund – Hetchy Power
Comparative Condensed Net Position
June 30, 2025, 2024, and 2023
Capital assets, net of accumulated
depreciation and amortization
36 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Power Net Position, Fiscal Year 2025
Hetchy Power’s net position of $567,986 increased by $2,135 or 0.4% from prior year. Increases in total assets and deferred outflows of resources of $108,327 and increases of $106,192 in total liabilities and deferred inflows of resources are described below (see Table 1C-B). Increase of $55,828 in current and other assets was attributed to increases of $60,535 in cash and investments mainly due to cash proceeds from additional commercial paper issuances and $1,788 in prepaid charges, advances, and other receivables mainly due to new Inflation Reduction Act tax credits for solar projects. These increases were offset by decreases of $5,240 in charges for services receivables due to less excess energy sold to wholesale customers and $1,255 in due from other City departments from one-time utility users tax refund received from the General Fund.
Capital assets, net of accumulated depreciation and amortization, increased by $52,169 or 6.9% to $809,921 primarily from construction and capital improvement activities for the Bay Corridor Transmission and Distribution Projects (see the Capital Assets section of the MD&A for more information) . Deferred outflows of resources increased by $330 due to an increase in pensions offset by a decrease in OPEB based on actuarial reports.
Hetchy Power’s total liabilities of $642,461 increased by $107,583 or 20.1%. As of June 30, 2025, outstanding debt increased by $72,796 due to $78,679 commercial paper issuance, offset by $4,062 in bonds and certificates of participation principal repayments and $1,821 in amortization of premium. Arbitrage rebate payable and other liabilities increased by $34,787 mainly due to $37,822 in SRF loan payable to Water Enterprise for the Mountain Tunnel Project, $3,031 increase in unrestricted payable due to higher year -end expense accruals for power purchases, $1,613 in net pension liability based on actuarial estimates, and $1,093 in unearned revenues, refunds, and other due to prepaid Distributed Antenna System (DAS) revenue. The remaining increase of $1,962 was mostly related to employee related benefits due to 3.0% increase in COLA and implementation of GASB Statement No. 101, Compensated Absences , which required the recognition of additional leave benefits. These increases were offset by decreases of $7,608 in restricted payable mainly due to lower year -end expense accruals for the Warnerville Substation Rehabilitation and Bay Corridor Transmission and Distribution projects and $3,126 in damage claim liability. Hetchy Power’s damage claim liability as of June 30, 2025 was estimated by using probable exposure information provided by the City Attorney’s Office and includes an estimate of incurred but not reported losses.
Deferred inflows of resources decreased by $1,391 due to decreases in pensions and OPEB based on actuarial reports.
Hetchy Power Net Position, Fiscal Year 2024*
Hetchy Power’s net position of $565,851 increased by $47,501 or 9.2% from prior year. Increases in total assets and deferred outflows of resources of $150,603 and increases of $103,102 in total liabilities and deferred inflows of resources are described below (see Table 1C-B). Increase of $36,405 in current and other assets was attributed to increases of $28,989 in cash and investments mainly due to higher collections from billings attributable to 14.0% average rate increase and cash proceeds from commercial paper, $6,065 in prepaid charges, advances, and other receivables mainly due to prepayments to vendors such as County of Tuolumne for municipal services and additional collateral paid to satisfy the CAISO’s financial security requirements, $4,079 in charges for services receivables mainly due to pending collections from wholesale customers, $1,320 in interest receivables attributed to higher interest rates, and $71 in inventory due to more purchases than issuances during the fiscal year.
These increases were offset by decreases of $3,982 in restricted interest and receivables due to refundable deposit received from PG&E, $72 in due from other governments related to State grant reimbursement for Rim Fire Project, and $65 in due from other City departments mainly due to repayments for Moscone Renewable Energy Projects.
Capital assets, net of accumulated depreciation and amortization, increased by $110,514 or 17.1% to $757,752 primarily from construction and capital improvement activities for the Cluster 7 Mitigation and Transmission Line Clearance Mitigation Projects (see the Capital Assets section of the MD&A for more information). Deferred outflows of resources increased by $3,684 due to an increase of $3,754 in pensions, offset by a decrease of $70 in OPEB based on actuarial reports.
37 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Power’s total liabilities of $534,878 increased by $106,020 or 24.7%. As of June 30, 2024, outstanding debt increased by $101,724 due to $131,230 from issuance of 2023 Series A Revenue Bonds and $91,635 from commercial paper issuance, offset by commercial paper repayment of $117,333, bonds and certificates of participation principal repayments of $2,035, and $1,773 in amortization of premium and discount. Other liabilities of $113,093, such as payables to vendors, employees, contractors, and other government agencies for goods and services under contractual agreements, increased by $4,112 or 3.8%, mainly due to increases of $6,093 in net pension liability based on actuarial estimates, $5,748 in restricted payables to vendors and contractors due to higher year-end expense accruals mainly for the Warnerville Substation Project, $4,051 in accrued compensated absences per implementation of GASB Statement No. 101, Compensated Absences, $1,663 in OPEB obligations based on actuarial estimates, $1,094 in interest payable mainly due to 2023 Series A Revenue Bonds issuance, $724 in unearned revenues, refunds, and other mainly due to utility user taxes payable to Alameda county, and $610 in employee related benefits due to 4.75% increase in COLA. These increases were offset by decreases of $11,465 in unrestricted payables mainly due to lower year -end expense accruals for power purchases from APX, Inc. and distribution services from PG&E, $2,376 in general liability based on actuarial estimates, $1,946 in due to other City departments related to claim settlement reimbursement paid to SFMTA, $65 in subscription liability, and $19 in lease liability. Arbitrage rebate payable increased by $184 related to 2021 Series AB and 2023 Series A Revenue Bonds.
Deferred inflows of resources decreased by $2,918 due to decreases of $2,690 in pensions and $228 in OPEB based on actuarial reports.
*The fiscal year 2024 net position narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
The following table summarizes CleanPowerSF’s changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
Restated 2025 - 2024 2024 - 2023
2025 2024* 2023 Change Change
Total assets:
Current and other assets $ 292,342 224,700 1 57,906 67,642 66,794 86 13 30 73 (17)
Total assets 292,428 224,713 157,936 67,715 66,777
Deferred outflows of resources:
Pensions 2,753 2,187 1,292 566 895
Other postemployment benefits 1,195 996 1,009 199 (13) Total deferred outflows of resources 3,948 3,183 2,301 765 882 Liabilities:
Current liabilities 38,207 38,240 31,461 (33) 6,779
Long-term liabilities 9,083 8,297 6,557 786 1,740
Total liabilities 47,290 46,537 38,018 753 8,519
Deferred inflows of resources:
Pensions 730 925 1,296 (195) (371)
Other postemployment benefits 1,737 2,292 2,922 (555) (630) Total deferred inflows of resources 2,467 3,217 4,218 (750) (1,001) Net position:
Unrestricted 246,619 178,142 118,001 68,477 60,141
Total net position $ 246,619 178,142 118,001 68,477 60,141 Proprietary Fund – CleanPowerSF
Comparative Condensed Net Position
June 30, 2025, 2024, and 2023
Capital assets, net of accumulated
depreciation and amortization
Table 1C – C
38 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
CleanPowerSF Net Position, Fiscal Year 2025
CleanPowerSF’s net position of $246,619 increased by $68,477 or 38.4% from prior year. Increases in total assets and deferred outflows of resources of $68,480 and increases of $3 in total liabilities and deferred inflows of resources are described below (see Table 1C -C). Increase in current and other assets of $67,642 was due to increases of $62,638 in cash and investments with City Treasury mainly attributed to higher collections from billings, $3,686 in charges for services receivables mainly due to 8.5% average rate increase, and $1,318 in prepaid charges, interest receivables, and other receivables mainly related to additional interest receivable on collateral and pending collections for resource adequacy capacity sales to counterparties.
Capital assets, net of accumulated depreciation and amortization, increased by $73 or 561.5% to $86 due to increase in subscription assets (see the Capital Assets section of the MD&A for more information) . Deferred outflows of resources increased by $765 due to increases in pensions and OPEB based on actuarial reports.
Total liabilities increased by $753 or 1.6% to $47,290, mainly explained by increases of $3,109 in payables due to higher power purchases and $1,590 in net pension liability based on actuarial estimates and increase in employee related benefits due to 3.0% COLA increase and implementation of GASB Statement No. 101, Compensated Absences, which required the recognition of additional leave benefits. These increases were offset by a decrease of $3,946 in unearned revenues, OPEB, damage claims, and other liabilities mainly due to return of funds for the Community Food Service Energy Efficiency Program to PG&E.
Deferred inflows of resources decreased by $750 due to decreases in pensions and OPEB based on actuarial reports.
CleanPowerSF Net Position, Fiscal Year 2024*
CleanPowerSF’s net position of $178,142 increased by $60,141 or 51.0% from prior year. Increases in total assets and deferred outflows of resources of $67,659 and increases of $7,518 in total liabilities and deferred inflows of resources are described below (see Table 1C -C). Increase in current and other assets of $66,794 was due to increases of $61,154 in cash and investments with City Treasury mainly attributed to higher collections from billings, $9,368 in charges for services receivables mainly due to 15.0% average rate increase, and $1,133 in interest receivable attributed to higher interest rates. These increases were offset by a decrease of $4,861 in prepaid charges and other receivables mainly related to $5,000 cash collateral returned from APX, Inc.
Capital assets, net of accumulated depreciation and amortization, decreased by $17 or 56.7% to $13 due to decrease in subscription assets (see the Capital Assets section of the MD&A for more information) . Deferred outflows of resources increased by $882 due to an increase of $895 in pensions, offset by a decrease of $13 in OPEB based on actuarial reports.
Total liabilities increased by $8,519 or 22.4% to $46,537, mainly explained by increases of $4,674 in payables due to higher power purchases, $1,840 in unearned revenues, refunds, and other, $1,439 in net pension liability based on actuarial estimates, $348 in accrued compensated absences per implementation of GASB Statement No. 101, Compensated Absences , $136 in OPEB obligations based on actuarial assumptions, and $113 in employee related benefits due to COLA increase. These increases were offset by decreases of $18 in subscription liability and $13 in general liability based on actuarial estimates. Increase of $1,840 in unearned revenues, refunds, and other was mainly due to increases of $1,241 for the Community Food Service Energy Efficiency Program and Disadvantaged Communities Programs from California Public Utilities Commission (CPUC), $651 in net energy metering credits to customers who generated excess energy, and $8 in energy tax payable, offset by a decrease of $60 in customer prepayments.
Deferred inflows of resources decreased by $1,001 due to decreases of $630 in OPEB and $371 in pensions based on actuarial reports.
*The fiscal year 2024 net position narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
39 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Results of Operations
Department-wide Business Type Activities
The following table summarizes department-wide revenues, expenses, and changes in net position. Detailed discussion follows for each proprietary fund.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences. **Interest expenses, net of amortization of premium, discount, refunding gain/loss and issuance costs.
Restated 2025 - 2024 2024 - 2023
2025 2 024* 2023 Change Change
Revenues:
Charges for services $ 1,794,186 1 ,684,847 1,614,447 109,339 70,400 Rents and concessions 8,558 9,655 14,387 (1,097) (4,732) Other operating revenues 8,554 7,867 9,670 687 (1,803) Interest and investment income 103,344 73,528 18,315 29,816 55,213 Other non-operating revenues 37,556 75,620 67,553 (38,064) 8,067 Total revenues 1,952,198 1,851,517 1,724,372 100,681 127,145 Expenses:
Operating expenses 1,423,674 1,550,870 1,257,946 (127,196) 292,924 Interest expenses** 371,752 313,281 293,982 58,471 19,299 Non-operating expenses 3,004 3,286 2,809 (282) 477
Total expenses 1,798,430 1,867,437 1,554,737 (69,007) 312,700 153,768 (15,920) 169,635 169,688 (185,555)
Capital contributions 21,613 130,879 7,992 (109,266) 122,887 Transfers from the City and County of San Francisco 88,299 547 20,080 87,752 (19,533) Transfers to the City and County of San Francisco (52,119) (1,558) (20,096) (50,561) 18,538 Net capital contributions and transfers 57,793 129,868 7,976 (72,075) 121,892 Change in net position 211,561 113,948 177,611 97,613 (63,663) Net position at beginning of year
Beginning of year as previously reported 3,080,678 3,001,386 2,823,775 79,292 177,611 Cumulative effect of accounting change — (34,656) — 34,656 (34,656) Net position at beginning of year as restated 3,080,678 2,966,730 2,823,775 113,948 142,955 Net position at end of year $ 3,292,239 3,080,678 3,001,386 211,561 79,292 Table 2
Business Type Activities
Comparative Condensed Revenues, Expenses, and Changes in Net Position Years ended June 30, 2025, 2024, and 2023
Change in net position before
transfers and capital contributions
40 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The following table summarizes Water’s revenues, expenses, and changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences. **Interest expenses, net of amortization of premium, discount, refunding gain/loss and issuance costs.
Water Results of Operations, Fiscal Year 2025
The Water Enterprise’s total revenues of $736,609 for the year represented a decrease of $7,449 or 1.0% from prior year (see Table 2A). Decreases included $13,192 in other non- operating revenues and $1,202 in rents and concessions, offset by increases of $3,996 in interest and investment income, $2,823 in charges for services, and $126 in other operating revenues.
Charges for services were $665,552, an increase of $2,823 or 0.4%, mainly due to a 5% planned rate increase for retail customers and 8.8% rate increase for wholesale customers beginning July 1, 2024 offset by a decrease in the WRR balancing account. Rents and concessions were $7,354, a decrease of $1,202 or 14.0%, mainly due to allocations for low-income customer assistance programs. Other operating revenues were $5,731, an increase of $126 or 2.2% mainly due to an increase in capacity fees permits issued. Interest and investment income were $29,093, an increase of $3,996 or 15.9%, mainly due to increased interest from higher cash balances. Other non - operating revenues were $28,879, a decrease of $13,192 or 31.4%, due to grants received in prior year for the COVID-19 pandemic related water utility arrearages relief and the SCU Lightning Complex fire.
The Water Enterprise’s total expenses were $698,513, a decrease of $42,131 or 5.7%. Operating expenses were $495,463, a decrease of $35,191 or 6.6%, resulting from decreases of $60,017 in general administrative and other expenses mainly due to due to a decrease in estimated judgment and claims expenses and higher capital project capitalizations in the current year, $2,566 in contractual services and materials and supplies mainly for construction expenses. These decreases were offset by increases of $14,693 in personnel services mainly due to pension expenses based on actuarial estimates, $7,971 in services provided by other departments mainly due to increased electricity charges and water assessment fees paid to Hetch Hetchy Water, and $4,728 in depreciation from additional assets placed into service. Interest expenses decreased by $7,078 compared to prior year, mainly Restated 2025 - 2024 2024 - 2023
2025 2024* 2023 Change Change
Revenues:
Charges for services $ 665,552 662,729 671,216 2,823 (8,487) Rents and concessions 7,354 8,556 13,282 (1,202) (4,726) Other operating revenues 5,731 5,605 6 ,593 126 (988) Interest and investment income 29,093 25,097 11,156 3,996 13,941 Other non-operating revenues 28,879 42,071 40,679 (13,192) 1,392 Total revenues 736,609 744,058 742,926 (7,449) 1,132 Expenses:
Operating expenses 495,463 530,654 460,253 (35,191) 70,401 Interest expenses** 201,152 208,230 204,942 (7,078) 3,288 Non-operating expenses 1,898 1,760 1,775 138 (15)
Total expenses 698,513 740,644 666,970 (42,131) 73,674 38,096 3,414 75,956 34,682 (72,542)
Capital contributions 17,436 53,599 2,717 (36,163) 50,882 Transfers from the City and County of San Francisco 41,215 505 5 40,710 500 Transfers to the City and County of San Francisco (47,115) (1,241) (20,032) (45,874) 18,791 Net capital contributions and transfers 11,536 52,863 (17,310) (41,327) 70,173 Change in net position 49,632 56,277 58,646 (6,645) (2,369) Net position at beginning of year
Beginning of year as previously reported 733,106 692,073 633,427 41,033 58,646 Cumulative effect of accounting change — (15,244) — 15,244 (15,244) Net position at beginning of year as restated 733,106 676,829 633,427 56,277 43,402 Net position at end of year $ 782,738 733,106 692,073 49,632 41,033 Table 2A
Proprietary Fund – Water
Years ended June 30, 2025, 2024, and 2023
Change in net position before
transfers and capital contributions
Comparative Condensed Revenues, Expenses, and Changes in Net Position 41 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
due the refunding of bonds through the issuance of the 2025 Series ABC and 2025 Series DEF water revenue refunding bonds. Non-operating expenses increased by $138 mainly due to higher rebates provided to customers.
Capital contributions of $17,436 were received from developers for assets related to the Mission Rock Phase 1A project. Transfer in of $41,215 included $41,211 from the City for the Earthquake Safety and Emergency Response program and $4 from the General Fund for the Mayor’s Office’s minimum compensation ordinance.
Transfer out of $47,115 included $47,084 to Hetch Hetchy Water for the Mountain Tunnel Improvement project and $31 to the Office of the City Administrator for the Water Enterprise’s contribution to the Surety Bond Program.
Water Results of Operations, Fiscal Year 2024*
The Water Enterprise’s total revenues of $744,058 for the year represented an increase of $1,132 or 0.2% from prior year (see Table 2A). Increases included $13,941 from interest and investment income, $1,533 in other operating revenues, and $1,392 in other non- operating revenues. These increases were offset by decreases of $11,008 in charges for services and $4,726 in rents and concessions.
Charges for services were $662,729, a decrease of $2,823 or 0.4%, mainly due to a higher Wholesale Balancing Account adjustment to increase revenues in prior year, offset by adopted rate increases of 9.7% for wholesale customers and 5% for retail customers beginning July 1, 2023. Rents and concessions were $8,556, a decrease of $4,726 or 35.6%, mainly due to funding allocation for low -income customer assistance programs. Other operating revenues were $5,605, a decrease of $988 or 15.0%, mainly due to lower water installation charges. Interest and investment income were $25,097, an increase of $13,941 or 125.0%, mainly due to higher unrealized gains in the current year compared to prior year and higher interest rates. Other non -operating revenues were $42,071, an increase of $1,392 or 3.4%, mainly due to grants for COVID-19 pandemic related water utility arrearages relief and disaster cost recovery for the 2020 Wildfires Santa Clara Fence project.
The Water Enterprise’s total expenses were $740,644, an increase of $73,674 or 11.0%. Operating expenses were $530,654, an increase of $70,401 or 15.3%, resulting from increases of $30,435 in general and administrative expenses mainly due to an increase in judgment and claims expenses based on actuarial estimates, $25,368 in personnel services mainly due to pension expenses based on actuarial estimates, $11,054 in other operating expenses mainly due SF Recycled Water and Mountain Tunnel Improvement projects spending, $3,209 in contractual services mainly for construction expenses, and $3,149 in materials and supplies mainly for water treatment supplies. These increases were offset by decreases of $2,272 for services provided by other departments mainly from lower water assessment fees paid to Hetch Hetchy Water, and $542 in depreciation.
Interest expenses increased by $3,288 compared to prior year, mainly due to the issuances of 2023 Series AB revenue bonds and 2023 Series CD revenue refunding bonds. Non- operating expenses decreased by $15 mainly due to higher rebates provided to customers in the prior year.
Capital contributions of $53,599 were received from developers for assets relating mainly to the Treasure Island, Yerba Buena Island, and Pier 70 Development project. Transfer in of $505 from the General Fund included $500 for research on environmental impacts in Hunter's Point Shipyard and $5 for the Mayor’s Office’s minimum compensation ordinance. Transfer out of $1,241 included $1,167 to the Arts Commission for the arts enrichment fund, $42 to Hetch Hetchy Water to fund various Mountain Tunnel Improvement projects, and $32 to the Office of the City Administrator for the Water Enterprise’s contribution to the Surety Bond Program.
*The fiscal year 2024 results of operations narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
42 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The following table summarizes Wastewater’s revenues, expenses, and changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences. **Interest expenses, net of amortization of premium, discount, refunding gain/loss and issuance costs.
Wastewater Results of Operations, Fiscal Year 2025
The Wastewater Enterprise’s total revenues were $479,902, an increase of $35,036 or 7.9% from prior year (see Table 2B). Charges for services increased by $35,453 or 9.0% mainly due to a 9.0% rate increase adopted on July 1, 2024, and an increase in sanitary flow of 797,494 ccf, or 3.7% from both residential and non- residential customers.
Interest and investment income increased by $18,537 or 72.6%, driven by a $19,939 increase in interest earned from City Treasury pooled investments. This was attributed to higher average cash balances resulting from issuances of the 2024 Series ABCD revenue bonds and WIFIA loans, as well as higher interest rates.
Other operating revenues increased by $561 or 24.8%, mainly due to increased capacity fees, driven by an 8% increase in the average permit price and a 3% increase in the number of permits issued. This was further supported by a reduction in the allowance for doubtful accounts and write-offs compared to prior year.
Rents and concessions increased by $136 or 18.4% mainly due to higher lease payments and the recognition of non-refundable deposits as revenue.
Other non-operating revenues decreased by $19,651 or 80.9%, primarily due to prior year receipts of $12,104 in federal and state grants under the CWWAPP and revenue recognized from fair share contributions totaling $7,558 from the GSW and the UCSF for the Mariposa Project.
Restated 2025 - 2024 2024 - 2023
2025 2024* 2023 Change Change
Revenues:
Charges for services $ 427,493 392,040 360,037 35,453 32,003 Rents and concessions 875 739 822 136 (83)
Other operating revenues 2,823 2,262 3,077 561 (815) Interest and investment income 44,065 25,528 2,556 18,537 22,972 Other non-operating revenues 4,646 24,297 9,910 (19,651) 14,387 Total revenues 479,902 444,866 376,402 35,036 68,464 Expenses:
Operating expenses 292,481 463,091 261,350 (170,610) 201,741 Interest expenses** 154,566 91,584 81,133 62,982 10,451 Non-operating expenses 225 505 535 (280) (30)
Total expenses 447,272 555,180 343,018 (107,908) 212,162 Change in net position before
transfers and capital contributions 32,630 (110,314) 33,384 142,944 (143,698) Capital contributions 145 48,080 2,740 (47,935) 45,340 Transfers from the City and County of San Francisco — — 75 — (75) Transfers to the City and County of San Francisco (1,472) (209) (32) (1,263) (177) Net capital contributions and transfers (1,327) 47,871 2,783 (49,198) 45,088 Change in net position 31,303 (62,443) 36,167 93,746 (98,610) Net position at beginning of year
Beginning of year as previously reported 1,323,636 1,398,834 1,362,667 (75,198) 36,167 Cumulative effect of accounting change — (12,755) — 12,755 (12,755) Net position at beginning of year as restated 1,323,636 1,386,079 1,362,667 (62,443) 23,412 Net position at end of year $ 1,354,939 1,323,636 1,398,834 31,303 (75,198) Table 2B
Proprietary Fund – Wastewater
Years ended June 30, 2025, 2024, and 2023
Comparative Condensed Revenues, Expenses, and Changes in Net Position 43 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Total expenses were $447,272, reflecting a decrease of $107,908 or 19.4% compared to prior year. This reduction was primarily driven by a $170,610 decrease in operating expenses and a $280 decrease in City grants program expenses for community -based organization services and floodwater management program. These decreases were offset by a $62,982 increase in interest expenses, mainly resulting from an increase of $75,292 in bonds and loans interest, amortization of premiums, refunding gains, and issuance cost, primarily due to the issuance of the 2024 ABCD revenue bonds and the new WIFIA loans, offset by a $12,310 decrease in arbitrage rebate interest expense based on the computation from the BLX interim arbitrage rebate analysis report.
The $170,610 decrease in operating expenses was primarily due to a $202,206 decline in general and administrative and other operating expenses, largely due to reduced judgments and claims expenses based on analyses performed by the City Attorney’s Office and Controller’s Office, as well as lower project costs associated with the Westside Pump Station Reliability Improvement, Biosolids Digester, and Treasure Island Capital Improvement projects. These reductions were partially offset by several increases, including a $21,334 increase in personnel services – driven by a 3% increase in cost -of-living adjustment (COLA), a 3% increase in full -time equivalents, and increased other postemployment benefit and pension expenses. Additional increases included a $4,667 rise in electric utility services provided by Hetch Hetchy Power at the Southeast Treatment Plant; a $3,754 increase in assets depreciation and amortization expenses; and a $1,841 increase in materials and supplies and contractual services for building and construction, equipment maintenance, and sewage treatment at the Southeast Treatment Plant reflecting higher maintenance costs.
Capital contributions totaled $145, representing a decrease of $47,935 compared to prior year. This is primarily due to the Developer Built Infrastructure transferred to capital assets, comprising $25,923 for Pier 70 Phase 1, $17,550 for the Treasure Island Stage 1, and $4,607 for the Yerba Buena Island Street Improvements projects in prior year. Transfer out totaled $1,472, which included allocations to Culture and Recreation Fund for art enrichment, to Recreation and Park for the Green Infrastructure Grant Program at Buchanan Street Mall, and to the Office of the City Administrator for the Surety Bond Program.
Wastewater Results of Operations, Fiscal Year 2024*
The Wastewater Enterprise’s total revenues were $444,866, an increase of $68,464 or 18.2% from prior year (see Table 2B). Charges for services increased by $30,360 or 8.6% mainly due to a 9% rate increase adopted on July 1, 2023, offset by a decrease in sanitary flow of 95,679 ccf, or 0.4% from both residential and non -residential customers. Interest and investment income increased by $22,972 or 898.7% mainly due to $10,485 increase in unrealized gain in City Treasury pooled investments, attributed to improved fair value of investments and a $12,487 increase in interest earned mainly due to higher average cash balances from issuance of WIFIA loans and 2023 Series AB bonds and increase in interest rates. Other non- operating revenues increased by $14,387, primarily due to a $12,104 rise in Federal and State grants received mainly for the CWWAPP and a revenue accrual of $7,558 for the upgrades fair share contribution from the Golden State Warriors and the University of California, San Francisco for the Mariposa Project. This increase was offset by the Monsanto settlement related to water pollution of $5,000 and the $196 Baker Beach grant received in the prior year, as well as decreases of $85 in Federal interest subsidy and $37 in gains from the sale of assets. Other operating revenues increased by $828 or
9.6% mainly due to a $1,643 increase in revenues from other City departments, including Recreation & Park, Zuckerberg San Francisco General Hospital and Trauma Center, and the San Francisco Municipal Transportation Agency. This increase was offset by an $815 decrease in capacity fees, driven by a $544 increase in the allowance for doubtful accounts and write- offs, along with a $271 decline in revenue due to lower permits prices and issuance. Rents and concessions decreased by $83 or 10.1% mainly due to a decrease of $345 from three terminated leases offset by increases in rental income of $189 from tenants with 3.5% consumer price index average rate increase, $70 from short -term conference room rentals at Southeast Community Center and $3 related to leases.
Total expenses were $555,180, reflecting an increase of $212,162 or 61.9% compared to prior year. This was primarily due to increases of $201,741 in operating expenses, $43,363 in interest expenses mainly due to higher bond and WIFIA principal debt and arbitrage rebate liability, offset by an increase of $32,912 in amortization of premium, refunding loss, and issuance cost and $30 decrease in City grants program expenses due to $195 decrease in expenditures for community based organization services for the Youth Employment & Environment Project, offset by $165 increase in floodwater grant for the UC Wastewater Collection Project. The increase of $201,741 in operating expenses was primarily driven by several factors: a $178,078 rise in general and administrative and other operating expenses largely attributed to judgments and claims expenses based on 44 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
actuarial report, along with increased project costs associated with the WIFIA Headworks New Grit Removal/Influent Pump and Biosolids Digester projects; a $17,157 increase in personnel services, mainly due to a $15,239 rise related to the GASB 68 pension adjustment and a 4.75% cost -of-living adjustment (COLA); a $4,683 increase in depreciation and amortization expenses resulting from more assets being placed in service, a $3,108 rise in contractual services primarily due to higher maintenance costs for service equipment at the Southeast Treatment Plant and leasing activities; and a $168 increase in materials and supplies for sewage treatment at the Southeast Treatment Plant, all offset by a $1,453 decrease in expenses for services of other departments mainly in electric services provided by Hetch Hetchy Power at the Southeast Treatment Plant.
Capital contributions of $48,080 were for the Developer Built Infrastructure transferred to capital assets, comprised of $25,923 for the Pier 70 Phase 1, $17,550 for the Treasure Island Stage 1, and $4,607 for the Yerba Buena Island Street Improvements projects. Transfer out of $209 included $177 transfers to Culture and Recreation Fund for art enrichment allocation and $32 to the Office of the City Administrator for the Surety Bond Program.
*The fiscal year 2024 results of operations narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
The following table summarizes Hetchy Water’s revenues, expenses, and changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
Hetchy Water Results of Operations, Fiscal Year 2025
Hetchy Water’s total revenues were $58,432, an increase of $5,347 or 10.1% from prior year’s revenues (see Table 2C -A). Increases included $3,741 in charges for services and $1,761 in interest and investment income, offset by decreases of $133 in other non-operating revenues and $22 in rents and concessions.
Charges for services were $53,071, an increase of $3,741 or 7.6% mainly due to increased water assessment fees from the Water Enterprise to fund upcountry water -related costs. Interest and investment income was $5,016, an increase of $1,761 mainly due to higher interest rates. Rents and other non -operating revenues decreased by $155 mainly due to settlement revenue in prior year for the San Joaquin Pipeline Project.
Restated 2025 - 2024 2024 - 2023
2025 2024* 2023 Change Change
Revenues:
Charges for services $ 53,071 49,330 52,570 3,741 (3,240) Rents and concessions 140 162 127 (22) 35
Interest and investment income 5,016 3,255 457 1,761 2,798 Other non-operating revenues 205 338 1,861 (133) (1,523) Total revenues 58,432 53,085 55,015 5,347 (1,930)
Expenses:
Operating expenses 45,471 44,409 50,011 1,062 (5,602) Interest expenses 23 3 4 20 (1)
Non-operating expenses 8 45 54 (37) (9)
Total expenses 45,502 44,457 50,069 1,045 (5,612)
Change in net position before transfers 12,930 8,628 4,946 4,302 3,682 Transfers from the City and County of San Francisco 47,084 42 20,000 47,042 (19,958) Change in net position 60,014 8,670 24,946 51,344 (16,276) Net position at beginning of year
Beginning of year as previously reported 279,943 274,128 249,182 5,815 24,946 Cumulative effect of accounting change — (2,855) — 2,855 (2,855) Net position at beginning of year as restated 279,943 271,273 249,182 8,670 22,091 Net position at end of year $ 339,957 279,943 274,128 60,014 5,815 Table 2C – A
Proprietary Fund – Hetchy Water
Comparative Condensed Revenues, Expenses, and Changes in Net Position Years ended June 30, 2025, 2024, and 2023
45 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Total operating expenses, excluding interest expenses and other non -operating expenses, were $45,471, an increase of $1,062 or 2.4%. Increases included $3,037 in other operating expenses mainly due to higher building structure and improvement expenses, $2,317 in general and administrative expenses due to higher payments to other governments related to law enforcement and emergency response services, and $751 in depreciation, amortization, materials and supplies expenses mainly related to additional facilities and improvements placed in service. These increases were offset by a decrease of $4,048 in personnel services due to lower bureau support costs. The remaining decrease of $995 was mainly from lower share of bureau support costs.
Transfer in of $47,084 from the Water Enterprise was to fund the Hetchy Water's share of the Mountain Tunnel Project.
As a result of the above activities, net position for the year ended June 30, 2025 increased by $60,014 or 21.4% compared to prior year.
Hetchy Water Results of Operations, Fiscal Year 2024*
Hetchy Water’s total revenues were $53,085, a decrease of $1,930 or 3.5% from prior year’s revenues (see Table 2C-A). Decreases included $3,240 in charges for services and $1,523 in other non- operating revenues, offset by increases of $2,798 in interest and investment income and $35 in rents and concessions.
Charges for services were $49,330, a decrease of $3,240 or 6.2% mainly due to decreased water assessment fees from the Water Enterprise to fund upcountry water -related costs. Interest and investment income was $3,255, an increase of $2,798 mainly due to unrealized gain in City Treasury pooled investments attributed to improved fair value of investments and higher interest rates. Other non- operating revenues were $338, a decrease of $1,523 mainly due to decreases of $1,388 in State grants revenue for the Moccasin Storm Project and Rim Fire Project related to emergency repairs, $239 in Federal grants revenue for the Rim Fire Project, and $2 in net gain from sale of fixed assets, offset by increases of $100 settlement revenue mainly for San Joaquin Pipeline Project and $6 miscellaneous revenue. Rents were $162, an increase of $35 mainly due to higher collections from recreational rentals and new leases.
Total operating expenses, excluding interest expenses and other non -operating expenses, were $44,409, a decrease of $5,602 or 11.2%. Decreases included $13,074 in other operating expenses mainly due to lower project spending on the Mountain Tunnel Improvement Project, $807 in general and administrative expenses due to lower judgments and claims expenses, and $2 in depreciation and amortization mainly related to fewer subscription assets. These decreases were offset by increases of $6,943 in personnel services due to higher pension expenses, 4.75% increase in COLA, and implementation of GASB Statement No. 101, Compensated Absences, $1,079 in contractual services from increased engineering services, $150 in material and supplies from treatment chemicals and hardware expenses, and $109 in services provided by other departments mainly due to higher risk management services.
Other non -operating expenses were $45, a decrease of $9 due to lower payments to community -based organization programs. Interest expenses were $3, a decrease of $1 due to lower interest expenses related to leases and subscription assets. A transfer in of $42 was received from the Water Enterprise to fund various capital projects.
As a result of the above activities, net position for the year ended June 30, 2024 increased by $5,815 or 2.1% compared to prior year.
*The fiscal year 2024 results of operations narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
46 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The following table summarizes Hetchy Power’s revenues, expenses, and changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences. **Interest expenses, net of amortization of premium, discount, refunding gain/loss and issuance costs.
Hetchy Power Results of Operations, Fiscal Year 2025
Hetchy Power’s total revenues were $236,256, a decrease of $368 or 0.2% from prior year’s revenues (see Table 2C-B). Decreases included $5,423 from other non- operating revenues and $9 from rents and concessions, offset by increases of $4,120 from charges for services and $944 from interest and investment income.
Charges for services were $218,274, an increase of $4,120 or 1.9%, mainly due to average rate increase and higher consumption, of which $17,465 was from City departments such as SFO and SFMTA and $4,734 from sales to retail customers. These increases were offset by decreases of $15,967 in wholesale revenue due to higher hydrogeneration in prior year resulting in greater excess supply sold, and $2,112 in resale of capacity to CleanPowerSF due to less excess energy. Interest and investment income was $14,688, an increase of $944 mainly due to higher interest rates.
Other non-operating revenues were $3,105, a decrease of $5,423 or 63.6%, mainly due to $2,873 in loss from the decommissioned solar power plant and photovoltaic system at Pier 96 and SFO, $2,550 in revenue received in prior year for the power system mitigation projects and lower DAS revenue.
Total operating expenses, excluding interest expenses and other non- operating expenses, increased by $16,918 or 8.4% to $218,081. Increases included $9,548 in purchased electricity due to higher resource adequacy purchases related to compliance requirements, $7,941 in personnel services due to 3.0% increase in COLA, $4,460 in other operating expenses mainly due to higher spending for the Moccasin Powerhouse Rewind Project, $2,548 in depreciation and amortization related to additional facilities and improvements placed in service, $1,254 in services provided by other departments mainly due to higher bureau support costs, and $1,012 in general, administrative, materials and supplies expenses mainly due to higher payments to other governments related to law enforcement and emergency response services. These increases were offset by a decrease of $9,845 from lower distribution charges from PG&E and contractual services.
Interest expenses increased by $2,542 or 18.9% due to higher outstanding commercial paper and higher bond interest expenses for the 2023 Series A Revenue Bonds.
Restated 2025 - 2024 2024 - 2023
2025 2 024* 2023 Change Change
Revenues:
Charges for services $ 218,274 214,154 203,847 4,120 10,307 Rents and concessions 189 198 156 (9) 42
Interest and investment income 14,688 13,744 3,741 944 10,003 Other non-operating revenues 3,105 8,528 13,605 (5,423) (5,077) Total revenues 236,256 236,624 221,349 (368) 15,275
Expenses:
Operating expenses 218,081 201,163 191,552 16,918 9,611 Interest expenses** 16,006 13,464 7,902 2,542 5,562 Non-operating expenses 534 99 227 435 (128)
Total expenses 234,621 214,726 199,681 19,895 15,045 Change in net position before transfers and contributions 1,635 21,898 21,668 (20,263) 230 Capital contribution 4,032 29,200 2,535 (25,168) 26,665 Transfers to the City and County of San Francisco (3,532) (108) (32) (3,424) (76) Net capital contributions and transfers 500 29,092 2,503 (28,592) 26,589 Change in net position 2,135 50,990 24,171 (48,855) 26,819 Net position at beginning of year
Beginning of year as previously reported 565,851 518,350 494,179 47,501 24,171 Cumulative effect of accounting change — (3,489) — 3,489 (3,489) Net position at beginning of year as restated 565,851 514,861 494,179 50,990 20,682 Net position at end of year $ 567,986 565,851 518,350 2,135 47,501 Table 2C – B
Proprietary Fund – Hetchy Power
Comparative Condensed Revenues, Expenses, and Changes in Net Position Years ended June 30, 2025, 2024, and 2023
47 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Other non-operating expenses were $534, an increase of $435 or 439.4% mainly due to new incentive program for energy-efficient improvements. Capital contributions of $4,032 were from developers for assets at Mission Rock and Warnerville Substation. Transfer out of $3,532 included $3,500 to General Fund related to acquisition of PG&E assets and $32 to the Office of the City’s Administrator for the Surety Bond Program.
As a result of the above activities, net position for the year ended June 30, 2025 increased by $2,135 or 0.4% compared to prior year.
Hetchy Power Results of Operations, Fiscal Year 2024*
Hetchy Power’s total revenues were $236,624, an increase of $15,275 or 6.9% from prior year’s revenues (see Table 2C -B). Increases included $10,307 from charges for services, $10,003 from interest and investment income, and $42 from rents and concessions, offset by a decrease of $5,077 from other non-operating revenues.
Charges for services were $214,154, an increase of $10,307 or 5.1%, mainly due to increases of $12,819 in revenue from City departments mainly due to average rate increase and lower allowance for uncollectible, $9,432 in resale of capacity to CleanPowerSF due to excess energy, $2,867 in sales to retail customers from increased consumption, and $1,055 from Treasure Island due to average rate increase, offset by a decrease of $15,866 mainly due to wholesale revenue from lower Congestion Revenue Right (CRR) credits from the California Independent System Operator (CAISO). Interest and investment income was $13,744, an increase of $10,003 mainly due to unrealized gain in City Treasury pooled investments attributed to improved fair value of investments and higher interest rates. Rents increased by $42 or 26.9% to $198 mainly due to higher collections from recreational rentals and new leases.
Other non-operating revenues were $8,528, a decrease of $5,077 or 37.3%, mainly due to decreases of $4,449 in revenue received in prior year for the Power System Mitigation Project, $567 in State grants revenue for the Moccasin Storm Project and Rim Fire Project related to emergency repairs, $344 in Federal grants revenue from the Rim Fire Project and California Arrearages Payment Program (CAPP) ended in prior year, $244 in settlement received in prior year due to labor litigation, and $78 in miscellaneous revenue. These decreases were offset by an increase of $605 in Cap and Trade revenue due to increase of 12,157 allowances sold.
Total operating expenses, excluding interest expenses, other non- operating expenses, and amortization of premium, discount, and issuance costs, increased by $9,611 or 5.0% to $201,163. Increases included $14,217 in other operating expenses mainly due to higher project spending for the Winter Storm Projects, $9,437 in personnel services due to higher pension expenses, 4.75% increase in COLA, and implementation of GASB Statement No. 101, Compensated Absences , $2,804 in contractual services for construction contracts and engineering services, and $583 in depreciation and amortization related to additional facilities and improvements placed in service. These increases were offset by decreases of $14,715 in general and administrative expenses due to lower judgments and claims expenses, $1,846 in services provided by other departments mainly due to lower legal service charges from City Attorney’s Office, $708 in purchased electricity and transmission, distribution, and other power costs mainly related to transmission and related CAISO costs, and $161 in materials and supplies for electrical supplies.
Interest expenses increased by $4,986 or 52.6% due to higher outstanding bonds from issuance of 2023 Series A Revenue Bonds. Amortization of premium and discount decreased by $576 due to costs of issuance for 2023 Series A Revenue Bonds.
Other non-operating expenses were $99, a decrease of $128 or 56.4% mainly due to lower incentive payments for Electric Vehicle Charge Program. Capital contributions of $29,200 were for assets at Pier 70, Treasure Island, and Yerba Buena Island. Transfer out of $108 included $76 to General Fund for Public Power Expansion Project and $32 to the Office of the City’s Administrator for the Surety Bond Program.
As a result of the above activities, net position for the year ended June 30, 2024 increased by $47,501 or 9.2% compared to prior year.
*The fiscal year 2024 results of operations narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
48 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The following table summarizes CleanPowerSF’s revenues, expenses, and changes in net position.
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
CleanPowerSF Results of Operations, Fiscal Year 2025
CleanPowerSF’s total revenues were $440,999, a $68,115 or 18.3% increase over prior year (see Table 2C- C).
Charges for services increased by $63,202 or 17.2% mainly due to increases of $45,476 in electricity sales to retail and commercial customers from 8.5% average rate increase and 112,113 MWh or 3.9% consumption increase, $10,267 in higher capacity sales to counterparties, and $7,459 in wholesale sales due to excess energy. Capacity sales are based on availability. Interest and investment income was $10,482, an increase of $4,578 due to higher interest rates and higher cash balances. Other non -operating revenue increased by $335 mainly due to non- refundable deposits for the interconnections process enhancement project.
Total operating expenses, excluding interest expenses and non-operating expenses were $372,178, an increase of $60,625 or 19.5% from prior year. Purchased electricity and transmission, distribution, and other power costs increased by $58,038 due to increased pricing in power market and higher customer power consumption. Other increases included $2,894 in personnel services due to 3.0% COLA increase and increased labor charges from Hetchy Power, $1,444 in contractual services, depreciation, materials and supplies, and other operating expenses mainly due to increase in CleanPowerSF’s share of rent at 525 Golden Gate and higher management consulting fees and software licensing fees. These increases were offset by a decrease of $1,751 in services provided by other departments and general and administrative expenses mainly due to support services from Hetchy Power was posted directly to personnel services in current year and lower judgment and claims expenses. Other non - operating expenses decreased by $538 mainly due to lower payments for the neighborhood steward program in current year.
As a result of the above activities, net position for the year ended June 30, 2025 increased by $68,477 or 38.4% compared to prior year.
CleanPowerSF Results of Operations, Fiscal Year 2024*
CleanPowerSF’s total revenues were $372,884, a $44,204 or 13.4% increase over prior year (see Table 2C -C).
Charges for services increased by $39,817 or 12.2% mainly due to increases of $38,403 in electricity sales to retail and commercial customers from 15.0% average rate increase and $3,606 in wholesale sales due to excess energy, offset by $2,192 in lower capacity sales to counter parties. Capacity sales are based on availability.
Interest and investment income was $5,904, an increase of $5,499 mainly due to unrealized gain in City Treasury pooled investments attributed to improved fair value of investments and higher interest rates. Other non-operating revenue decreased by $1,112 mainly due to $1,173 decrease in Federal CAPP grants which ended in prior year, Restated 2025 - 2024 2024 - 2023
2025 2 024* 2023 Change Change
Revenues:
Charges for services $ 429,796 366,594 326,777 63,202 39,817 Interest and investment income 10,482 5,904 405 4,578 5,499 Other non-operating revenues 721 386 1,498 335 (1,112) Total revenues 440,999 372,884 328,680 68,115 44,204 Expenses:
Operating expenses 372,178 311,553 294,780 60,625 16,773 Interest expenses 5 — 1 5 (1)
Non-operating expenses 339 877 218 (538) 659
Total expenses 372,522 312,430 294,999 60,092 17,431 Change in net position 68,477 60,454 33,681 8,023 26,773 Net position at beginning of year
Beginning of year as previously reported 178,142 118,001 84,320 60,141 33,681 Cumulative effect of accounting change — (313) — 313 (313) Net position at beginning of year as restated 178,142 117,688 84,320 60,454 33,368 Net position at end of year $ 246,619 178,142 118,001 68,477 60,141 Table 2C – C
Proprietary Fund – CleanPowerSF
Comparative Condensed Revenues, Expenses, and Changes in Net Position Years ended June 30, 2025, 2024, and 2023
49 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
offset by an increase of $61 in revenue mainly from Disadvantaged Communities (DAC) Programs.
Total operating expenses, excluding interest expenses and non -operating expenses were $311,553, an increase of $16,773 or 5.7% from prior year. Purchased electricity and transmission, distribution, and other power costs increased by $19,517 due to volatile and increased pricing in power market. Other increases included $490 in services provided by other departments mainly due to higher legal service charges from City Attorney’s Office and $3 in material and supplies mainly for minor data processing equipment. These increases were offset by decreases of $1,378 in personnel services due to lower OPEB obligations based on actuarial reports, $739 in other operating expenses mainly due to recognition of grant expense related to CAPP in prior year, $552 in general and administrative expenses due to lower judgments and claims expenses, $315 in contractual services mainly due to lease termination at 544 Golden Gate, and $253 in depreciation and amortization related to fewer leases and subscription assets. Other non- operating expenses increased by $659 mainly due to rebates for the Electrify My Ride Program. Interest expenses decreased by $1 related to SBITAs.
As a result of the above activities, net position for the year ended June 30, 2024 increased by $60,141 or 51.0% compared to prior year.
*The fiscal year 2024 results of operations narrative was updated to reflect the restatements from GASB Statement No. 101, Compensated Absences.
Capital Assets
Department-wide Business Type Activities
The following table summarizes the department-wide changes in capital assets. Detailed discussion follows for each proprietary fund.
The following table summarizes Water’s changes in capital assets.
2025 - 2024 2024 - 2023
2025 2 024 2023 Change Change
Facilities, improvements, machinery, and equipment $ 8,960,518 8,137,674 7,865,615 822,844 272,059 Intangible assets 31,566 32,694 33,816 (1,128) (1,122) Land and rights-of-way 163,075 163,075 163,075 — —
Land Improvements 7,630 9,311 6,733 (1,681) 2,578
Construction work in progress 4,162,556 3,915,730 3,130,427 246,826 785,303 Right-to-use lease and subscription assets 11,144 3,644 6,936 7,500 (3,292) Total $ 13,336,489 12,262,128 11,206,602 1,074,361 1,055,526 Table 3
Business Type Activities
Capital Assets, Net of Accumulated Depreciation and Amortization As of June 30, 2025, 2024, and 2023
2025 - 2024 2024 - 2023
2025 2 024 2023 Change Change
Facilities, improvements, machinery, and equipment $ 5,017,968 5,052,639 5,005,667 (34,671) 46,972 Intangible assets 3,050 2,657 2,331 393 326
Land and rights-of-way 113,322 113,322 113,322 — —
Construction work in progress 853,267 606,804 526,994 246,463 79,810 Right-to-use lease and subscription assets 3,692 3,045 4 ,638 647 (1,593) Total $ 5,991,299 5 ,778,467 5,652,952 212,832 125,515 Table 3A
Proprietary Fund – Water
Capital Assets, Net of Accumulated Depreciation and Amortization As of June 30, 2025, 2024, and 2023
50 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Water Capital Assets, Fiscal Year 2025
The Water Enterprise has net capital assets of $5,991,299 invested in a broad range of utility capital assets as of June 30, 2025 (see Table 3A). The investment in capital assets includes land, facilities, improvements, water treatment plants, aqueducts, water transmission, distribution mains, water storage facilities, pump stations, water reclamation facilities, machinery, and equipment. The Water Enterprise’s net revenue and long- term debt are used to finance capital investments. Capital assets, net of accumulated depreciation and amortization, increased by $212,832 from the prior year. Facilities, improvements, machinery, and equipment decreased by $34,671 mainly due to depreciation. Intangible assets increased by $393 mainly due to Maximo improvements and Customer Care & Billing application additions. Land and rights- of-way were unchanged. Construction work in progress increased by $246,463 mainly from the Sunol Valley Water Treatment Plant Ozonation and New CDD Headquarters projects. Right -to-use lease and subscription assets increased by $647 due to more leases and subscription assets.
As of June 30, 2025 and 2024, the Water Enterprise had capital commitments of $447,672 and $225,678, respectively.
Major additions to construction work in progress during the year ended June 30, 2025 include the following:
Major land depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service, including transfers of completed projects from construction work in progress, during the year ended June 30, 2025 include the following:
See Note 4 for additional information about capital assets.
Sunol Valley Water Treatment Plant Ozonation $ 40,786
New San Francisco Water Division Headquarters 40,244
San Joaquin Pipeline Valve and Safe Entry Improvements 26,705 Mountain Tunnel Improvements 20,580
Skyline Ridge Trail 17,978
Water Main Replacement - WD-2708 Geary Blvd from 32nd Avenue to Stanyan Street 11,498 Lead Component Service Program 9,098
New services for water installation 9,092
San Andreas Reservoir Road Improvements 7,152
Renewed Water Service Facilities 6,791
Water Main Replacement - WD-2848 Gold Mine Drive from Topaz Way to Diamond Heights Blvd 6,646 Water Main Replacement - WD-2801 Hampshire and York Streets from Mariposa to Cesar Chavez Street 6,183 Millbrae Campus Improvements 5,454
Water Main Replacement - WD-2765 Jersey Street from Douglass to Church Street 5,414 O'Shaughnessy Dam Outlet Works Phase 1 5,136
Other project additions individually below $5,000 121,781 Total $ 340,538
Mission Rock Auxiliary Water Supply System $ 15,467
San Andreas Reservoir Road Improvement - Soldier Pile Retaining Wall with Tiebacks 10,203 Renewed Water Service Lines 9,098
New Water Service Facilities 9,092
Water Main Replacement - WD-2848 Gold Mine Drive from Topaz Way to Diamond Heights Blvd 8,637 Water Main Replacement - WD-2874 Joost Avenue from Ridgewood Avenue to Congo Street 8,169 Renewed Water Service Facilities 6,791
Bay Division Pipeline No. 4 Slip Lining Pipe at Lafayette Street 5,098 Other items individually below $5,000 50,055
Total $ 122,610
51 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Water System Improvement Program (WSIP)
The WSIP delivers capital improvements that enhance the Water Enterprise’s ability to provide reliable, affordable, high-quality drinking water to its 27 wholesale customers and regional retail customers in Alameda, Santa Clara, and San Mateo Counties, as well as approximately 800,000 residential customers in San Francisco, in an environmentally sustainable manner. The program is structured to cost-effectively meet water quality requirements and long-term water supply objectives, as well as improve seismic and delivery reliability.
Overall, the $4.8 billion WSIP to upgrade the City of San Francisco’s regional and local drinking water systems is 99% completed with $4.8 billion of project appropriations expended through fiscal year ended June 30, 2025. The program consists of 35 local projects located within San Francisco and 52 regional projects spread over seven different counties from the Sierra Foothills to San Francisco. As of June 30, 2025, 35 local projects were completed. For regional projects, 48 projects were completed, the Alameda Creek Recapture is in planning phase, Regional Groundwater Storage is under construction, the Bioregional it does not include construction. The expected completion date is June 2032. Additional details regarding the WSIP are available at https://sfpuc.gov/construction-contracts/water-infrastructure-improvements .
Water Capital Assets, Fiscal Year 2024
The Water Enterprise has net capital assets of $5,778,467 invested in a broad range of utility capital assets as of June 30, 2024 (see Table 3). The investment in capital assets includes land, facilities, improvements, water treatment plants, aqueducts, water transmission, distribution mains, water storage facilities, pump stations, water reclamation facilities, machinery, and equipment. The Water Enterprise’s net revenue and long-term debt are used to finance capital investments. Capital assets, net of accumulated depreciation and amortization, increased by $125,515 from the prior year. Facilities, improvements, machinery, and equipment increased by $46,972 mainly due to additions relating to various Water Main Replacement projects. Intangible assets increased by $326 mainly due to Maximo improvements and Software as a Service Applications additions. Land and rights -of-way were unchanged. Construction work in progress increased by $79,810 mainly from the San Joaquin Pipeline Valve and Safe Entry Improvements and Mountain Tunnel Improvement projects. Right -to-use lease and subscription assets decreased by $1,593 due to fewer leases and subscription assets.
As of June 30, 2024 and 2023, the Water Enterprise had capital commitments of $225,678 and $187,936, respectively.
Major additions to construction work in progress during the year ended June 30, 2024 include the following:
San Joaquin Pipeline Valve and Safe Entry Improvements $ 21,253 Mountain Tunnel Improvements 18,114
New City Distribution Division Headquarters 10,999
2023 March Winter Storm Joint Project 10,622
Lead Component Service Program 10,419
Water Main Replacement - WD-2847 Laidley/Castro to Harper/Bemis/Miguel/Various Side Streets 8,038 College Hill Reservoir Outlet and Pipeline 7,960
New services for water installation 7,195
Water Main Replacement - WD-2859 Taraval Segment B 6,482 Regional Groundwater Storage and Recovery 6,426
Skyline Ridge Trail 6,336
Water Main Replacement - WD-2801 Mariposa to Cesar Chavez/York/Hampshire Streets 6,289 Water Main Replacement - WD-2843 Diamond/27th/28th/Duncan Streets 5,675 Westside Recycled Water Project 5,444
San Andreas Reservoir Road Improvements 5,358
Other project additions individually below $5,000 84,360 Total $ 220,970
52 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Major depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service, including transfers of completed projects from construction work in progress, during the year ended June 30, 2024 include the following:
See Note 4 for additional information about capital assets.
Water System Improvement Program (WSIP)
The WSIP delivers capital improvements that enhance the Water Enterprise’s ability to provide reliable, affordable, high-quality drinking water to its 27 wholesale customers and regional retail customers in Alameda, Santa Clara, and San Mateo Counties, as well as approximately 800,000 residential customers in San Francisco, in an environmentally sustainable manner. The program is structured to cost-effectively meet water quality requirements and long-term water supply objectives, as well as improve seismic and delivery reliability.
Overall, the $4.8 billion WSIP to upgrade the City of San Francisco’s regional and local drinking water systems is 99% completed with $4.8 billion of project appropriations expended through fiscal year ended June 30, 2024. The program consists of 35 local projects located within San Francisco and 52 regional projects spread over seven different counties from the Sierra Foothills to San Francisco. As of June 30, 2024, 35 local projects were completed. For regional projects, 48 projects were completed, the Alameda Creek Recapture and Regional Groundwater Storage projects are under construction, the Bioregional Habitat Restoration project is in close -out, and Long-Term Mitigation Endowment project is not applicable as it does not include construction. The expected completion date is June 2032. Additional details regarding the WSIP are available at https://www.sfpuc.gov/construction-contracts/water-infrastructure-improvements .
The following table summarizes Wastewater’s changes in capital assets.
Water Main Replacement - WD-2859 Taraval Segment B $ 15,052 Water Main Replacement - WD-2843 Diamond/27th/28th/Duncan Streets 11,814 Water Main Replacement - WD-2847 Laidley/Castro to Harper/Bemis/Miguel/Various Side Streets 10,882 Renewed Water Service Lines 10,419
Harry Tracy Water Treatment Plant Filters No. 1-6 Stainless Steel Underdrains 10,356 Water Main Replacement - WD-2806 Vicente Street/19th to 25th Avenue 9,315 Water Main Replacement - WD-2718 Prospect/Fair/Coso Avenues/Coleridge Street 9,173 Contributed Capital - Yerba Buena Island 1.34 mg Prestressed Concrete Water Storage Tanks 8,770 Contributed Capital - Pier 70 Phase 1 Auxiliary Water Supply System Pipe Network 8,648 New Water Service Facilities 7,195
Auxiliary Water Supply System - Pipeline at Clarendon Avenue 6,871 Contributed Capital - Pier 70 Phase 1 Low Pressure Water Pipe Network 6,789 2023 March Emergency Major Road Repair - Cherry Lake Road 6,679 Potable Emergency Firefighting Water System - Pipeline at 19th Avenue 6,489 Other items individually below $5,000 72,425
T
otal $ 200,877
2025 - 2024 2024 - 2023
2025 2024 2023 Change Change
Facilities, improvements, machinery, and equipment $ 3,365,635 2 ,549,177 2,393,051 816,458 156,126 Intangible assets 5,090 6,373 7,333 (1,283) (960) Land and rights-of-way 44,572 44,572 44,572 - - Land Improvements 7,630 9,311 6,733 (1,681) 2,578 Construction work in progress 2,855,921 2,878,789 2,232,963 (22,868) 645,826 Right-to-use lease and subscription assets 6,005 188 1,694 5,817 (1,506) Total $ 6,284,853 5,488,410 4,686,346 796,443 802,064 Table 3B
Proprietary Fund – Wastewater
Capital Assets, Net of Accumulated Depreciation and Amortization As of June 30, 2025, 2024, and 2023
53 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Capital Assets, Fiscal Year 2025
The Wastewater Enterprise has capital assets of $6,284,853 net of accumulated depreciation and amortization, invested in a broad range of utility capital assets as of June 30, 2025 (see Table 3B). This amount represents an increase of $796,443 or 14.5% from prior fiscal year. As of June 30, 2025, the Wastewater Enterprise had capital commitments of $547,063. The investment in capital assets includes land, buildings, improvements, wastewater treatment plants, sewer pipes and mains, underground transport and storage boxes, pump stations, machinery, and equipment. Facilities, improvements, machinery, and equipment increased by $816,458 or 32.0%. Right -to- use lease and subscription assets increased by $5,817 or 3,094.1% due to lease and subscriptions additions in current year, net of amortization. Construction work in progress decreased by $22,868 or 0.8%. Land improvements decreased by $1,681 or 18.1% due to depreciation. Intangible assets decreased by $1,283 or
20.1% due to amortization.
Major additions to construction work in progress during the year ended June 30, 2025 include the following:
Major depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service, including transfers of completed projects from construction work in progress, during the year ended June 30, 2025 include the following:
See Note 4 for additional information about capital assets.
Southeast Plant Biosolids Digester Facilities Project $ 507,033 New Treasure Island Wastewater Treatment Plant Capital Improvements 85,564 Southeast Plant New Headworks (Grit) Replacement 43,824 Large Diameter Sewer Projects and Channel Force Main Intertie 25,430 Oceanside Plant Digester Gas Handling Utilization Upgrade 12,729 WW-753 Hayes Valley Sewer Improvements 12,386
WW-748 As Needed Spot Sewer Replacement Number 45 11,788 Southeast Plant Power Feed and Primary Switchgear Upgrades 9,962 Southeast Plant Facility-Wide Distributed Control System Upgrades 6,837 WW-726 Various Locations Sewer Replacement Number 15 6,549 Westside Pump Station Reliability Improvements 6,525
Lower Alemany Area Stormwater Improvement Project 6,223 Southeast Plant / Southeast Community Heating Ventilation Air Conditioning & Mechanical Upgrades 5,806 Folsom Area Stormwater Improvement Project 5,720
Folsom Area Stormwater Phase 2 5,568
New Trades and Maintenance Buildings 5,469
Primary Treatment Southeast Plant Buildings 040 and 041 5,357 WW-725 Various Locations Sewer Replacement Number 14 5,336 Oceanside Plant Condition Assessment Improvements - Part 2 4,611 Channel Pump Station Improvements 4,301
Other project additions individually below $4,000 94,001 Total $ 871,019
Southeast Plant New Headworks (Grit) Replacement $ 712,664 North Shore Pump Station Wet Weather Improvements 44,914 Large Diameter Sewer Projects and Channel Force Main Intertie 17,672 Taraval Sewer Improvements 17,481
WW-716 As-Needed Sewer Replacement Number 44 12,036
Folsom Area Stormwater Phase 2 10,454
Public Works Various Locations Number 55 Infrastructure Improvements 10,393 Public Works Various Location Number 53 Infrastructure Improvements 7,849 WW-705 Sewer Replacement Number 10 7,082
Oceanside Plant Condition Assessment Improvements - Part 2 6,229 Southeast Plant Facility-Wide Distributed Control System Upgrades 4,944 Other project additions individually below $4,000 45,340 Total $ 897,058
54 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Sewer System Improvement Program (SSIP)
The Sewer System Improvement Program (SSIP) is a SFPUC’s wastewater capital improvement program which includes multiple projects to improve the existing wastewater system. The implementation of the SSIP projects were originally phased over 20 years to maintain ratepayer affordability and minimize impacts to communities throughout the City. On March 22, 2016, the refined program scope and budget for $7.0 billion was endorsed by the Commission along with the baseline for scope, schedule, and budget for Phase 1 projects totaling $2.9 billion.
The revised program is referred to as the “2016 SSIP Baseline”. The SSIP Phase 1 Baseline Budget and Schedule were revised starting in 2018, resulting in an approved budget of $4.7 billion as of June 30, 2025.
As of June 30, 2025, SSIP Phase 1 includes 70 projects in various stages: 54 projects or 77.1% totaling $570 million were completed, 2 projects in multiple phases, 4 projects in pre -construction phase, 7 projects in construction phase, and 3 projects in close -out phase. The Mariposa Dry -Weather Pump Station & Force Main Improvements Project was completed on December 31, 2024 with reported project expenditures of $31.3 million.
The project scope consists of demolishing the existing pump station building, underground structure, wet well, electrical system, and associated assets to make room for a new pump station. The existing dry weather force main downstream of the pump station was also replaced to accommodate the increased flows. Additionally, construction at the Southeast Plant on the New Headworks (Grit) Replacement is progressing, with the New Headworks Facility reaching substantial completion and demolition of the old headworks facility underway. The project is currently over 90% complete, with project completion forecasted for Fall 2027. As of June 30, 2025, total SSIP program expenditures totaled $3.9 billion. Additional details regarding the SSIP are available at https://www.sfpuc.gov/construction-contracts/sewer-system-improvement-program .
Wastewater Capital Assets, Fiscal Year 2024
The Wastewater Enterprise has capital assets of $5,488,410, net of accumulated depreciation and amortization, invested in a broad range of utility capital assets as of June 30, 2024 (see Table 3B). This amount represents an increase of $802,064 or 17.1% from prior fiscal year. As of June 30, 2024, the Wastewater Enterprise had capital commitments of $667,703. The investment in capital assets includes land, buildings, improvements, wastewater treatment plants, sewer pipes and mains, underground transport and storage boxes, pump stations, machinery, and equipment. Construction work in progress increased by $645,826 or 28.9%. Facilities, improvements, machinery, and equipment increased by $156,126 or 6.5%. Land improvements increased by $2,578 or 38.3% relating to improvements for the Ocean Beach Project. Right -to-use lease and subscription assets decreased by $1,506 or 88.9% due to termination of leases and subscriptions and amortization. Intangible assets decreased by $960 or 13.1% due to amortization.
Major additions to construction work in progress during the year ended June 30, 2024 include the following:
Southeast Plant Biosolids Digester Facilities Project $ 486,344 Southeast Plant New Headworks (Grit) Replacement 91,920 New Treasure Island Wastewater Treatment Plant Capital Improvements 57,168 Large Diameter Sewer Projects and Channel Force Main Intertie 27,993 WW-716 As-Needed Sewer Replacement Number 44 11,693
Taraval Sewer Improvements 10,455
Southeast Plant Power Feed and Primary Switchgear Upgrades 9,968 Westside Pump Station Reliability Improvements 9,691
Southeast Plant / Southeast Community Heating Ventilation Air Conditioning & Mechanical Upgrades 9,117 45th Avenue, 46th Avenue, 47th Avenue, Vicente Street, Wawona Street, and Sloat Boulevard Sewer Replacement 7,810 Oceanside Plant Condition Assessment Improvements - Part 2 7,666 Oceanside Plant Digester Gas Handling Utilization Upgrade 7,173 North Shore Pump Station Wet Weather Improvements 6,278 WW-715 As-Needed Sewer Replacement Number 43 6,272
Lower Alemany Area Stormwater Improvement Project 5,983 Southeast Plant Facility-Wide Distributed Control System Upgrades 5,583 Folsom Area Stormwater Improvement Project 5,578
Folsom Area Stormwater Phase 2 4,825
Green Infrastructure Grant Projects 4,716
Public Works Various Location Number 53 Infrastructure Improvements 4,377 Public Works Various Locations Number 55 Infrastructure Improvements 4,194 Other project additions individually below $4,000 94,639 Total $ 879,443
55 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Major depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service, including transfers of completed projects from construction work in progress, during the year ended June 30, 2024 include the following:
See Note 4 for additional information about capital assets.
Sewer System Improvement Program (SSIP)
The Sewer System Improvement Program (SSIP) is the SFPUC’s wastewater capital improvement program which includes multiple projects to improve the existing wastewater system. The implementation of the SSIP projects were originally phased over 20 years to maintain ratepayer affordability and minimize impacts to communities throughout the City. On March 22, 2016, the refined program scope and budget for $7.0 billion was endorsed by the Commission along with the baseline for scope, schedule, and budget for Phase 1 projects totaling $2.9 billion.
The revised program is referred to as the “2016 SSIP Baseline”.
As of June 30, 2024, 49 projects or 70.0% totaling $525 million were completed, 1 project in multiple phases, 5 projects in pre-construction phase, 7 projects in construction phase, and 8 projects in close-out phase. The Central Bayside System Improvement Project (CBSIP) was completed on June 30, 2023 with reported project expenditures of $36.7 million. The CBSIP provides collection system enhancement to the Channel and Islais Creek urban watersheds, including needed redundancy for the existing Channel Force Main, infrastructure improvements to sewers/pump stations, and stormwater management through elements of both green and grey infrastructure.
Major components of the project consist of a tunnel to transport, via gravity, dry and wet -weather flows from the Channel and North Shore watersheds to the Southeast Water Pollution Control Plant (SEP), a large all -weather pump station to lift the flows into the SEP, improvements to Channel Pump Station, and green/gray infrastructure improvements within the watersheds. The New Headworks (Grit) Replacement Project is on-going construction.
The project is reported at 86.8% complete and forecasted final completion is on May 30, 2025. As of June 30, 2024, total SSIP program expenditures totaled $3.2 billion. Additional details regarding the SSIP are available at https://sfpuc.gov/construction-contracts/sewer-system-improvement-program .
56 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The following table summarizes Hetchy Water’s changes in capital assets.
Hetchy Water Capital Assets, Fiscal Year 2025
Hetchy Water has capital assets of $250,330, net of accumulated depreciation and amortization, invested in a broad range of utility capital assets as of June 30, 2025 (see Table 3C -A). This amount represents an increase of $12,844 or 5.4%, primarily due to increases of $12,874 in construction work in progress and $462 in right -to-use building lease and intangible subscription assets, offset by decreases of $285 in facilities, improvements, machinery, and equipment and $207 in amortization of intangible assets.
For the year ended June 30, 2025, Hetchy Water’s major additions to construction work in progress totaled $18,952. Major depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service totaled $6,387 (see Table 3D).
Hetchy Water Capital Assets, Fiscal Year 2024
Hetchy Water has capital assets of $237,486, net of accumulated depreciation and amortization, invested in a broad range of utility capital assets as of June 30, 2024 (see Table 3C -A). This amount represents an increase of $17,450 or 7.9%, primarily due to increases of $13,434 in construction work in progress and $4,315 in facilities, improvements, machinery, and equipment, offset by decreases of $207 in amortization of intangible assets and $92 in right-to-use lease and subscription assets.
For the year ended June 30, 2024, Hetchy Water’s major additions to construction work in progress totaled $23,029. Major depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service totaled $10,538 (see Table 3E).
See Note 4 for additional information about capital assets.
The following table summarizes Hetchy Power’s changes in capital assets.
2025 - 2024 2024 - 2023
2025 2024 2023 Change Change
Facilities, improvements, machinery, and equipment $ 137,935 138,220 133,905 (285) 4,315 Intangible assets 9,753 9,960 10,167 (207) (207)
Land and rights-of-way 3,232 3,232 3,232 — —
Construction work in progress 98,758 85,884 72,450 12,874 13,434 Right-to-use lease and subscription assets 652 190 282 462 (92) Total $ 250,330 237,486 220,036 12,844 17,450
Table 3C – A
Proprietary Fund – Hetchy Water
Capital Assets, Net of Accumulated Depreciation and Amortization As of June 30, 2025, 2024, and 2023
2025 - 2024 2024 - 2023
2025 2024 2023 Change Change
Facilities, improvements, machinery, and equipment $ 438,980 397,638 332,992 41,342 64,646 Intangible assets 13,673 13,704 13,985 (31) (281)
Land and rights-of-way 1,949 1,949 1,949 — —
Construction work in progress 354,610 344,253 298,020 10,357 46,233 Right-to-use lease and subscription assets 709 208 292 501 (84) Total $ 809,921 757,752 647,238 52,169 110,514
Capital Assets, Net of Accumulated Depreciation and Amortization As of June 30, 2025, 2024, and 2023
Proprietary Fund – Hetchy Power
Table 3C – B
57 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Power Capital Assets, Fiscal Year 2025
Hetchy Power has capital assets of $809,921, net of accumulated depreciation and amortization, invested in utility capital assets as of June 30, 2025 (see Table 3C -B). This amount represents an increase of $52,169 or 6.9%, primarily due to increases of $41,342 in facilities, improvements, machinery, and equipment, $10,357 in construction work in progress, and $501 in right-to-use building lease and intangible subscription assets, offset by a decrease of $31 in amortization of intangible assets.
For the year ended June 30, 2025, Hetchy Power’s major additions to construction work in progress totaled $70,435. Major depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service totaled $64,850 (see Table 3D).
Hetchy Power Capital Assets, Fiscal Year 2024
Hetchy Power has capital assets of $757,752, net of accumulated depreciation and amortization, invested in utility capital assets as of June 30, 2024 (see Table 3C -B). This amount represents an increase of $110,514 or 17.1%, primarily due to increases of $64,646 in facilities, improvements, machinery, and equipment and $46,233 in construction work in progress, offset by decreases of $281 in amortization of intangible assets and $84 in right-to- use lease and subscription assets.
For the year ended June 30, 2024, Hetchy Power’s major additions to construction work in progress totaled $98,413. Major depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service totaled $82,741 (see Table 3E).
See Note 4 for additional information about capital assets.
CleanPowerSF Capital Assets, Fiscal Year 2025
CleanPowerSF has capital assets of $86, net of accumulated amortization, for right -to-use subscription assets as of June 30, 2025 (see table 3C-C).
See Note 4 for additional information about capital assets.
CleanPowerSF Capital Assets, Fiscal Year 2024
CleanPowerSF has capital assets of $13, net of accumulated amortization, for right -to-use subscription assets as of June 30, 2024 (see table 3C-C).
See Note 4 for additional information about capital assets.
2025 - 2024 2024 - 2023
2025 2024 2023 Change Change
Right-to-use subscription assets $ 86 13 30 73 (17) Total $ 86 13 30 73 (17)
Table 3C – C
Proprietary Fund – CleanPowerSF
Capital Assets, Net of Accumulated Depreciation and Amortization As of June 30, 2025, 2024, and 2023
58 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Major additions to construction work in progress, depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service, including transfers of completed projects from construction work in progress, during the years ended June 30, 2025 include the following:
Hetchy Hetchy 2025
Water Power Total
Mountain Tunnel Improvement $ 4,442 5,429 9,871
Moccasin Powerhouse Rewind — 9,829 9,829
O'Shaughnessy Dam Outlet Works Phase 1 4,094 5,002 9,096 Power Asset Acquisition Analysis — 8,107 8,107
Repair and Replacement Life Extension Program and Powerhouse 2,769 1,749 4,518 Moccasin Powerhouse Bypass and Facilities Upgrades 971 2,917 3,888 Transmission Line Clearance Mitigation — 3,767 3,767
Bay Corridor Transmission and Distribution — 3,277 3,277 Power Intervening Facilities — 3,228 3,228
Cluster 7 Mitigation — 3,135 3,135
City Distribution Division Facility - 2000 Marin Street — 2,523 2,523 Moccasin Wastewater Treatment 962 1,176 2,138
Sunnydale HOPE SF — 2,134 2,134
Treasure Island Capital Improvements — 1,772 1,772
Moccasin Dam Long Term Improvement 785 960 1,745
Other project additions individually below $1,500 4,929 15,430 20,359 Additions to Construction Work in Progress $ 18,952 70,435 89,387 Bay Corridor Transmission and Distribution Electrical Duct Banks $ — 37,887 37,887 Power Intervening Facilities — 3,210 3,210
Potrero HOPE SF Backbone — 2,152 2,152
Contributed Capital - Mission Rock Power System Improvement — 1,906 1,906 Hetch Hetchy Reservoir Boat Ramp Improvement 838 1,022 1,860 Treasure Island Distribution Backbone — 1,772 1,772
Moccasin Low Head Powerhouse — 1,673 1,673
Other project additions individually below $1,500 5,549 15,228 20,777 Facilities, Improvements, Intangible Assets, Machinery, and Equipment Placed in Service $ 6,387 64,850 71,237 Table 3D
Proprietary Funds – Hetchy Water and Hetchy Power
Year ended June 30, 2025
Major Additions to Construction Work in Progress and Facilities, Improvements, Intangible Assets, Machinery, and Equipment Placed in Service 59 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Major additions to construction work in progress, depreciable facilities, improvements, intangible assets, machinery, and equipment placed in service, including transfers of completed projects from construction work in progress, during the years ended June 30, 2024 include the following:
Debt Administration
Department-wide Business Type Activities
The following table summarizes the department -wide outstanding debt, net of unamortized costs, discount, and premium. Detailed discussion follows for each proprietary fund.
Hetchy Hetchy 2024
Water Power Total
Cluster 7 Mitigation $ — 21,505 21,505
2 023 March Winter Storm 5,970 7,297 13,267
Moccasin Powerhouse Rewind — 12,636 12,636
Mountain Tunnel Improvement 3,611 4,413 8,024
Power Asset Acquisition Analysis — 7,770 7,770
Bay Corridor Transmission and Distribution — 7 ,658 7,658 O'Shaughnessy Dam Outlet Works Phase 1 3,282 4,012 7,294 Repair & Replacement Life Extension Program and Powerhouse 3,629 1,542 5,171 Sunnydale HOPE SF — 4,686 4,686
Intervening Facilities — 3,312 3,312
Pier 70 — 2,682 2,682
Moccasin Dam Long Term Improvement and Facilities Upgrade 1,698 2,075 3,773 Distribution Services Retail Customers — 1,899 1,899
SFO Substation — 1,833 1,833
Other project additions individually below $1,500 4,839 15,093 19,932 Additions to Construction Work in Progress $ 23,029 98,413 121,442 Transmission Line Clearance Mitigation - Lines 7/8 $ — 32,494 32,494 Contributed Capital - Pier 70 Streetlights and Trench — 16,896 16,896 2023 Emergency Cherry Lake Road Repair 5,050 6,172 11,222 Contributed Capital - Treasure Island Switchyard, Trench, and Streetlights — 9,698 9,698 2023 Emergency Hetch Hetchy Road Repair 1 ,424 1,740 3,164 Intervening Facilities — 2,323 2,323
Contributed Capital - Yerba Buena Island Trench — 1,862 1,862 Other project additions individually below $1,500 4,064 11,556 15,620 Facilities, Improvements, Intangible Assets, Machinery, and Equipment Placed in Service $ 10,538 82,741 93,279 Intangible Assets, Machinery, and Equipment Placed in Service Year ended June 30, 2024
Table 3E
Major Additions to Construction Work in Progress and Facilities, Improvements, Proprietary Funds – Hetchy Water and Hetchy Power
2025 - 2024 2024 - 2023
2025 2024 2023 Change Change
Bonds $ 9,250,953 7,968,487 7,638,688 1,282,466 329,799 Revenue notes — — 349,556 — (349,556)
Commercial paper 189,333 622,027 487,811 (432,694) 134,216 Certificates of participation 120,210 124,975 129,550 (4,765) (4,575) State revolving fund loans 666,641 577,632 482,316 89,009 95,316 1,394,652 922,431 122,357 472,221 800,074
Total $ 11,621,789 10,215,552 9,210,278 1,406,237 1,005,274 Water Infrastructure Finance and
Innovation Act (WIFIA) loans
Table 4
Business Type Activities
Outstanding Debt, Net of Unamortized Costs
As of June 30, 2025, 2024, and 2023
60 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Water Debt Administration
As of June 30, 2025, the Water Enterprise had $5,594,593 total debt outstanding, an increase of $90,754 over the prior year, as shown below in Table 4A. More detailed information about the Water Enterprise’s debt activity is presented in Notes 6, 7, 8 and 9 to the financial statements.
The increase of $224,091 in revenue bonds was due to increases of $1,511,695 in bond principal and $129,352 in bond premium from the issuances of the 2025 Series ABC and 2025 Series DEF water revenue refunding bonds and $10 in bond discount from amortization. These increases were offset by decreases of $1,206,240 in bond principal from refunding, $138,140 in bond principal from repayment, $41,467 in bond premium from bond refunding, $30,621 in bond premium from amortization, and $498 in bond discount from bond issuances.
Commercial paper decreased by $170,000, explained by a $312,400 decrease from refunding by the 2025 Series DEF revenue refunding bonds offset by a $142,400 increase from additional issuances. The Water Enterprise had $20,000 in taxable commercial paper as of June 30, 2025, and $190,000 in tax -exempt commercial paper as of June 30, 2024. The decrease of $3,402 in certificates of participation was from repayment. The $40,065 increase in SRF loans was from additional loans for the Mountain Tunnel Improvement and SF Westside Recycled Water projects.
Credit Ratings and Bond Insurance – The Water Enterprise carried underlying ratings of “Aa2” and “AA -” from Moody’s and S&P Global Ratings (S&P) on June 30, 2025, and “Aa2” and “AA-” from Moody’s and S&P on June 30, 2024, respectively.
Debt Service Coverage – Pursuant to the Amended and Restated Indenture, the Water Enterprise is required to collect sufficient net revenues each fiscal year, together with any Water Enterprise funds (except Bond Reserve Funds), which are available for payment of debt service and are not budgeted to be expended, at least equal to
1.25 times annual debt service for said fiscal year, and for the SFPUC’s debt service coverage policy, at least equal to 1.35 times annual debt service for said fiscal year. During fiscal years 2025 and 2024, the Water Enterprise’s net revenues, together with fund balances available to pay debt service and not budgeted to be expended, were sufficient to meet the rate covenant requirements under the Water Enterprise’s Amended and Restated Indenture and the SFPUC’s debt service coverage policy (see Note 9).
Debt Authorization – Pursuant to the Charter Section 8B.124, the Water Enterprise can incur indebtedness upon two-thirds vote of the Board of Supervisors, as approved by voters in Proposition E in November 2002. As of June 30, 2025, the Board of Supervisors has authorized the issuance of $6,157,510 in revenue bonds under Proposition E, with $5,305,913 issued against this authorization. The Water Enterprise can also incur indebtedness of up to $1,628,000 for improvements to the water system pursuant to Proposition A that was approved by the voters in November 2002. As of June 30, 2025, $1,499,230 of the $1,628,000 Proposition A authorized bonds were issued.
The Water Enterprise is also authorized to issue up to $750,000 in commercial paper.
Cost of Debt Capital – The Water Enterprise’s outstanding long-term debt has coupon interest rates ranging from
0.8% to 7.0% as of June 30, 2025, and 0.7% to 7.0% as of June 30, 2024. The Water Enterprise’s short -term debt has interest rates ranging from 2.6% to 4.4% during fiscal year 2025, and 2.2% to 5.2% during fiscal year 2024.
2025 - 2024 2024 - 2023
2025 2024 2023 Change Change
Revenue bonds $ 5,188,728 4,964,637 4,710,846 224,091 253,791 Commercial paper 20,000 190,000 371,459 (170,000) (181,459) Certificates of participation 85,830 89,232 92,499 (3,402) (3,267) State revolving fund loans 300,035 259,970 163,627 40,065 96,343 Total $ 5,594,593 5,503,839 5,338,431 90,754 165,408 Table 4A
Proprietary Fund – Water
Outstanding Debt, Net of Unamortized Costs
As of June 30, 2025, 2024, and 2023
61 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Debt Administration
As of June 30, 2025, 2024, and 2023, the Wastewater Enterprise’s outstanding debt comprising revenue bonds, revenue notes, commercial paper, certificates of participation, SRF, and WIFIA loans were $5,532,799, $4,290,112, and $3,551,970, respectively, as shown in Table 4B. Additional information about the Wastewater Enterprise’s debt activity is provided in Notes 6, 7, 8 and 9 to the financial statements.
The increase of $1,242,687 was mainly due to $1,217,971 new issuances of 2024 Series ABCD revenue bonds, including $74,996 original issue premium, $472,221 in new WIFIA loans including $16,324 capitalized interest for the Biosolids Digester Facilities Project, the Southeast Treatment Plant Improvement Project, and the Wastewater Capital Plan Resilience Program – Project 1, $55,221 in new SRF loans for the OSP Digester Gas Utilization Upgrade and SEP New Headworks (Grit) Replacement projects, and commercial paper additions. The increase in outstanding debt was offset by $342,021 in defeasance of commercial paper by the 2024 Series C and D revenue bonds issuance, $81,405 in defeasance of 2023 Series B and 2018 Series B revenue bonds by the 2024 Series B revenue bonds issuance, principal repayments of $35,370 in bonds, $5,629 in SRF loans, $900 in COP, and $37,401 in revenue bonds premium amortization and defeasance.
Credit Ratings and Bond Insurance – As of June 30, 2025 and 2024, the Wastewater Enterprise carried underlying ratings of “Aa2” and “AA” from Moody’s and S&P Global Ratings (S&P), respectively.
Debt Service Coverage – Pursuant to the Amended and Restated Indenture, the Wastewater Enterprise is required to collect sufficient net revenues each fiscal year, together with any Wastewater Enterprise funds (except Bond Reserve Funds), which are available for payment of debt service and are not budgeted to be expended, at least equal to 1.25 times annual debt service for said fiscal year, and for the SFPUC’s debt service coverage policy, at least equal to 1.35 times annual debt service for said fiscal year. During fiscal years 2025 and 2024, the Wastewater Enterprise’s net revenues, together with fund balances available to pay debt service and not budgeted to be expended, were sufficient to meet the rate covenant requirements under the Wastewater Enterprise’s Amended and Restated Indenture and the SFPUC’s debt service coverage policy (see Note 9).
Debt Authorization – Pursuant to the Charter Section 8B.124, the Wastewater Enterprise can incur indebtedness upon two-thirds vote of the Board of Supervisors. As of June 30, 2025, the Wastewater Enterprise had $8,052,607 in combined debt issuance authorization from the Board of Supervisors under Proposition E, with $5,625,155 issued against this authorization. The Wastewater Enterprise has a $1,250,000 authorized interim funding program, with $0 in tax -exempt commercial paper outstanding as of June 30, 2025 and $341,373 in tax- exempt commercial paper outstanding as of June 30, 2024.
Cost of Debt Capital – The coupon interest rates on the Wastewater Enterprise’s outstanding revenue bonds and revenue notes ranged from 1.0% to 5.8%, net of federal interest subsidy receipts on Build America Bonds at June 30, 2025. The 2009 Series D certificates of participation carried coupon interest rates from 6.4% to 6.5% in fiscal years 2025 and 2024, respectively. Short -term debt instruments bore interest rates between 3.6% to 3.8% in both fiscal years 2025 and 2024. The State revolving fund loans (CWSRF loans) carried original interest rates ranging from 0.8% to 1.8% during fiscal year 2025. In certain agreements, the State opted to apply administrative service and grant charges in lieu of interest payments; these charges do not affect the installment payments or increase total repayment amounts. The WIFIA loan carried interest rate of 1.5% during fiscal year 2025 and capitalized 2025 - 2024 2024 - 2023
2025 2024 2023 Change Change
Revenue bonds $ 3,748,846 2,685,051 2 ,736,910 1,063,795 (51,859) Revenue notes — — 349,556 — (349,556)
Commercial paper — 341,373 — (341,373) 341,373
Certificates of participation 22,695 23,595 24,458 (900) (863) State revolving fund loans 366,606 317,662 318,689 48,944 (1,027) 1,394,652 922,431 122,357 472,221 800,074
Total $ 5,532,799 4,290,112 3,551,970 1,242,687 738,142 Table 4B
Proprietary Fund – Wastewater
Outstanding Debt, Net of Unamortized Costs
As of June 30, 2025, 2024, and 2023
Water Infrastructure Finance and
Innovation Act (WIFIA) loans
62 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
interest added to the principal balance of the WIFIA loan on each Semi -Annual Payment Date occurring during the Capitalized Interest Period.
Hetchy Water Debt Administration
Hetchy Water did not have debt outstanding as of June 30, 2025 and 2024 . Debt, including bond issuances, associated with the funding of water -related, upcountry infrastructure capital improvements is issued through the Water Enterprise, and is reflected in the Water Enterprise’s financial statements.
Hetchy Power Debt Administration
As of June 30, 2025 and 2024, Hetchy Power had outstanding debt of $494,397 and $421,601, respectively, as shown in Table 4C. More detailed information about the Hetchy Power’s debt activity is presented in Notes 6, 7, 8 and 9 to the financial statements.
The increase of $72,796 was due to $78,679 from commercial paper issuance, offset by bonds and certificates of participation principal repayments of $4,062 and $1,821 in amortization of premium.
Credit Ratings and Bond Insurance – The Power Enterprise’s Power Revenue Bonds have been rated “AA-” by Fitch Inc and “AA” by S&P Global Ratings (S&P) as of June 30, 2025 and 2024, respectively.
In December 2020, Moody's Investors Service, ("Moody's") assigned a first -time A2 Issuer Rating to CleanPowerSF, with a stable outlook. Hetch Hetchy Water and Power contains the Power Enterprise as a separate enterprise fund, with CleanPowerSF a component unit of the Power Enterprise. CleanPowerSF is tracked and audited as a standalone fund, with financial statements, including revenues and expenses, separate and discrete from the Power Enterprise. As such, CleanPowerSF is deemed to be a separate credit from the Power Enterprise, with its own credit rating.
Debt Service Coverage – Pursuant to the Amended and Restated Indenture, the Power Enterprise is required to collect sufficient net revenues each fiscal year, together with any Power Enterprise funds (except Bond Reserve Funds), which are available for payment of debt service and are not budgeted to be expended, at least equal to
1.25 times annual debt service for said fiscal year, and for the SFPUC’s debt service coverage policy, at least equal to 1.35 times annual debt service for said fiscal year. The Series 2015 AB power revenue bonds represent the first series of senior lien revenue bonds of Hetchy Power. Pursuant to Power’s Master Trust Indenture, senior lien debt service coverage excludes debt service on subordinate obligations, such as Hetchy Power’s existing NCREBs and QECBs. During fiscal years 2025 and 2024, the Power Enterprise’s net revenues, together with fund balances available to pay debt service and not budgeted to be expended, were sufficient to meet the rate covenant requirements under the Power Enterprise’s Amended and Restated Indenture and the SFPUC’s debt service coverage policy (see Note 9).
Debt Authorization – Pursuant to Charter Section 9.107(6), the Power Enterprise can incur indebtedness upon three-fourths vote of the Board of Supervisors, for the purpose of the reconstruction or replacement of existing water facilities and electric power facilities, or combinations thereof, under the jurisdiction of the Public Utilities Commission. Pursuant to Charter Section 9.107(8), the Power Enterprise can issue revenue bonds, without voter 2025 - 2024 2024 - 2023
2025 2024 2023 Change Change
Certificates of Participation 2009 Series D (BABs) 11,685 12,148 12,593 (463) (445) Qualified Energy Conservation Bonds 2011 1,452 2,021 2,583 (569) (562) New Clean Renewable Energy Bonds 2015 1,193 1,343 1,491 (150) (148) 2015 Series A Revenue Bonds 34,647 34,819 34,985 (172) (166) 2015 Series B Revenue Bonds 1,103 2,033 2,948 (930) (915) 2021 Series A Revenue Bonds 86,076 88,375 89,303 (2,299) (928) 2021 Series B Revenue Bonds 58,080 59,142 59,622 (1,062) (480) 2023 Series A Revenue Bonds 130,828 131,066 — (238) 131,066 Commercial Paper 169,333 90,654 116,352 78,679 (25,698) Total $ 494,397 421,601 319,877 72,796 101,724
Table 4C
Proprietary Fund – Hetchy Power
Outstanding Debt, Net of Unamortized Costs
As of June 30, 2025, 2024, and 2023
63 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
approval, upon an affirmative vote of the Board of Supervisors, for the purpose of the acquisition, construction, installation, equipping, improvement, or rehabilitation of equipment or facilities for renewable energy and energy conservation. Pursuant to Proposition A, approved by the San Francisco voters on June 5, 2018, City Charter Section 8B.124 is amended to authorize the Power Enterprise to enter into indebtedness, including revenue bonds, notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two- thirds vote of the Board of Supervisors to reconstruct, replace, expand, repair, improve or construct new power facilities under the jurisdiction of SFPUC or for any other purpose of the Power Enterprise, and in compliance with City Charter Section 8B.124. Proposition A expressly prohibits the SFPUC from issuing bonds to finance the construction of power plants that generate electricity using fossil fuels or nuclear energy. As of June 30, 2025 and 2024, $287,460 of Hetchy Power revenue bonds were issued against existing authorization of $1,029,790.
Cost of Debt Capital – The Power Enterprise’s outstanding long-term senior lien debt consists of the 2015 Series AB, 2021 Series AB, and 2023 Series A Power Revenue Bond issued in May 2015, December 2021, and October 2023, respectively, which are issued under the Master Indenture and are senior in lien to all the other Power Enterprise’s outstanding debt obligations. Coupon interest rates range from 3.0% to 5.0%. The Power Enterprise has previously issued and incurred debt service on Tax Credit Bonds and certificates of participation, which constitute subordinate obligations. Interest rates on the Tax Credit Bonds, which include QECBs and NCREBs, ranging from 1.2% to 1.4% (net of the federal tax subsidy). Certificates of participation carried interest rates ranging from 2.0% to 6.5%. The Power Enterprise’s short -term debt issued under its commercial paper program has interest rates ranging from 2.7% to 3.7% and 2.8% to 3.7% during fiscal years 2025 and 2024, respectively.
CleanPowerSF Debt Administration
CleanPowerSF did not have debt outstanding as of June 30, 2025 and 2024.
Rates and Charges
Water Enterprise Retail Customers
Proposition E, as approved by the voters in November 2002, amended the City Charter by adding the new Article VIIIB, entitled “Public Utilities,” which changed the Commission’s ability to issue new revenue bonds and set retail water rates. For the retail water rate setting, the Commission is required to:
● Establish rates, fees, and charges based on cost of service; ● Retain an independent rate consultant to conduct cost of service studies at least every five years; ● Consider establishing new connection fees;
● Consider conservation incentives and lifeline rates;
● Adopt a rolling five-year forecast annually; and
● Establish a Rate Fairness Board.
Pursuant to the City and County of San Francisco Charter Section 8B.125, an independent rate study is performed at least once every five years. In compliance with City Charter section 8B.125, a rate study was completed in spring 2023. In May 2023, the Commission subsequently adopted three years of retail water rate increases from July 1, 2023 through June 30, 2026.
Other miscellaneous fees for service and charges were last approved in April 2024 to be effective July 1, 2024, and generally increase annually by the Consumer Price Index from the Controller’s Office of the City and County of San Francisco, or the 20- City Average Construction Index (CCI) published by Engineering News -Record (ENR) Magazine. All current SFPUC Rates Schedules and Fees are available at https://www.sfpuc.gov/accounts-
services/water-power-sewer-rates/rates.
64 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Water Enterprise Wholesale Customers
The Water Supply Agreement (WSA) prescribes the rate setting process for the wholesale water rates. The WSA has a 25-year term, beginning on July 1, 2009, with two 5-year extension options, and was most recently amended and restated in January 2023. Compared to the prior contract with the wholesale customers, the WSA changed the rate basis by which the capital cost recovery is determined. Rather than the “utility basis,” which sets rates using the cost of capital investments over the life of each asset, the WSA uses a “cash basis,” which sets rates using annual debt service costs for assets financed with debt or at the time of budget appropriation and spending for revenue-funded capital projects. The WSA requires the rate be calculated and set annually and includes a reconciliation between prior year revenues and expenses. Refer to Note 11 of the notes to financial statements for further discussion on the balancing account of the wholesale customers.
The following table is the Water Enterprise’s ten-year average rate adjustments:
1Four-year retail rate increases adopted and effective July 1, 2014. 2Four-year retail rate increases adopted and effective July 1, 2018. 3No retail rate increase adopted and effective July 1, 2022. 4Three-year rate increases adopted and effective July 1, 2023. 5Wholesale rates adopted annually.
Wastewater Enterprise
Proposition E, as approved by the voters in November 2002, amended the City Charter by adding the new Article VIIIB, entitled “Public Utilities,” which changed the Commission’s ability to issue new revenue bonds and set retail water rates. For the retail water rate setting, the Commission is required to:
● Establish rates, fees, and charges based on cost of service; ● Retain an independent rate consultant to conduct cost of service studies at least every five years; ● Consider establishing new connection fees;
● Consider conservation incentives and lifeline rates;
● Adopt a rolling five-year forecast annually; and
● Establish a Rate Fairness Board.
Pursuant to the City and County of San Francisco Charter section 8B.125, an independent rate study is performed at least once every five years. In compliance with City Charter section 8B.125, a water and wastewater rate study were completed in May 2023. The Commission subsequently adopted three years of wastewater rate increases from July 1, 2023 through June 30, 2026. Other miscellaneous fees for service and charges were last approved in April 2024 to be effective July 1, 2024, and generally increase annually by the Consumer Price Index from the Controller’s Office of the City and County of San Francisco, or the 20- City Average Construction Index (CCI) published by Engineering News -Record (ENR) Magazine. All current SFPUC Rates Schedules and Fees are available at https://www.sfpuc.gov/accounts-services/water-power-sewer-rates/rates.
July 1, 2016 10.0 1 —
July 1, 2017 7.0 1 —
July 1, 2018 9.0 2 —
July 1, 2019 8.0 2 —
July 1, 2020 7.0 2 —
July 1, 2021 7.0 2 —
July 1, 2022 — 3 15.9
July 1, 2023 5.0 4 9.7
July 1, 2024 5.0 4 8.8
July 1, 2025 5.0 4 2.3
Effective date Retail Wholesale5
Ten-year Average Rate Adjustments
65 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
1 Four-year rate increases adopted and effective July 1, 2014. 2 Four-year rate increases adopted and effective July 1, 2018. 3 No retail rate adjustment.
4 Three-year rate increases adopted and effective July 1, 2023.
The following table is the Wastewater Enterprise’s ten-year approved average rate adjustments:
Hetchy Water
Hetchy Water charges for services relate to the storage and delivery of water. The water -related portion of upcountry expenditures not covered by the small quantity of water sales to upcountry customers or other miscellaneous revenues are paid by an assessment to the Water Enterprise. Assessment fees were $49,241 and $46,266 for the years ended June 30, 2025 and 2024, respectively. In fiscal year 2026, the assessment fees will be $54,147, an increase of $4,906 or 10.0% as reflected in the fiscal year 2026 adopted budget. The increase is primarily driven by higher operating expenses for the water share of Hetch Hetchy Water and Power.
Hetchy Power
Hetchy Power charges for services relate to power generation and electricity delivery to contractual, municipal, and retail customers.
All current SFPUC Rates Schedules and Fees are available at https://www.sfpuc.gov/accounts-s ervices/water-
power-sewer-rates/rates. Rates for meter readings on or after July 1, 2024 were approved by the Commission in May 2024, while rates for meter readings on or after July 1, 2025 were approved by the Commission in April 2025.
Hetchy Power Municipal Rates
Departments of the City and County of San Francisco, as well as certain other non- City government agencies, are eligible for municipal power rates. Historically, municipal customers paid either the General Use rate, which was a subsidized rate below the cost of service, or an Enterprise rate, which was set to exactly follow the equivalent PG&E rate.
Based on the results of the 2022 Power Cost of Service Study, beginning in fiscal year 2023, all municipal customers are being transitioned to standardized tariff schedules set to their cost of service. For General Use customers, this means that a) instead of a single flat rate per kWh, customers are assigned to a rate schedule based on their customer class (small commercial, industrial, etc.), and b) the subsidy is being gradually eliminated until the General Use rate reaches the equivalent retail rate, which is projected to take 3 to 8 years, depending on the customer class. For Enterprise customers, their rates no longer follow PG&E. Instead, they are set to a rate for their standardized customer class, and will be phased to cost of service over two years. Beginning in fiscal year 2024, almost all Enterprise customers are on equivalent rate schedules as retail non-municipal customers.
Hetchy Power Retail Rates
Retail electric rates are the default rates charged to residential, commercial, and industrial customers where Hetch Hetchy has been designated as the power provider. Retail power rates were increased by an average of 12% and 10% for fiscal years 2025 and 2026, respectively.
Effective Date Rate
July 1, 2016 7.0 1
July 1, 2017 11.0 1
July 1, 2018 7.0 2
July 1, 2019 7.0 2
July 1, 2020 8.0 2
July 1, 2021 8.0 2
July 1, 2022 — 3
July 1, 2023 9.0 4
July 1, 2024 9.0 4
July 1, 2025 9.0 4
Ten-year Average Rate Adjustments
66 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Management’s Discussion and Analysis (Unaudited)
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
CleanPowerSF
CleanPowerSF began offering services in May 2016, giving residential and commercial electricity consumers in San Francisco a choice of having their electricity supplied from clean renewable sources, such as solar geothermal, hydroelectric and wind, at competitive rates. CleanPowerSF offers three products: a “Green” default product comprised of at least 50% RPS -eligible renewable energy and two optional products, “SuperGreen” comprised of 100% RPS -eligible renewable energy at a small additional cost and “SuperGreen Saver” also comprised of 100% RPS-eligible renewable energy to qualifying low-income customers at a 20% bill discount.
CleanPowerSF generation rates for each customer class are set based on their unique cost of service. The last Power Cost of Service Study was completed in 2022 with subsequent rate approvals in 2023 and 2024. An average 8.5% rate increase for meter readings on or after July 1, 2024 was approved by the Commission in May 2024. There will be no change to rates for fiscal year 2026.
CleanPowerSF Rates Schedules are available at https://cleanpowersf.org/residential for residential customers and
https://cleanpowersf.org/commercial for commercial customers.
Request for Information
This report is designed to provide our citizens, customers, investors, and creditors with an overview of SFPUC ’s finances and to demonstrate SFPUC’s respective accountability for the money it receives. Questions regarding any of the information provided in this report or requests for additional information should be addressed to San Francisco Public Utilities Commission, Chief Financial Officer, 525 Golden Gate Avenue, 13th Floor, San Francisco, CA 94102.
This report is available at https://www.sfpuc.gov/about-us/reports/audited-financial-statements-reports .
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Statements of Net Position
Proprietary Funds
June 30, 2025 and 2024
(In thousands)
67 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
(continued)
A. Included interfund payables and interfund receivables for fiscal year 2025 of $38,113, of which $37,822 between Water and Hetchy Power for the State Revolving fund loan for the Mountain Tunnel project and $291 between Wastewater and Hetchy Power for the 525 Golden Gate Avenue Headquarters construction costs.
B. Included interfund payables and interfund receivables for fiscal year 2024 of $405 between Wastewater and Hetchy Power for the 525 Golden Gate Avenue Headquarters construction costs. *Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
See accompanying notes to basic financial statements.
Assets 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025 2024 2025
Restated
2024*
Current assets:
Cash and investments with City Treasury............................................................... $ 436,413 380,201 3 96,961 376,658 103,244 46,471 254,557 215,370 222,449 159,811 — — 1,413,624 1,178,511 Cash and investments outside City Treasury..........................................................xx 76 193 45 1 52 — — 5 41 — — — — 126 386 Receivables:
Charges for services (net of allowance for doubtful
accounts of $10,878, $12,045, $0, $3,299, and $11,437 in 2025 and $10,777, $12,865, $0, $1,699, and $9,226 in 2024)...........................................xx 70,751 79,483 50,300 4 8,338 437 471 11,116 16,356 54,679 50,993 — — 187,283 195,641 Wholesale balancing account, current portion........................................................ — 26,121 — — — — — — — — — — — 2 6,121 Note receivable - Balboa Reservoir, current portion…............................................ 3,116 — — — — — — — — — — — 3 ,116 — Due from other City departments, current portion................................................... xx 209 102 70 8 2 — — 661 1,558 — — (217) A (114) B 723 1,628 Due from other governments...................................................................................xx 1,038 366 — — 1 ,665 1,664 575 574 — — — — 3,278 2,604 Interest ....................................................................................................................xx 3,466 3,861 3,619 3 ,896 673 578 2,466 2,823 2,054 1,692 — — 12,278 12,850 Interest-Leases .......................................................................................................xx 945 935 — — — — — — — — — — 9 45 935 Restricted due from other governments.................................................................. xx 23,806 129,580 30,301 — — — — — — — — — 5 4,107 129,580 Leases receivable, current portion….......................................................................xx 2,752 3,246 241 2 26 — — — — — — — — 2,993 3,472 Restricted interest and other receivable (net of allowance for doubtful accounts of $145, $383, $0, $0 and $0 in 2025 and
$131, $345, $0, $0 and $0 in 2024)...................................................................xx 2,654 3,789 6,889 6 89 — — 513 169 — — — — 10,056 4,647 Total current receivables..................................................................................xx 108,737 247,483 91,420 5 3,231 2,775 2,713 15,331 21,480 56,733 52,685 (217) (114) 274,779 377,478 Prepaid charges, advances, and other receivables, current portion....................... xx 7,413 4,958 729 8 ,142 734 754 7,667 6,341 969 441 — — 17,512 20,636 Inventory..................................................................................................................xx 7,567 7,825 4,052 3 ,657 276 199 1,828 1,690 — — — — 13,723 13,371 Restricted cash and investments outside City Treasury, current portion................ xx 28,467 40,065 83,614 4 1,778 — — 4,138 6,849 — — — — 116,219 88,692 Total current assets......................................................................................... xx 588,673 680,725 576,821 4 83,618 107,029 50,137 283,526 251,771 280,151 212,937 (217) (114) 1,835,983 1,679,074 Non-current assets: xx
Restricted cash and investments with City Treasury...............................................xx 137,436 71,015 398,588 3 1,613 20,815 31,330 78,197 50,732 — — — — 635,036 184,690 Restricted cash and investments outside City Treasury, less current portion.........xx 57,431 63,185 35,514 5 9,930 — — 3,832 7,202 — — — — 96,777 130,317 Leases receivable, less current portion…............................................................... xx 33,141 35,817 777 1 ,019 — — — — — — — — 33,918 36,836 Restricted interest and other receivable, and prepaid (net of allowance xx for doubtful accounts of $0, $0, $0, $0, and $0. in 2025 and xx $0, $0, $0, $0, and $0 in 2024)…………….......................................................... xx — — 371 3 88 — — — — — — — — 371 388 Charges for services, less current portion (net of allowance for doubtful xx accounts of $414, $333, $0, $0, and $0 in 2025 and xx
$664, $351, $0, $0, and $0 in 2024)………….......................................................xx 199 200 343 3 42 — — — — — — — — 542 542 Note receivable - Balboa Reservoir, less current portion….................................... xx 8,737 11,512 — — — — — — — — — — 8 ,737 11,512 Prepaid charges, advances, and other receivables, less current portion................xx 3,356 3,236 1,160 1 ,087 134 138 11,179 10,843 12,191 11,763 — — 28,020 27,067 Capital assets, not being depreciated and amortized..............................................xx 967,268 720,805 2,903,540 2 ,926,407 101,996 89,122 357,990 347,633 — — — — 4,330,794 4,083,967 Capital assets, net of accumulated depreciation and amortization..........................xx 5,024,031 5,057,662 3,381,313 2 ,562,003 148,334 148,364 451,931 410,119 86 13 — — 9,005,695 8,178,161 Due from other City departments, less current portion............................................xx 37,720 — — — — — 9 ,505 9,863 — — (37,896) A (291) B 9,329 9,572 Total non-current assets.................................................................................. xx 6,269,319 5,963,432 6,721,606 5 ,582,789 271,279 268,954 912,634 836,392 12,277 11,776 (37,896) (291) 14,149,219 12,663,052 Total assets......................................................................................................xx 6,857,992 6,644,157 7,298,427 6 ,066,407 378,308 319,091 1,196,160 1,088,163 292,428 224,713 (38,113) (405) 15,985,202 14,342,126 Deferred outflows of resources xx
Unamortized loss on refunding of debt....................................................................xx 82,711 89,186 — — — — — — — — — — 8 2,711 89,186 Pensions..................................................................................................................xx 98,819 93,526 44,997 4 2,685 12,435 11,929 15,198 14,580 2,753 2,187 — — 174,202 164,907 Other postemployment benefits...............................................................................xx 27,309 29,974 11,099 1 2,816 2,954 3,191 3,611 3,899 1,195 996 — — 46,168 50,876 Total deferred outflows of resources................................................................$ 208,839 212,686 5 6,096 55,501 15,389 15,120 18,809 18,479 3,948 3,183 — — 303,081 304,969
Business Type Activities – Proprietary Funds
Water SFPUC TotalWastewater Hetchy Water Hetchy Power EliminationsCleanPowerSF
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Statements of Net Position
Proprietary Funds
June 30, 2025 and 2024
(In thousands)
68 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
C. Included interfund payables and interfund receivables for fiscal year 2025 of $38,113, of which $37,822 between Water and Hetchy Power for the State Revolving fund loan for the Mountain Tunnel project and $291 between Wastewater and Hetchy Power for the 525 Golden Gate Avenue Headquarters construction costs.
D. Included interfund payables and interfund receivables for fiscal year 2024 of $405 between Wastewater and Hetchy Power for the 525 Golden Gate Avenue Headquarters construction costs. *Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
See accompanying notes to basic financial statements.
2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025 2024 2 025
Restated
2024*
Liabilities
Curre
nt liabilities:
Accounts payable....................................................................................... $ 21,230 2 5,353 21,325 18,841 1,609 969 16,536 13,505 32,127 29,018 — — 92,827 87,686 Accrued payroll...........................................................................................xx 15,784 13,444 9 ,782 8,119 1,918 1,428 3,787 3,292 917 639 — — 32,188 26,922 Accrued compensated absences, current portion...................................... xx 17,393 16,300 1 4,531 13,705 3,256 2,995 4,462 4,144 666 574 — — 40,308 37,718 Accrued workers’ compensation, current portion........................................xx 2,365 2,188 1 ,602 1,685 238 228 429 417 — — — — 4,634 4,518 Due to other City departments, current portion.......................................... xx — — 1 15 114 — — 102 — — — (217) C (114) D — — Damage claims liability, current portion......................................................xx 4,525 5,716 1 5,885 28,742 297 121 570 1,872 — 17 — — 21,277 36,468 Unearned revenues, refunds, and other, current portion........................... xx 16,666 15,050 8 ,346 9,623 24 106 7,391 6,604 4,425 7,986 — — 36,852 39,369 Arbitrage rebate payable, current portion...................................................xx 536 — 2 90 — — — — — — — — — 826 — Bond, loan, lease and subscription interest payable, current portion.........xx 37,030 37,924 4 2,174 30,300 7 1 2,845 2,691 2 — — — 82,058 70,916 Bonds, current portion................................................................................ xx 139,250 138,140 3 8,460 35,370 — — 3,748 3,599 — — — — 181,458 177,109 Certificates of participation, current portion................................................xx 3,545 3,402 9 37 900 — — 483 463 — — — — 4,965 4,765 Commercial paper, current portion.............................................................xx 20,000 190,000 — — — — 1 69,333 90,654 — — — — 189,333 280,654 State revolving funds loans payable, current portion……………...……..... xx — — 6 ,419 5,629 — — — — — — — — 6,419 5,629 Lease liability, current portion…................................................................. xx 966 1,028 1 ,766 — 86 16 105 19 — — — — 2,923 1,063 Subscription liability, current portion…....................................................... xx 846 153 5 03 93 175 30 141 25 70 6 — — 1,735 307 Current liabilities payable from restricted assets........................................xx 73,295 39,896 9 9,247 135,740 1,118 4,027 18,155 25,513 — — — — 191,815 205,176 Total current liabilities.............................................................................. xx 353,431 488,594 2 61,382 288,861 8,728 9,921 228,087 152,798 38,207 38,240 (217) (114) 889,618 978,300 Long-term liabilities: xx
Arbitrage rebate payable, less current portion............................................xx 1,285 869 4 ,254 8,521 — — 207 184 — — — — 5,746 9,574 Net other postemployment benefits liability................................................xx 161,975 158,301 5 0,552 49,260 16,590 16,269 20,277 19,883 3,753 4,189 — — 253,147 247,902 Net pension liability.................................................................................... xx 166,978 152,643 7 4,339 67,299 20,410 19,090 24,945 23,332 4,625 3,563 — — 291,297 265,927 Accrued compensated absences, less current portion...............................xx 14,670 14,245 1 2,726 12,187 2,940 2,799 4,057 3,884 618 534 — — 35,011 33,649 Accrued workers’ compensation, less current portion................................xx 9,936 8,814 7 ,299 7,327 992 1,069 1,824 1,919 — — — — 20,051 19,129 Due to other City departments, less current portion...................................xx — — 1 76 291 — — 37,720 — — — (37,896) C (291) D — — Damage claims liability, less current portion...............................................xx 10,424 17,057 6 3,216 86,341 — 147 78 1,902 — 4 — — 73,718 105,451 Unearned revenues, refunds, and other, less current portion.................... xx — — — — 6 — 886 580 72 — — — 964 580 Liabilities payable from restricted assets, less current portion................... xx — — — — — — 3 ,104 3,354 — — — — 3,104 3,354 Bonds, less current portion.........................................................................xx 5,049,478 4,826,497 3 ,710,386 2,649,681 — — 309,631 315,200 — — — — 9,069,495 7,791,378 Certificates of participation, less current portion........................................ xx 82,285 85,830 2 1,758 22,695 — — 11,202 11,685 — — — — 115,245 120,210 Commercial paper, less current portion......................................................xx — — — 3 41,373 — — — — — — — — — 341,373 State revolving funds loans payable, less current portion……………........ xx 300,035 259,970 3 60,187 312,033 — — — — — — — — 660,222 572,003 Water Infrastructure Finance and Innovation Act (WIFIA) loans……..........xx — — 1 ,394,652 922,431 — — — — — — — — 1,394,652 922,431 Bond, loan, lease, and subscription interest xx
payable, less current portion…................................................................ xx 5,465 3,622 3 ,898 2,106 — — — — — — — — 9,363 5,728 Lease liability, less current portion…..........................................................xx 1,811 1,793 3 ,722 — 341 106 417 131 — — — — 6,291 2,030 Subscription liability, less current portion…................................................xx 159 155 9 4 93 33 29 26 26 15 7 — — 327 310 Wholesale balancing account,....................................................................xx 12,983 — — — — — — — — — — — 1 2,983 — Pollution remediation obligations................................................................xx — 1,271 6 ,123 6,451 — — — — — — — — 6,123 7,722 Total long-term liabilities.......................................................................... xx 5,817,484 5,531,067 5 ,713,382 4,488,089 41,312 39,509 414,374 382,080 9,083 8,297 (37,896) (291) 11,957,739 10,448,751 Total liabilities.......................................................................................... xx 6,170,915 6,019,661 5 ,974,764 4,776,950 50,040 49,430 642,461 534,878 47,290 46,537 (38,113) (405) 12,847,357 11,427,051 Deferred inflows of resources xx
Unamortized gain on refunding of debt…...................................................xx 49,499 31,854 1 5,217 10,255 — — — — — — — — 64,716 42,109 Pensions.....................................................................................................xx 7,050 13,305 2 ,172 4,055 868 1,941 1,061 2,372 730 925 — — 11,881 22,598 Leases….................................................................................................... xx 33,235 36,583 9 54 1,203 — — — — — — — — 34,189 37,786 Other postemployment benefits..................................................................xx 23,394 22,334 6 ,477 5,809 2,832 2,897 3,461 3,541 1,737 2,292 — — 37,901 36,873 Total deferred inflows of resources..........................................................xx 113,178 104,076 2 4,820 21,322 3,700 4,838 4,522 5,913 2,467 3,217 — — 148,687 139,366 Net position xx
Net investment in capital assets................................................................... xx 450,019 350,430 1 ,039,359 1,148,814 248,610 233,276 341,791 343,297 — — — — 2,079,779 2,075,817 Restricted for debt service............................................................................ xx 5,353 44,724 2 ,112 — — — — — — — — — 7,465 44,724 Restricted for capital projects....................................................................... xx 145,442 200,632 1 40,768 31,782 20,815 31,330 32,645 28,625 — — — — 339,670 292,369 Restricted for other purposes....................................................................... xx — — — — — — 5 ,772 — — — — — 5,772 — Unrestricted.................................................................................................. xx 181,924 137,320 1 72,700 143,040 70,532 15,337 187,778 193,929 246,619 178,142 — — 859,553 667,768 Total net position..................................................................................... $ 782,738 7 33,106 1,354,939 1,323,636 339,957 279,943 567,986 565,851 246,619 178,142 — — 3,292,239 3,080,678 Business Type Activities – Proprietary Funds
SFPUC TotalWater Wastewater Hetchy Water Hetchy Power EliminationsCleanPowerSF
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
69 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
Statements of Revenues, Expenses, and Changes in Net Position Proprietary Funds
Years ended June 30, 2025 and 2024
(In thousands)
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences. **Interest expenses, net of amortization of premium, discount, refunding gain/loss and issuance costs.
See accompanying notes to basic financial statements.
2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024*
Operating revenues:
Charges for services....................................................................................... $ 665,552 6 62 ,729 427,493 392,040 53,071 49,330 218,274 214,154 429,796 366,594 1,794,186 1,684,847 Rents and concessions...................................................................................xx 7,354 8,556 875 739 140 162 189 198 — — 8,558 9,655 Capacity fees.................................................................................................. xx 1,055 863 2, 823 2,262 — — — — — — 3,878 3,125 Other revenues............................................................................................... xx 4,676 4,742 — — — — — — — — 4, 676 4,742 Total operating revenues........................................................................... xx 678,637 676,890 431 ,191 395,041 53,211 49,492 218,463 214,352 429,796 366,594 1,811,298 1,702,369 Operating expenses: xx
Personnel services..........................................................................................xx 175,770 161,077 128 ,217 106,883 21,319 25,367 56,678 48,737 12,251 9,357 394,235 351,421 Contractual services....................................................................................... xx 17,587 20,128 24, 527 23,885 3,919 4,035 13,263 13,623 6,779 6,244 66,075 67,915 Transmission/distribution and other power costs............................................xx — — — — — — 52, 907 62,392 264 264 53,171 62,656 Purchased electricity.......................................................................................xx — — — — — — 25, 106 15,558 342,669 284,631 367,775 300,189 Materials and supplies.................................................................................... xx 23,170 23,195 15, 673 14,474 1,765 1,755 2,781 2,451 102 60 43,491 41,935 Depreciation and amortization.........................................................................xx 159,900 155,172 86, 476 82,722 7,263 6,522 21,008 18,460 126 17 274,773 262,893 Services provided by other departments.........................................................xx 85,609 77,638 44, 213 39,546 2,622 3,501 8,082 6,828 3,316 4,792 143,842 132,305 General and administrative and other.............................................................xx 33,427 93,444 (6 ,625) 195,581 8,583 3,229 38,256 33,114 6,671 6,188 80,312 331,556 Total operating expenses...........................................................................xx 495,463 530,654 292 ,481 463,091 45,471 44,409 218,081 201,163 372,178 311,553 1,423,674 1,550,870 Operating income (loss)............................................................................. xx 183,174 146,236 138 ,710 (68,050) 7,740 5,083 382 13,189 57,618 55,041 387,624 151,499 Non-operating revenues (expenses): xx
Federal and state grants................................................................................. xx 2,233 12,414 562 12,256 152 — 187 26 33 — 3,167 24,696 Interest and investment income ......................................................................xx 29,093 25,097 44, 065 25,528 5,016 3,255 14,688 13,744 10,482 5,904 103,344 73,528 Interest expenses**.........................................................................................xx (201,152) (208,230) (1 54,566) (91,584) (23) (3) (16,006) (13,464) (5) — (371,752) (313,281) Net gain/(loss) from sale of assets..................................................................xx 1,701 2,060 18 77 18 2 (2,851) 2 — — (1,114) 2,141 Other non-operating revenues........................................................................ xx 24,945 27,597 4, 066 11,964 35 336 5,769 8,500 688 386 35,503 48,783 Other non-operating expenses........................................................................xx (1,898) (1,760) (2 25) (505) (8) (45) (534) (99) (339) (877) (3,004) (3,286) Net non-operating revenues (expenses)....................................................xx (145,078) (142,822) (1 06,080) (42,264) 5,190 3,545 1,253 8,709 10,859 5,413 (233,856) (167,419) Change in net position before capital contributions and transfers............. xx 38,096 3,414 32, 630 (110,314) 12,930 8,628 1,635 21,898 68,477 60,454 153,768 (15,920) Capital contributions.......................................................................................... xx 17,436 53,599 145 48,080 — — 4,032 29,200 — — 21,613 130,879 Transfers from the City and County of San Francisco....................................... xx 41,215 505 — — 47, 084 42 — — — — 88,299 547 Transfers to the City and County of San Francisco........................................... xx (47,115) (1,241) (1 ,472) (209) — — (3,532) (108) — — (52,119) (1,558) Net capital contributions and transfers…................................................... xx 11,536 52,863 (1 ,327) 47,871 47,084 42 500 29,092 — — 57,793 129,868 Change in net position............................................................................... xx 49,632 56,277 31, 303 (62,443) 60,014 8,670 2,135 50,990 68,477 60,454 211,561 113,948 Net position at beginning of year....................................................................... xx Beginning of year, as previously reported……………………………………xx 733,106 692,073 1, 323,636 1,398,834 279,943 274,128 565,851 518,350 178,142 118,001 3,080,678 3,001,386 Cumulative effect of accounting change………………………………………xx — (15,244) — (1 2,755) — (2,855) — (3,489) — (313) — (34,656) Net position at beginning of year as restated..................................................... xx 733,106 676,829 1, 323,636 1,386,079 279,943 271,273 565,851 514,861 178,142 117,688 3,080,678 2,966,730 Net position at end of year................................................................................. $ 782,738 733 ,106 1,354,939 1,323,636 339,957 279,943 567,986 565,851 246,619 178,142 3,292,239 3,080,678 Business Type Activities – Proprietary Funds
Water Wastewater Hetchy Water Hetchy Power SFPUC TotalCleanPowerSF
70 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Statements of Cash Flows
Proprietary Funds
Years ended June 30, 2025 and 2024
(In thousands)
(continued)
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences.
See accompanying notes to basic financial statements.
2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024*
Cash flows from operating activities:
Cash received from customers, including cash deposits......................................... $ 721,479 636,706 428,084 380,336 53,109 49,264 225,191 211,012 422,349 357,825 1,850,212 1,635,143 Cash received from tenants for rent.........................................................................xx 3,240 5,429 829 496 141 153 169 188 — — 4,379 6,266 Cash received from miscellaneous revenues...........................................................xx 3,694 4,776 7,904 6,648 35 36 2,042 4,886 147 3 13,822 16,349 Cash received from settlements…...........................................................................xx 1,078 — — — — 300 — — — — 1,078 300 Cash received from license fees….......................................................................... xx — — — — — — 3,218 1,997 — — 3,218 1,997 Cash paid to employees for services....................................................................... xx (156,968) (151,655) (116,892) (104,126) (20,057) (23,234) (54,872) (45,847) (12,686) (9,517) (361,475) (334,379) Cash paid to suppliers for goods and services........................................................ xx (164,876) (194,188) (105,702) (116,262) (15,795) (13,563) (138,644) (146,934) (356,474) (291,457) (781,491) (762,404) Cash paid for judgments and claims........................................................................xx (9,167) (18,216) (7,046) (6,851) (329) (357) (2,222) (3,625) (274) (874) (19,038) (29,923) Cash paid for rebates and program incentives….....................................................xx (1,898) (1,760) (225) (505) (19) (34) (555) (78) (364) (864) (3,061) (3,241) Net cash provided by operating activities......................................................... xx 396,582 281,092 206,952 159,736 17,085 12,565 34,327 21,599 52,698 55,116 707,644 530,108 Cash flows from non-capital financing activities: xx
Cash received from grants.......................................................................................xx 1,595 13,400 591 13,688 100 59 114 98 33 — 2,433 27,245 Cash refunded from grants...................................................................................... xx (1,386) — (1,459) — — — — — — — (2,845) — Cash received from Public Purpose Funds..............................................................xx — — — — — — — — 345 1,624 345 1,624 Interfund loan receivables........................................................................................xx (37,822) — — — — — — — — — (37,822) — Transfers from the City and County of San Francisco............................................. xx 41,215 505 — — — 42 — — — — 41,215 547 Transfers to the City and County of San Francisco................................................. xx (47,115) (1,241) (1,472) (209) — — (3,532) (108) — — (52,119) (1,558) Net cash provided by (used in) non-capital financing activities........................ xx (43,513) 12,664 (2,340) 13,479 100 101 (3,418) (10) 378 1,624 (48,793) 27,858 Cash flows from capital and related financing activities: xx Proceeds from sale of capital assets....................................................................... xx 1,701 1,569 14 79 18 2 22 2 — — 1,755 1,652 Proceeds from bond issuance, net of premium and discount…............................... xx 95,520 474,538 786,743 — — — — 131,230 — — 882,263 605,768 Proceeds from commercial paper borrowings..........................................................xx 142,400 191,150 648 341,373 — — 78,679 91,635 — — 221,727 624,158 Proceeds from State Revolving Fund loans.............................................................xx 145,839 4,044 24,273 13,942 — — — — — — 170,112 17,986 Proceeds of State Revolving Fund loans from Water Enterprise.............................xx — — — — — — 37,720 — — — 37,720 — Proceeds from WIFIA loans…..................................................................................xx — — 455,896 811,356 — — — — — — 455,896 811,356 Principal paid on commercial paper.........................................................................xx — (372,609) — — — — — (117,333) — — — (489,942) Principal paid on revenue notes...............................................................................xx — — — (347,465) — — — — — — — (347,465) Principal paid on long-term debt.............................................................................. xx (141,542) (138,342) (36,270) (28,933) — — (4,062) (2,035) — — (181,874) (169,310) Principal paid on State Revolving Fund loans......................................................... xx — — (5,629) (2,525) — — — — — — (5,629) (2,525) Interest paid on commercial paper...........................................................................xx (8,374) (1,511) (647) (1,372) — — (3,678) (1,969) — — (12,699) (4,852) Interest paid on long-term debt................................................................................ xx (207,283) (214,279) (146,305) (112,460) — — (13,850) (11,221) — — (367,438) (337,960) Interest paid on State Revolving Fund loans........................................................... xx — — (2,727) (1,479) — — — — — — (2,727) (1,479) Interest paid on leases.............................................................................................xx (90) (81) (198) (6) (9) (2) (13) (3) — — (310) (92) Interest paid on subscriptions …..............................................................................xx (37) (6) (22) (4) (8) (2) (6) (1) (3) — (76) (13) Issuance costs paid on long-term debt.....................................................................xx (5,035) (4,545) (3,291) (195) — — — (765) — — (8,326) (5,505) Cash received from leases.......................................................................................xx 4,624 3,745 260 250 — — — — — — 4,884 3,995 Transfers from the City and County of San Francisco............................................. xx — — — — 47,084 — — — — — 47,084 — Acquisition and construction of capital assets..........................................................xx (325,639) (229,702) (914,791) (873,239) (22,933) (25,788) (79,632) (94,214) (127) (18) (1,343,122) (1,222,961) Federal interest income subsidy.............................................................................. xx 22,246 22,909 2,144 3,911 — — 420 332 — — 24,810 27,152 Net cash provided by (used in) capital and related financing activities.............xx (275,670) (263,120) 160,098 (196,767) 24,152 (25,790) 15,600 (4,342) (130) (18) (75,950) (490,037) Cash flows from investing activities: xx
Interest income received..........................................................................................xx 21,739 16,310 33,389 17,963 3,104 1,083 10,862 8,568 7,387 3,838 76,481 47,762 Proceeds from sale of investment outside City Treasury.........................................xx 1,626,714 1,015,279 1,476,445 1,860,653 — — 29,850 155,462 — — 3,133,009 3,031,394 Purchase of investments outside City Treasury.......................................................xx (1,560,899) (1,081,634) (1,463,839) (1,898,189) — — (23,093) (165,218) — — (3,047,831) (3,145,041) Net cash provided by (used in) investing activities .......................................... xx 87,554 (50,045) 45,995 (19,573) 3,104 1,083 17,619 (1,188) 7,387 3,838 161,659 (65,885) Increase (decrease) in cash and cash equivalents...........................................xx 164,953 (19,409) 410,705 (43,125) 44,441 (12,041) 64,128 16,059 60,333 60,560 744,560 2,044 Cash and cash equivalents: xx
Beginning of year..................................................................................................... xx 495,492 514,901 479,099 522,224 79,816 91,857 273,869 257,810 162,357 101,797 1,490,633 1,488,589 End of year...............................................................................................................$ 660,445 495,492 889,804 479,099 124,257 79,816 337,997 273,869 222,690 162,357 2,235,193 1,490,633 Reconciliation of cash and cash equivalents to the statements of net position:
Cash and investments with City Treasury:
Unrestricted......................................................................................................... $ 436,413 380,201 396,961 376,658 103,244 46,471 254,557 215,370 222,449 159,811 1,413,624 1,178,511 Restricted............................................................................................................. 137,436 71,015 398,588 31,613 20,815 31,330 78,197 50,732 — — 635,036 184,690 Add: Unrealized loss on investments with City Treasury...................................xx 622 7,188 862 6,504 198 2,015 297 3,465 241 2,546 2,220 21,718 Cash and investments outside City Treasury: xx
Unrestricted......................................................................................................... xx 76 193 45 152 — — 5 41 — — 126 386 Restricted.............................................................................................................xx 85,898 103,250 119,128 101,708 — — 7,970 14,051 — — 212,996 219,009 Less: Restricted (with maturity more than 90 days – see table in Note 3).........xx — (65,815) (24,663) (37,269) — — (2,999) (9,756) — — (27,662) (112,840) Less: Unrealized (gain) on investments outside City Treasury..........................xx — (540) (1,117) (267) — — (30) (34) — — (1,147) (841) Cash and cash equivalents at end of year on statements of cash flows....... $ 660,445 495,492 889,804 479,099 124,257 79,816 337,997 273,869 222,690 162,357 2,235,193 1,490,633
Business Type Activities – Proprietary Funds
Water Wastewater Hetchy Water Hetchy Power SFPUC TotalCleanPowerSF 71 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Statements of Cash Flows
Proprietary Funds
Years ended June 30, 2025 and 2024
(In thousands)
*Fiscal year 2024, restated due to implementation of GASB Statement No. 101, Compensated Absences. **Includes related deferred outflows/inflows.
See accompanying notes to basic financial statements.
2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024* 2025
Restated
2024*
Reconciliation of operating income (loss) to net cash provided by operating activities:
Operating income (loss)...............................................................................$ 183,174 146,236 138,710 (68,050) 7,740 5,083 382 13,189 57,618 55,041 387,624 1 51,499 Adjustments to reconcile operating income (loss) to net cash provided by operating activities:
Depreciation and amortization.................................................................xx 159,900 155,172 86,476 82,722 7,263 6,522 21,008 18,460 126 17 274,773 262,893 Lease revenue amortization....................................................................xx (3,987) (3,322) (249) (250) — — — — — — (4,236) (3,572) Miscellaneous revenues..........................................................................xx 3,694 4,776 7,904 6,647 35 36 2,042 4,886 147 3 13,822 16,348 Provision for uncollectible accounts........................................................ xx (135) 2,263 (800) 2,807 — — 1,600 (2,224) 2,211 1,303 2,876 4,149 Write-off of capital assets and other non-cash items.............................. xx 4,394 58 1,309 47,795 332 — 491 217 — — 6,526 48,070 Settlements............................................................................................. xx 1,078 — — — — 300 — — — — 1,078 300 Rebates and program incentives.............................................................xx (1,898) (1,760) (225) (505) (19) (34) (555) (78) (364) (864) (3,061) (3,241) License fees............................................................................................ xx — — — — — — 3,218 1,997 — — 3,218 1,997 C
hanges in operating assets and liabilities: xx
Receivables: xx
Charges for services.......................................................................... xx 8,881 (17,701) (1,125) (10,835) 34 (66) 3,640 (1,855) (5,897) (10,671) 5,533 (41,128) Due from other City departments........................................................xx (5) 13 — — — — 1,405 187 — — 1,400 200 Prepaid charges, advances, and other............................................... xx (2,970) 560 (418) (7,452) 30 (659) (135) (372) (504) 5,200 (3,997) (2,723) Inventory............................................................................................... xx 258 366 (395) (317) (77) 22 (138) (71) — — (352) — Accounts payable..................................................................................xx (4,123) 2,682 2,484 (4,366) 651 (75) 3,050 (11,486) 3,134 4,661 5,196 (8,584) Accrued payroll..................................................................................... xx 2,340 1,637 1,663 488 490 176 495 251 278 96 5,266 2,648 Net other postemployment benefits obligations**................................. xx 7,399 3,601 3,677 (3,575) 493 1,232 602 1,505 (1,190) (481) 10,981 2,282 Net pension**........................................................................................xx 2,787 (1,324) 2,845 1,689 (259) (287) (316) (351) 301 173 5,358 (100) Accrued compensated absences..........................................................xx 1,518 1,716 1,365 1,475 402 673 491 823 176 52 3,952 4,739 Accrued workers' compensation...........................................................xx 1,299 1,267 (111) 1,014 (67) 78 (83) 98 — — 1,038 2,457 Due to other City departments..............................................................xx — (2,440) — (2,101) — — — (1,946) — — — (6,487) Wholesale balancing account............................................................... xx 39,104 (16,069) — — — — — — — — 39,104 (16,069) Damage claims liability..........................................................................xx (7,824) 3,148 (35,982) 110,733 29 (432) (3,126) (2,376) (21) (13) (46,924) 111,060 Unearned revenues, refunds, and other liabilities................................ xx 2,969 213 152 3,166 8 (4) 256 745 (3,317) 599 68 4,719 Pollution remediation obligations.......................................................... xx (1,271) — (328) (1,349) — — — — — — (1,599) (1,349) Total adjustments............................................................................ xx 213,408 134,856 68,242 227,786 9,345 7,482 33,945 8,410 (4,920) 75 320,020 378,609 Net cash provided by operating activities........................................$ 396,582 281,092 206,952 159,736 17,085 12,565 34,327 21,599 52,698 55,116 707,644 5 30,108 Noncash transactions:
Accrued capital asset costs............................................................................$ 73,295 39,896 99,247 135,740 1,118 4,027 21,259 28,867 — — 194,919 2 08,530 Leases and subscription assets..................................................................... xx — — 11,630 — — — — — — — 11,630 — Interfund payables..........................................................................................xx — — 291 405 — — 37,720 — — — 38,011 405 Interfund receivables...................................................................................... xx 37,720 — — — — — 291 405 — — 38,011 405 Unrealized loss on investments with City Treasury........................................xx 622 7,188 862 6,504 198 2,015 297 3,431 241 2,546 2,220 21,684 Unrealized (gain) on investments outside City Treasury................................xx — (540) (1,117) (267) — — (30) — — — (1,147) (807) Capital contributions.......................................................................................xx 17,436 53,599 145 48,080 — — 4,032 29,200 — — 21,613 130,879 Sale of land with promissory note...................................................................xx 11,853 11,512 — — — — — — — — 11,853 11,512 Bond Principal refunded................................................................................. xx1,206,240 619,115 — — — — — — — — 1,206,240 619,115 Commercial paper refunded...........................................................................xx 313,384 373,103 344,246 — — — — — — — 657,630 373,103 Bond and commercial paper proceeds paid to refunding escrow...................xx1,546,013 963,977 86,982 — — — — — — — 1,632,995 963,977
Water Wastewater Hetchy Water Hetchy Power SFPUC TotalCleanPowerSF Business Type Activities – Proprietary Funds
72 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
(1) Description of Reporting Entity
The San Francisco Public Utilities Commission (SFPUC or the Commission), established in 1932, is responsible for providing operational oversight of the public utility enterprises of the City, which include the Water, Wastewater, Hetch Hetchy (Hetchy Water and Hetchy Power) and CleanPowerSF. The Commission is responsible for determining such matters as the rates and charges for services, approval of contracts, and organizational policy.
Until August 1, 2008, the Commission consisted of five members, all appointed by the Mayor. Proposition E, a City and County of San Francisco Charter Section 4.112 amendment approved by the voters in the June 3, 2008 election, terminated the terms of all five existing members of the Commission, changed the process for appointing new members, and set qualifications for all members. Under the amended Charter, the Mayor continues to nominate candidates to the Commission, but nominees do not take office until the Board of Supervisors votes to approve their appointments by a majority (at least six members). The amended Charter provides for staggered four-year terms for the Commission members and requires them to meet the following qualifications:
● Seat 1 must have experience in environmental policy and an understanding of environmental justice issues.
● Seat 2 must have experience in ratepayer or consumer advocacy. ● Seat 3 must have experience in project finance.
● Seat 4 must have experience in water systems, power systems, or public utility management. ● Seat 5 is an at-large member.
The SFPUC is a department of the City, and as such, the financial operations of the Water, the Wastewater, Hetch Hetchy ( Hetchy Water and Hetchy Power ) and CleanPowerSF enterprises are included in the Annual Comprehensive Financial Report of the City as enterprise funds. These financial statements are intended to present only the financial position, and the changes in financial position and cash flows of only the portion of the City that is attributable to the transactions of the enterprises. They do not purport to, and do not, present fairly the financial position of the City as of June 30, 202 5 and 2024, the changes in its financial position, or, where applicable, the cash flows for the years then ended in conformity with U.S. generally accepted accounting principles (GAAP).
Water Enterprise
The San Francisco Water Enterprise was established in 1930 under the provisions of the Charter of the City and County of San Francisco (the City). The Water Enterprise acquired the fully developed, mature water works for San Francisco on March 3, 1930. Since then, the City has operated and maintained the water works as the San Francisco Water Enterprise. The Board of Supervisors of the City has adopted resolutions (the Water Resolutions) providing for the issuance of various water revenue and refunding bond series. The Water Resolutions require the City to keep separate books of records and accounts of the Water Enterprise. The Water Enterprise, which consists of a system of reservoirs, storage tanks, water treatment plants, pump stations, and pipelines, is engaged in the distribution of water to San Francisco and certain suburban areas. In fiscal year 2025 , the Water Enterprise sold approximately 66,444 million gallons, i.e., about 182 million gallons per day of water, to approximately 2.7 million people within San Francisco and certain suburban areas.
Wastewater Enterprise
The San Francisco Wastewater Enterprise, formerly known as the San Francisco Clean Water Program (the Program), was established in 1977 following the transfer of all sewage system related assets and liabilities of the City to the Program.
In 1976, the electorate of the City approved a proposition authorizing the City to issue $240,000 in revenue bonds pursuant to the Revenue Bond Law of 1941 of the State of California for the purpose of acquiring, constructing, improving, and financing improvements to the City’s municipal sewage treatment and disposal system. Since then, the City’s Board of Supervisors has adopted resolutions (Wastewater Resolutions) providing for the issuance of various sewer revenue and refunding bond series. The 73 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Resolutions require the City to keep separate books of records and accounts of the Wastewater Enterprise.
Hetch Hetchy
San Francisco Hetch Hetchy Water and Power (Hetch Hetchy) was established as a result of the Raker Act of 1913, which granted water and power resources rights -of-way on the Tuolumne River in Yosemite National Park and Stanislaus National Forest to the City and County of San Francisco (the City).
CleanPowerSF, launched in May 2016, provides green electricity from renewable sources to residential and commercial customers in San Francisco and was reported as part of Hetch Hetchy starting fiscal year 2016. Hetch Hetchy is a stand -alone enterprise comprised of three funds, Hetchy Power (the Power Enterprise), CleanPowerSF and Hetchy Water, the portion of the Water Enterprise’s operations, specifically the upcountry water supply and transmission service. Hetch Hetchy accounts for the activities of Hetch Hetchy Water and Power and is engaged in the collection and conveyance of approximately 85% of the regional system’s water supply and in the generation and transmission of electricity from that resource, as well as the City Power services including energy efficiency and renewable.
Approximately 70% of the electricity generated by Hetchy Power is used to provide electric service to the City’s municipal customers (including the San Francisco Municipal Transportation Agency, Recreation and Parks Department, the Port of San Francisco, the San Francisco International Airport and its tenants, Zuckerberg San Francisco General Hospital and Trauma Center, streetlights, Moscone Convention Center, and the Water and Wastewater Enterprises). The majority of the remaining 30% balance of electricity is sold to CleanPowerSF and the wholesale electric market. As a result of the 1913 Raker Act, energy produced above the City’s municipal load is sold first to the Districts (Modesto Irrigation District and Turlock Irrigation District) to cover their agricultural pumping and municipal load needs and any remaining energy is either sold to other municipalities and/or government agencies (not for resale) or sold into the California Independent System Operator (CAISO). Hetch Hetchy operation is an integrated system of reservoirs, hydroelectric power plants, aqueducts, pipelines, and transmission lines.
Hetch Hetchy also purchases wholesale electric power from various energy providers that are used in conjunction with owned hydro resources to meet the power requirements of its customers. Operations and business decisions can be greatly influenced by market conditions, state and federal power matters before the California Public Utilities Commission (CPUC), the CAISO, and the Federal Energy Regulatory Commission (FERC). Therefore, Hetch Hetchy serves as the City’s representative at CPUC, CAISO, and FERC forums and continues to monitor regulatory proceedings.
(2) Significant Accounting Policies
(a) Basis of Accounting and Measurement Focus – Fund Financial Statements
The accounts of Water, Wastewater, Hetchy Water, Hetchy Power and CleanPowerSF are organized on the basis of a proprietary fund type and are included as enterprise funds of the City.
The activities are accounted for with a separate set of self -balancing accounts that comprise the funds’ assets, deferred outflows, liabilities, deferred inflows, net position, revenues, and expenses. Enterprise funds account for activities (i) that are financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity; or (ii) that are required by laws or regulations that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues; or (iii) that the pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service).
The financial activities of Water, Wastewater, Hetchy Water, Hetchy Power and CleanPowerSF are accounted for on a flow of economic resources measurement focus, using the accrual basis of accounting in accordance with U.S. GAAP. Under this method, all assets and liabilities associated with its operations are included on the statements of net position; revenues are recognized when earned, and expenses are recognized when liabilities are incurred. Water and Wastewater Enterprises’ operating revenues are defined as charges to customers, rental income, 74 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
and capacity fees while Hetchy Water, Hetchy Power and CleanPowerSF’s operating revenues are defined as charges to customers and rental incomes. Non-operating revenues include grants, investment income, and other income from non-operating activities. When both restricted and unrestricted resources are available for use, it is the SFPUC’s policy to use restricted resources first, then unrestricted resources as they are needed.
The SFPUC applies all applicable Governmental Accounting Standards Board (GASB) pronouncements.
(b) Cash and Cash Equivalents
The SFPUC considers its pooled deposits and investments held with the City Treasury to be demand deposits and, therefore, cash and cash equivalents for financial reporting. The City Treasury also holds non- pooled cash and investments for the SFPUC. Non -pooled restricted deposits and restricted deposits and investments held outside the City Treasury with original maturities of three months or less are also considered to be cash equivalents.
(c) Investments
Money market funds are carried at cost, which approximates fair value. All other investments are stated at fair value based on quoted market prices. Changes in fair value are recognized as investment gains or losses and are recorded as a component of non-operating revenues.
(d) Inventory
Inventory consists primarily of construction materials and maintenance supplies and is valued at average cost. Inventory is expensed as it is consumed.
(e) Capital Assets
Capital assets are defined as assets with an initial individual cost of more than $10 and an estimated useful life in excess of one year. Capital assets with an original acquisition date prior to July 1, 1977 are recorded in the financial statements at estimated cost, as determined by an independent professional appraisal, or at cost, if known. All subsequent acquisitions have been recorded at cost. All donated capital assets and capital assets received in a service concession arrangement are valued at acquisition value at the time of donation. Depreciation and amortization are computed using the straight -line method over the estimated useful lives of the related assets, which range from 1 to 100 years for equipment and 1 to 200 years for buildings, structures, and improvements. No depreciation or amortization is recorded in the year of acquisition, and depreciation or amortization is recorded in the year of disposal.
(f) Intangible Assets
Intangible assets are defined as identifiable, non -financial assets capable of being separated, sold, transferred, or licensed, and include contractual or legal rights. Examples of intangible assets include rights-of-way easements, land use rights, water rights, leases, subscription-based information technology arrangements ( SBITAs), licenses, and permits. The SFPUC capitalizes purchased or internally developed intangible assets with a useful life extending beyond one reporting period. It has established a capitalization threshold of $100. Intangible assets are amortized over the benefit period or the contract term for leases and SBITAs, except for certain assets having an indefinite useful life. Assets with an indefinite useful life generally provide a benefit that is not constrained by legal or contractual limitations or any other external factor and, therefore, are not amortized (see Note 4).
75 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
(g) Construction Work in Progress
The cost of acquisition and construction of major plant and equipment is recorded as construction work in progress. Costs of discontinued construction projects are recorded as expenses in the year in which the decision is made to discontinue such projects.
(h) Bond Discount, Premium, and Issuance Costs
Bond issuance costs related to prepaid insurance costs are capitalized and amortized using the effective interest method. Other bond issuance costs are expensed when incurred. Original issue bond discounts or premiums are offset against the related debt and are also amortized using the effective interest method.
(i) Accrued Compensated Absences
City employees may accumulate earned, but unused leave benefits up to a specified maximum, as outlined in their applicable leave policies. In accordance with GASB Statement No. 101, Compensated Absences , the SFPUC recognizes liabilities for leaves that are attributable to services already rendered, will be paid upon separation or usage, and are more likely than not to be used or paid. Compensated absences that meet these criteria consist of vacation, sick, compensatory time, and other holidays and leaves. The SFPUC records the compensated absences liability, including employer payroll taxes and the employer's share of social security and Medicare taxes, as both current and non- current liabilities in the Statements of Net Position.
The SFPUC applies the current pay rates of active employees to leave balances in effect at fiscal year-end.
(j) Workers’ Compensation
The SFPUC is self -insured for workers’ compensation claims and accrues the estimated cost of those claims, including the estimated cost of incurred but not reported claims (see Note 15(b)).
(k) General Liability
The SFPUC is self -insured for general liability and uninsurable property damage claims.
Commercially uninsurable property includes assets that are underground or provide transmission and distribution. Maintained commercial coverage does not cover claims attributed to loss from earthquake, contamination, pollution remediation efforts, and other specific naturally occurring contaminants such as mold. As of June 30, 2025, the SFPUC estimated its liability for pending and threatened lawsuits based on the Office of the City Attorney’s assessment of probable claims and historical trends for incurred but not reported losses. The recorded liability represents management’s best estimate of the SFPUC’s potential exposure based on currently available information.
During fiscal year 2025, the SFPUC changed its methodology for estimating claims liability. The SFPUC’s claims liability had historically been actuarially determined. The revised measurement methodology aligns more closely with the Office of City Attorney’s judgment of the SFPUC’s potential exposure based on currently available information. This prospective change in accounting estimate is intended to enhance the understandability, relevance, and timeliness of the financial information.
Affected financial statement items include: current and noncurrent estimated claims payables; functional expenses in the statement of activities under governmental activities; and general and administrative expenses in the proprietary S tatement of R evenues, Expenses, and C hanges in Net Position (see Note 15(a)).
76 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
(l) Arbitrage Rebate Payable
Certain bonds are subject to arbitrage rebate requirements in accordance with regulations issued by the U.S. Treasury Department. The requirements generally stipulate that earnings from the investment of the tax exempt bond proceeds that exceed related interest costs on the bonds must be remitted to the federal government on every fifth anniversary of each bond issue. The Water Enterprise arbitrage rebate liability as of June 30, 2025 and 2024 w as $ 1,821 and $ 869, respectively. The Wastewater Enterprise arbitrage liability as of June 30, 202 5 and 2024 w as $4,544 and $8,521, respectively. Hetchy Water, and CleanPowerSF did not have arbitrage rebate liability as of June 30, 202 5 and 2024. Hetchy Power arbitrage liability as of June 30, 2025 and 2024 was $207 and $184, respectively, related to 2021 Series AB and 2023 Series A revenue bonds (see Note 7).
(m) Refunding of Debt
Gains or losses occurring from refunding of debt prior to maturity are reported as deferred outflows and deferred inflows of resources from refunding of debt. Deferred outflows and deferred inflows of resources are recognized as a component of interest expense using the effective interest method over the remaining life of the old debt or the life of the new debt, whichever is shorter.
(n) Deferred Inflow of Resources and Deferred Outflow of Resources
Deferred inflows of resources represent an acquisition of net assets that applies to future periods.
Deferred outflows of resources represent a consumption of net assets that applies to future periods.
(o) Income Taxes
As a department of a government agency, the SFPUC is exempt from both federal income taxes and California State franchise taxes.
(p) Revenue Recognition
Charges for water, wastewater, and power services are based on usage. Effective July 1, 2013, the majority of residential and non- residential customers are billed on a monthly basis except for building and contractor customers which are billed on a bi -monthly basis by the Water and Wastewater Enterprises. Hetchy Water, Hetchy Power and CleanPowerSF revenues are based on water and power consumption and billing rates. Generally, customers are billed monthly.
Revenues earned but unbilled are accrued as charges for services receivables on the Statements of Net Position. The unbilled amounts for the fiscal years ended June 30, 2025 and 2024 were as follow:
(q) Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows, liabilities, and deferred inflows and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fiscal Years
Ended June 30 Water Wastewater
Hetchy
Water
Hetchy
Power CleanPowerSF
SFPUC
Total
2025 $ 38,703 1 9,103 — 4,694 27,728 90,228 2024 44,465 23,256 — 3,624 25,591 96,936 77 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
(r) Eliminations
Eliminations for internal activities between Water and Hetchy Power and Wastewater and Hetchy Power are made in the Statements of Net Position. There were activities requiring eliminations during the fiscal years ended June 30, 2025 between Water and Hetchy Power and Wastewater and Hetchy Power and June 30, 2024 between Wastewater and Hetchy Power.
(s) Accounting and Financial Reporting for Pollution Remediation Obligations
According to GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, a government would have to estimate its expected outlays for pollution remediation if it knows a site is polluted, and any of the following recognition triggers occur:
● Pollution poses an imminent danger to the public or environment and a government has little or no discretion to avoid fixing the problem;
● A government has violated a pollution prevention-related permit or license; ● A regulator has identified (or evidence indicates it will identify) a government as responsible (or potentially responsible) for cleaning up pollution, or for paying all or some of the cost of the cleanup;
● A government is named (or evidence indicates that it will be named) in a lawsuit to compel it to address the pollution; or
● A government begins or legally obligates itself to begin cleanup or post -cleanup activities (limited to amounts the government is legally required to complete).
As a part of ongoing operations, situations may occur requiring the removal of pollution or other hazardous material. These situations typically arise in the process of acquiring an asset, preparing an asset for its intended use, or during the design phase of projects under review by the project managers. Other times, pollution may arise during the implementation and construction of a major or minor capital project. Examples of pollution may include but are not limited to: asbestos or lead paint removal; leaking of sewage in underground pipes or neighboring areas, chemical spills, removal and disposal of known toxic waste, harmful biological and chemical pollution of water, or contamination of surrounding soils by underground storage tanks (see Note 16(d)).
(t) Pension
For purposes of measuring the net pension liability (asset) and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the San Francisco Employees’ Retirement System (SFERS) plan and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Plan member contributions are recognized in the period in which the contributions are due. Investments are reported at fair value (See Note 13(a)).
(u) Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability (asset) and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Retiree Health Care Trust Fund (RHCTF) and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the plan.
For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Plan member contributions are recognized in the period in which the contributions are due. Investments are reported at fair value (see Note 13(b)).
78 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
(v) New Accounting Standards Adopted in Fiscal Year 2025
1) In June 2022, the GASB issued Statement No. 101, Compensated Absences . This statement requires that liabilities for compensated absences be recognized if the leave is attributable to services already rendered and the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means and establishes definitions, guidance, and disclosure requirements related to compensated absences. The new standard is effective for periods beginning after December 15, 2023. The SFPUC adopted the provisions of Statement No. 101 in fiscal year 2025. In accordance with GASB Statement No. 100, Accounting Changes and Error Corrections, the SFPUC reported the implementation of GASB 101 as a change in accounting principle. The cumulative effect of applying the new recognition and measurement guidance as of July 1, 2023 was recorded as a restatement of beginning net position and liabilities.
The impact to beginning net position is presented in the following table:
2) In December 2023, the GASB issued Statement No. 102, Certain Risk Disclosures . This statement establishes financial reporting requirements for risk related to vulnerabilities due to certain concentrations or constraints within governments. The new standard is effective for periods beginning after June 15, 2024. The SFPUC adopted the provisions of Statement No. 102 in fiscal year 2025 which did not have a significant effect on its financial statements.
(w) GASB Statements Implemented in Fiscal Year 2024
1) In April 2022, the GASB issued Statement No. 99, Omnibus 2022. GASB Statement No. 99 addresses a variety of topics. The requirements related to extension of the use of the London Interbank Offered Rate, accounting for Supplemental Nutrition Assistance Program distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement No. 34, and terminology updates related to Statement No. 53 and Statement No. 63 were adopted by the City for the year ended June 30, 2022. The requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement No. 53 are effective for fiscal years beginning after June 15, 2023. The SFPUC adopted the provisions of Statement No. 99 in fiscal year 2024 which did not have a significant effect on its financial statements.
2) In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections. This statement enhances accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The new standard is effective for periods beginning after June 15, 2023. The SFPUC adopted the provisions of Statement No. 100 in fiscal year 2024 which did not have a significant effect on its financial statements.
(x) Future Implementation of New Accounting Standards
1) In April 2024, the GASB issued Statement No. 103, Financial Reporting Model Improvements.
This statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. The new standard is effective for periods beginning after June 15, 2025. The SFPUC will implement the provisions of Statement No. 103 in fiscal year 2026.
Water Wastewater
Hetchy
Water
Hetchy
Power CleanPowerSF
SFPUC
Total
7/1/2023 Net Position as previously reported $ 692,073 1, 398,834 274,128 518,350 118,001 3,001,386 Changes in accounting principle (15,244) (12,755) (2,855) (3,489) (313) (34,656) 7/1/2023 Net Position as restated $ 676,829 1,386,079 271,273 514,861 117,688 2,966,730 79 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
2) In September 2024, the GASB issued Statement No. 104, Disclosure of Certain Capital Assets.
This statement requires certain types of capital assets, such as lease assets recognized in accordance with Statement No. 87, Leases, and intangible right -to-use assets recognized in accordance with Statement No. 94, Public-Private and Public -Public Partnerships and Availability Payment Arrangements to be disclosed separately by major classes of underlying assets in the capital assets note disclosures. Subscription assets recognized in accordance with Statement No. 96, Subscription -Based Information Technology Arrangements are also required to be disclosed separately. Furthermore, the statement requires intangible assets other than those three types to be disclosed separately by major class. Finally, the statement requires additional disclosures for capital assets held for sale. The new standard is effective for periods beginning after June 15, 2025. The SFPUC will implement the provisions of Statement No. 104 in fiscal year 2026.
(y) Reclassifications
The SFPUC has reclassified certain amounts relating to the prior period to conform to its current period presentation.
For Water and Wastewater Enterprises, c ertain other operating revenues, specifically charges to City municipal departments have been reclassified to charges for services for fiscal year 2024. In addition, all SFPUC enterprises cash paid for rebates, program incentives and cash received from settlement and license fees in the direct cash flows statement has been reclassified under operating activities, lease receipts were reclassified from operating activities to capital and related financing activities in the direct cash flow, and lease and subscription payments were reclassified to acquisition and construction of capital assets under cash flows from capital and related financing activities for fiscal year 2024. These reclassifications had no effect on previously reported changes in net position.
(3) Cash, Cash Equivalents, and Investments
Cash, cash equivalents, and investments with the City Treasury are invested in an unrated City pool pursuant to investment policy guidelines established by the City Treasurer. The objectives of the policy guidelines are, in order of priority, preservation of capital, liquidity, and yield. The policy addresses soundness of financial institutions in which the City will deposit funds, types of investment instruments as permitted by the California Government Code, and the percentage of the portfolio that may be invested in certain instruments with longer terms to maturity. The City Treasurer allocates income from the investment of pooled cash at month- end in proportion to SFPUC’s average daily cash balances. The primary objectives of SFPUC’s investment policy are consistent with the City’s policy.
Custodial Credit Risk – Deposits
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the SFPUC will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits.
The California Government Code requires California banks and savings and loan associations to secure the SFPUC’s deposits not covered by Federal Deposit Insurance Corporation (FDIC) insurance by pledging government and/or local agency securities as collateral. The fair value of such pledged securities must equal at least 110% and be of the type authorized in California Government Code, Section 53651 (a) through (i). The collateral must be held at the pledging bank’s trust department or another bank, acting as the pledging bank’s agent, in the SFPUC ’s name. At June 30, 2025, all banks with funds deposited by the Treasurer secured deposits with sufficient collateral or FDIC insurance.
80 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in interest rates. Information about the sensitivity to the fair values of the SFPUC ’s investments to interest rate fluctuations is provided by the tables below, which show the distribution of the SFPUC’s investments by maturity.
Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to pay the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
Custodial Credit Risk – Investments
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the SFPUC will not be able to recover the value of its investment or collateral securities that are in the possession of another party.
The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments; however, it is the practice of the City Treasurer that all investments are insured, registered or held by the Treasurer’s custodial agent in the SFPUC ’s name. The SFPUC also has investments with trustees related to the issuance of bonds that are uninsured, unregistered and held by the counterparty’s trust departments but not in the SFPUC’s name. These amounts are included in the investments outside City Treasury and are provided by the tables below.
The SFPUC categorizes its fair value measurements within the fair value hierarchy established by GAAP.
The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The inputs and techniques used for valuing securities are not necessarily an indication of risk associated with investing in those securities.
Concentration of Credit Risk
The City’s investment policy contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code and/or its investment policy. U.S. Treasury and agency securities explicitly guaranteed by the U.S. government are not subject to single issuer limitation.
81 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Department-wide Business Type Activities
Department-wide restricted and unrestricted cash and investments outside City Treasury , including commercial paper issuers, credit ratings and the fair value hierarchy as of June 30, 2025 and 2024 consist of the following:
Department-wide cash, cash equivalents, and investments are shown on the accompanying statements of net position as follows:
The following table shows the percentage distribution of the City’s pooled investments by maturity:
Fair Value
Measurements Using
Credit Ratings
Investments
exempt from
Quoted prices in
active markets for
identical assets
(S&P/Moody's) Maturities Fair Value fair value (Level 1) U.S. Treasury Money Market Funds AAAm/Aaa-mf < 90 days $ 127,985 127,985 — Money Market Funds A-1/P-1 < 90 days 105 105 —
Commercial Paper-Royal Bank of Canada A-1+/P-1 September 15, 2025 24,765 — 24,765 U.S. Treasury Bonds & Notes A-1+/P-1 September 15, 2025 18,180 — 18,180 U.S. Treasury Bonds & Notes A-1+/P-1 March 31, 2026 24,663 — 24,663 U.S. Treasury Bonds & Notes A-1+/P-1 October 15, 2025 2,999 — 2,999 Cash and Cash Equivalents N/A 14,299 14,299 —
Total Restricted Cash and Investments outside City Treasury $ 212,996 142,389 70,607 Cash and Cash Equivalents N/A $ 126 126 —
Total Unrestricted Cash and Investments outside City Treasury $ 126 126 — Fair Value
Measurements Using
Credit Ratings
Investments
exempt from
Quoted prices in
active markets for
identical assets
(S&P/Moody's) Maturities Fair Value fair value (Level 1) U.S. Treasury Money Market Funds AAAm/Aaa-mf < 90 days $ 64,783 64,783 — Money Market Funds A-1/P-1 < 90 days 95 95 —
Commercial Paper-Toyota Motor Corp A-1+/P-1 < 90 days 6,935 — 6,935 Commercial Paper-Toronto-Dominion Bank A-1+/P-1 < 90 days 19,342 — 19,342 Commercial Paper-Toyota Motor Corp A-1+/P-1 October 11, 2024 48,238 — 48,238 Commercial Paper-Toronto-Dominion Bank A-1+/P-1 October 28, 2024 13,256 — 13,256 U.S. Agencies Securities AA+/Aaa March 21, 2025 17,538 — 17,538 U.S. Agencies Securities AA+/Aaa April 17, 2025 12,964 — 12,964 U.S. Treasury Bonds & Notes A-1+/P-1 September 15, 2025 17,872 — 17,872 U.S. Treasury Bonds & Notes A-1+/P-1 October 15, 2025 2,972 — 2,972 Cash and Cash Equivalents N/A 15,014 15,014 —
Total Restricted Cash and Investments outside City Treasury $ 219,009 79,892 139,117 Cash and Cash Equivalents N/A $ 386 386 —
Total Unrestricted Cash and Investments outside City Treasury $ 386 386 — June 30, 2025
Investments
June 30, 2024
Investments
2025 2024
Current assets:
Cash and investments with City Treasury $ 1,413,624 $ 1,178,511 Cash and investments outside City Treasury 126 386
R
estricted cash and investments outside City Treasury 116,219 88,692 Non-current assets:
Restricted cash and investments with City Treasury 635,036 184,690 Restricted cash and investments outside City Treasury 96,777 130,317 Total cash, cash equivalents, and investments $ 2, 261,782 $ 1,582,596 Fiscal Years
ended June 30 Under 1 1 to less than 6 6 to less than 12 12 to 60 2025 20.8% 18.9% 17.5% 42.8%
2024 22.2% 19.5% 16.3% 42.0%
Investment maturities (in months)
82 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Water Enterprise
Some restricted assets are held by an independent trustee outside the City’s investment pool. The assets are held for the purpose of paying future interest and principal on the bonds and for eligible capital project expenditures. The current balances as of June 30, 2025 and 2024 were $ 85,898 and $103,250, respectively. The Water Enterprise held all investments in guaranteed investment contracts, treasury and government obligations, commercial paper, corporate bonds, and notes, as well as money market mutual funds consisting of Treasury and Government Obligations.
Funds held by the trustee established under the 2002 Amended and Restated Indentures agreements are invested in “Permitted Investments,” as defined in the agreement, which includes money market funds and investment agreements. The agreement permits investment in money market funds registered under the Federal Investment Company Act of 1940 whose shares are registered under the Federal Securities Act of 1933 and have a rating by S&P of “AAAm-G,” “AAAm,” or “Aam,” and a rating by Moody’s of “Aaa,” “Aa1,” or “Aa2”. The credit ratings of the money market funds invested in as of June 30, 2025 were “Aaa- mf” and “P-1” by Moody’s, and “AAAm” and “A -1” by S&P. The credit ratings of the money market funds invested in as of June 30, 2024 were “Aaa- mf” and “P -1” by Moody’s, and “AAAm” and “A -1” by S&P.
Investment agreements must be with a U.S. bank or trust company that have a rating by Moody’s and S&P of “A” or higher, or are guaranteed by any entity with a rating of “A” or higher, at the time the agreement is entered.
The following is a summary of the restricted and unrestricted cash and investments outside City Treasury, including commercial paper issuers, credit ratings, and the fair value hierarchy as of June 30, 2025 and 2024.
The restricted cash and investments outside City Treasury as of June 30, 2025 and 2024 included an unrealized gain due to changes in fair value on commercial paper of $0 and $540, respectively.
Additional cash outside of the investment pool included revolving fund and cash in transit. The revolving fund has a balance of $28 and $28 as of June 30, 2025 and 2024, respectively, which is held in a commercial bank in non-interest bearing checking accounts covered by Federal Deposit Insurance Corporation depository insurance. These accounts were established as provided by the City’s Administrative Code for revolving fund needs. The cash in transit was $48 and $165 as of June 30, 2025 and 2024, respectively.
Fair Value
Measurements Using
Credit Ratings
Investments
exempt from
Quoted prices in
active markets for
identical assets
(S&P/Moody's) Maturities Fair Value fair value (Level 1) U.S. Treasury Money Market Funds AAAm/Aaa-mf < 90 days $ 71,597 71,597 — Money Market Funds A-1/P-1 < 90 days 52 52 —
Cash and Cash Equivalents N/A 14,249 14,249 —
Total Restricted Cash and Investments outside City Treasury $ 85,898 85,898 — Cash and Cash Equivalents N/A $ 76 76 —
Total Unrestricted Cash and Investments outside City Treasury $ 76 76 — Investments
June 30, 2025
Fair Value
Measurements Using
Credit Ratings
Investments
exempt from
Quoted prices in
active markets for
identical assets
(S&P/Moody's) Maturities Fair Value fai r value (Level 1) U.S. Treasury Money Market Funds AAAm/Aaa-mf < 90 days $ 22,815 22,815 — Money Market Funds A-1/P-1 < 90 days 43 43 —
Commercial Paper-Toyota Motor Corp A-1+/P-1 October 11, 2024 45,422 — 45,422 Commercial Paper-Toronto-Dominion Bank A-1+/P-1 October 28, 2024 10,310 — 10,310 U.S. Agencies Securities AA+/Aaa April 17, 2025 10,083 — 10,083 Cash and Cash Equivalents N/A 14,577 14,577 —
Total Restricted Cash and Investments outside City Treasury $ 103,250 37,435 65,815 Cash and Cash Equivalents N/A $ 193 193 —
Total Unrestricted Cash and Investments outside City Treasury $ 193 193 — June 30, 2024
Investments
83 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The Water Enterprise’s cash, cash equivalents, and investments are shown on the accompanying Statements of Net Position as follows:
As of June 30, 2025, except for investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments, the Water Enterprise did not have any investments in any one issuer that exceeded 5 percent of total investments.
As of June 30, 2024, the Water Enterprise has the following commercial paper investments that represent
5.0% or more of the total investments outside City Treasury.
Wastewater Enterprise
The restricted cash and investments for bond reserves are held by an independent trustee outside the City investment pool. The balances as of June 30, 2025 and 2024 were $ 119,128 and $101,708, respectively. Funds held by the trustee established under the 2003 Indenture are invested in “Permitted Investments” as defined in the Indenture. “Permitted Investments” include money market funds, registered under the Federal Investment Company Act of 1940 and whose shares are registered under the Federal Securities Act of 1933 and having a rating by S&P of “AAAm -G,” “AAAm,” or “A am” and a rating by Moody’s of “Aaa- mf,” “Aa1,” or “Aa2.” “Permitted Investments” also include commercial paper, and US treasury and agency securities.
The following is a summary of the restricted and unrestricted cash and investments outside City Treasury, including commercial paper issuers, credit ratings, and the fair value hierarchy as of June 30, 2025 and 2024.
2025 2024
Current assets:
Cash and investments with City Treasury $ 436,413 380,201 Cash and investments outside City Treasury 76 193
Restricted cash and investments outside City Treasury 28,467 40,065 Non-current assets:
Restricted cash and investments with City Treasury 137,436 71,015 Restricted cash and investments outside City Treasury 57,431 63,185 Total cash, cash equivalents, and investments $ 659,823 554,659 Fair Value
% of
Inve stme nts
Toyota Motor Corp $ 45,422 51.2 % Toronto-Dominion Bank 10,310 11.6
Fair Value
Measurements Using
Credit Ratings
Investments
exempt from
Quoted prices in
active markets for
identical assets
(S&P/Moody's) Maturities Fair Value f air value (Level 1) U.S. Treasury Money Market Funds AAAm/Aaa-mf < 90 days $ 51, 443 51,443 — Money Market Funds A-1/P-1 < 90 days 53 53 —
Commercial Paper-Royal Bank of Canada A-1+/P-1 September 15, 2025 24,765 — 24, 765 U.S. Treasury Bonds & Notes A-1+/P-1 September 15, 2025 18,180 — 18,180 U.S. Treasury Bonds & Notes A-1+/P-1 March 31, 2026 24,663 — 24,663 Cash and Cash Equivalents N/A 24 24 —
Total Restricted Cash and Investments outside City Treasury $ 119,128 51,520 67,608 Cash and Cash Equivalents N/A $ 45 45 —
Total Unrestricted Cash and Investments outside City Treasury $ 45 45 — June 30, 2025
Investments
84 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The restricted cash and investments outside City Treasury as of June 30, 2025 and 2024 included an unrealized gain due to changes in fair values on Commercial Paper, U.S. Treasury Bonds & Notes, and U.S. Agency Securities of $1,117 and $267, respectively.
The Wastewater Enterprise’s cash, cash equivalents, and investments are shown on the accompanying Statements of Net Position as follows:
As of June 30, 2025 and 2024, the Wastewater Enterprise has the following commercial paper investments that represent 5.0% or more of the total investments outside City Treasury.
Hetch Hetchy (Hetchy Water, Hetchy Power and CleanPowerSF)
Some restricted assets are held by an independent trustee outside the City’s investment pool. The assets are held for the purpose of paying future interest and principal on the bonds and for eligible capital project expenditures. The balances as of June 30, 2025 and 2024 were $7,970 and $14,051, respectively. Hetch Hetchy held all investments in treasury and government obligations, commercial paper, as well as money market mutual funds consisting of treasury and government obligations.
As of June 30, 2025, a total of $4,945 in restricted cash and investments outside City Treasury were invested in U.S. Treasury Money Market Funds with maturity date less than 90 days. Of this, $3,777 were proceeds from 2023 Series A, 2021 Series AB, and 2015 Series AB bonds and $1,168 were proceeds from certificates of participation. As of June 30, 2024, a total of $4,138 in restricted cash and investments outside City Treasury were invested in U.S. Treasury Money Market Funds with maturity date less than 90 days. Of this, $4,095 were proceeds from 2023 Series A, 2021 Series AB, and 2015 Series AB bonds and $43 were proceeds from certificates of participation.
Fair Value
Measurements Using
Credit Ratings
Investments
exempt from
Quoted prices in active
markets for identical
assets
(S&P/Moody's) Maturities Fair Value fair value (Level 1) U.S. Treasury Money Market Funds AAAm/Aaa-mf < 90 days $ 37,830 37,830 — Money Market Funds A-1/P-1 < 90 days 52 52 —
Commercial Paper-Toyota Motor Corp A-1+/P-1 < 90 days 6,935 — 6,935 Commercial Paper-Toronto-Dominion Bank A-1+/P-1 < 90 days 19,342 — 19,342 Commercial Paper-Toyota Motor Corp A-1+/P-1 October 11, 2024 1,859 — 1,859 U.S. Agencies Securities AA+/Aaa March 21, 2025 17,538 — 17,538 U.S. Treasury Bonds & Notes A-1+/P-1 September 15, 2025 17,872 — 17,872 Cash and Cash Equivalents N/A 280 280 —
Total Restricted Cash and Investments outside City Treasury $ 101,708 38,162 63,546 Cash and Cash Equivalents N/A $ 152 152 —
Total Unrestricted Cash and Investments outside City Treasury $ 152 152 — June 30, 2024
Investments
2025 2024
Current assets:
Cas
h and investments with City Treasury $ 396,961 376,658 Cash and investments outside City Treasury 45 152 Restricted cash and investments outside City Treasury 83,614 41,778 Non-current assets:
Restricted cash and investments with City Treasury 398,588 31,613 Restricted cash and investments outside City Treasury 35,514 59,930 Total cash, cash equivalents, and investments $ 914,722 510,131 Fiscal Year 2025 Fair Value
% of
Investments
Royal Bank of Canada $ 24,765 20. 8 %
Fiscal Year 2024 Fair Value
% of
Investments
Toyota Motor Corp $ 8,794 8. 7 %
Toronto-Dominion Bank 19,342 19.1
85 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The following tables present the Hetch Hetchy restricted and unrestricted cash and investments outside City Treasury as of June 30, 2025 and 2024:
Hetch Water and Hetchy Power and CleanPowerSF cash, cash equivalents, and investments as of June 30, 2025 and 2024 are shown on the accompanying Statements of Net Position as follows:
Fair Value
Measurements Using
Credit Ratings
Investments
exempt from
Quoted prices in active
markets for identical
assets
(S&P/Moody's) Maturities Fair Value fair value (Level 1) U.S. Treasury Money Market Funds AAAm/Aaa-mf < 90 days $ 4,945 4,945 — U.S. Treasury Bonds & Notes A-1+/P-1 October 15, 2025 2,999 — 2,999 Cash and Cash Equivalents N/A 26 26 —
Total Restricted Cash and Investments outside City Treasury $ 7,970 4,971 2,999 Cash and Cash Equivalents N/A $ 5 5 —
Total Unrestricted Cash and Investments outside City Treasury $ 5 5 — June 30, 2025
Investments
Fair Value
Measurements Using
Credit Ratings
Investments
exempt from
Quoted prices in active
markets for identical
assets
(S&P/Moody's) Maturities Fair Value fai r value (Level 1) U.S. Treasury Money Market Funds AAAm/Aaa-mf < 90 days $ 4,138 4,138 — Commercial Paper-Toyota Motor Corp A-1+/P-1 October 11, 2024 957 — 957 Commercial Paper-Toronto-Dominion Bank A-1+/P-1 October 28, 2024 2,946 — 2,946 U.S. Agencies Securities AA+/Aaa April 17, 2025 2,881 — 2,881 U.S. Treasury Bonds & Notes A-1+/P-1 October 15, 2025 2,972 — 2,972 Cash and Cash Equivalents N/A 157 157 —
Total Restricted Cash and Investments outside City Treasury $ 14,051 4,295 9,756 Cash and Cash Equivalents N/A $ 41 41 —
Total Unrestricted Cash and Investments outside City Treasury $ 41 41 — June 30, 2024
Investments
Hetchy Hetchy
Water P o wer CleanPowerSF Total 2025
Current assets:
Cash and investments with City Treasury $ 103,244 254,557 222,449 580,250 Cash and investments outside City Treasury — 5 — 5
Restricted cash and investments outside City Treasury — 4,138 — 4,138 Non-current assets:
Restricted cash and investments with City Treasury 20,815 78,197 — 99,012 Restricted cash and investments outside City Treasury — 3,832 — 3,832 Total cash, cash equivalents, and investments $ 124,059 340,729 222,449 687,237 Hetchy Hetchy
Water Power CleanPowerSF Total 2024
Current assets:
Cash and investments with City Treasury $ 46,471 215,370 159,811 421,652 Cash and investments outside City Treasury — 41 — 41 Restricted cash and investments outside City Treasury — 6,849 — 6,849 Non-current assets:
Restricted cash and investments with City Treasury 31,330 50,732 — 82,062 Restricted cash and investments outside City Treasury — 7,202 — 7,202 Total cash, cash equivalents, and investments $ 77,801 280,194 159,811 517,806 86 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
As of June 30, 2025, except for investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments, Hetchy Power did not have any investments in any one issuer that exceeded 5.0 percent of total investments. As of June 30, 2024, Hetchy Power has the following commercial paper investments that represent 5.0% or more of the total investments outside City Treasury:
(4) Capital Assets
Department-wide Business Type Activities – Department-wide capital assets as of June 30, 2025 and 2024 consist of the following:
*Decrease in construction work in progress is less than increase in capital assets being depreciated is mainly explained by $145 in capital contributions, $6,526 in capital project write -offs for Water, Wastewater, and Hetchy Power, offset by $60,345 mainly related to direct additions to facilities and improvements, intangible assets and machinery and equipment.
Fair Value
% of
Investments
Toyota Motor Corp $ 957 6.9 % Toronto-Dominion Bank 2,946 21.2
2024 Increases Decreases 2025
Capi
tal assets not being depreciated and amortized:
Land and rights-of-way $ 163,075 — — 163,075
Intangible assets 5,162 — — 5,162
Construction work in progress 3,915,730 1,300,944 (1,054,118) * 4,162,556 Total capital assets not being depreciated and amortized 4,083,967 1,300,944 (1,054,118) 4,330,793 Capital assets being depreciated and amortized:
Facilities and improvements 12,045,202 1,069,465 (8,601) 13,106,066 Land Improvements 10,712 — — 10,712
Intangible assets 84,598 1,306 — 85,904
Machinery and equipment 612,061 20,134 (2,073) 630,122 Right-to-use land lease assets — 545 — 545
Right-to-use building lease assets 7,453 12,213 (3,520) 16,146 Right-to-use subscription assets 1,729 4,419 (211) 5,937 Total capital assets being depreciated and amortized 12,761,755 1,108,082 * (14,405) 13,855,432 Less accumulated depreciation and amortization for:
Facilities and improvements (4,057,938) (242,163) 5,729 (4,294,372) Land Improvements (1,401) (1,681) — (3,082)
Intangible assets (57,066) (2,434) — (59,500)
Machinery and equipment (461,651) (21,720) 2,073 (481,298) Right-to-use land lease assets (30) (318) — (348)
Right-to-use building lease assets (4,403) (3,479) 618 (7,264) Right-to-use subscription assets (1,105) (2,978) 211 (3,872) Total accumulated depreciation and amortization (4,583,594) (274,773) 8,631 (4,849,736) Total capital assets being depreciated and amortized, net 8,178,161 833,309 (5,774) 9,005,696 Total capital assets, net $ 12,262,128 2,134,253 (1,059,892) 13,336,489 87 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
*Decrease in construction work in progress is less than increase in capital assets being depreciated is mainly explained by $4 8,070 in capital project write -offs for Water, Wastewater, and Hetchy Power, offset by $144,636 mainly related to direct additions to facilities and improvements, intangible assets and machinery and equipment.
Water Capital Assets – Water’s capital assets as of June 30, 2025 and 2024 consist of the following:
*Decrease in construction work in progress includes $4,394 in capital project write- offs, mainly related to University Mound East Pipeline Project. The remaining difference of $36,588 is mainly due to direct additions to facilities and improvements, intangible assets and machinery and equipment.
2023 Increases Decreases 2024
C
apital assets not being depreciated and amortized:
Land and rights-of-way $ 163,075 — — 163,075
Intangible assets 5,162 — — 5,162
Construction work in progress 3,130,427 1,221,855 (436,552) 3,915,730 Total capital assets not being depreciated and amortized 3,298,664 1,221,855 (436,552) * 4,083,967 Capital assets being depreciated and amortized:
Facilities and improvements 11,535,007 510,195 — 12,045,202 Land Improvements 6,965 3,747 — 10,712
Intangible assets 82,736 1,862 — 84,598
Machinery and equipment 595,685 17,314 (938) 612,061
Right-to-use land lease assets 605 — (605) —
Right-to-use building lease assets 16,292 — (8,839) 7,453 Right-to-use subscription assets 4,935 — (3,206) 1,729 Total capital assets being depreciated and amortized 12,242,225 533,118 * (13,588) 12,761,755 Less accumulated depreciation and amortization for:
Facilities and improvements (3,822,951) (234,987) — (4,057,938) Land Improvements (232) (1,169) — (1,401)
Intangible assets (54,082) (2,984) — (57,066)
Machinery and equipment (442,126) (20,463) 938 (461,651) Right-to-use land lease assets (580) (55) 605 (30)
Right-to-use lease assets (10,779) (2,463) 8,839 (4,403) Right-to-use subscription assets (3,537) (772) 3,204 (1,105) Total accumulated depreciation and amortization (4,334,287) (262,893) 13,586 (4,583,594) Total capital assets being depreciated and amortized, net 7,907,938 270,225 (2) 8,178,161 Total capital assets, net $ 11,206,602 1,492,080 (436,554) 12,262,128 2024 Increases Decreases 2025
Capital assets not being depreciated and amortized:
Land and rights-of-way $ 113,322 — — 113,322
Intangible assets 679 — — 679
Construction work in progress 606,804 340,538 (94,075) * 853,267 Total capital assets not being depreciated and amortized 720,805 340,538 (94,075) 967,268 Capital assets being depreciated and amortized:
Facilities and improvements 6,946,453 111,341 — 7,057,794 Intangible assets 27,714 1,056 — 28,770
Machinery and equipment 345,806 10,213 (1,343) 354,676 Right-to-use land lease assets — 545 — 545
Right-to-use building lease assets 7,011 969 (618) 7,362 Right-to-use subscription assets 860 2,145 (106) 2,899 Total capital assets being depreciated and amortized 7,327,844 126,269 * (2,067) 7,452,046 Less accumulated depreciation and amortization for:
Facilities and improvements (1,969,971) (144,593) — (2,114,564) Intangible assets (25,736) (663) — (26,399)
Machinery and equipment (269,649) (11,632) 1,343 (279,938) Right-to-use land lease assets (30) (318) — (348)
Right-to-use building lease assets (4,247) (1,243) 618 (4,872) Right-to-use subscription assets (549) (1,451) 106 (1,894) Total accumulated depreciation and amortization (2,270,182) (159,900) 2,067 (2,428,015) Total capital assets being depreciated and amortized, net 5,057,662 (33,631) — 5,024,031 Total capital assets, net $ 5,778,467 306,907 (94,075) 5,991,299 88 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
*Decrease in construction work in progress includes $58 in capital project write -offs, mainly related to Chlorine Trim Station Repairs project.
The remaining difference of $59,775 is mainly due to direct additions to facilities and improvements, intangible assets and machinery and equipment.
Wastewater Capital Assets – Wastewater’s capital assets as of June 30, 2025 and 2024 consist of the following:
*Decrease in construction work in progress is less than increase in capital assets being depreciated is due to direct additions of $11,630 to right- to-use building lease and subscription assets, direct additions of $4,336 to buildings structures and machinery and equipment, a nd contributed capital of $145 to building structures, offset by $1,309 in capital project write-offs, mainly related Interim Sidestream Nutrient Removal Project.
2023 Increases Decreases 2024
Capital assets not being depreciated and amortized:
Land and r
ights-of-way $ 113,322 — — 113,322
Intangible assets 679 — — 679
Construction work in progress 526,994 220,970 (141,160) 606,804 Total capital assets not being depreciated and amortized 640,995 220,970 (141,160) * 720,805 Capital assets being depreciated and amortized:
Facilities and improvements 6,755,307 191,146 — 6,946,453 Intangible assets 26,121 1,593 — 27,714
Machinery and equipment 337,799 8,138 (131) 345,806
Right-to-use land lease assets 605 (605) —
Right-to-use building lease assets 7,603 — (592) 7,011 Right-to-use subscription assets 2,450 — (1,590) 860
Total capital assets being depreciated and amortized 7,129,885 200,877 (2,918) 7,327,844 Less accumulated depreciation and amortization for:
Facilities and improvements (1,828,932) (141,039) — (1,969,971) Intangible assets (24,469) (1,267) — (25,736)
Machinery and equipment (258,507) (11,273) 131 (269,649) Right-to-use land lease assets (580) (55) 605 (30)
Right-to-use building lease assets (3,685) (1,154) 592 (4,247) Right-to-use subscription assets (1,755) (384) 1,590 (549) Total accumulated depreciation and amortization (2,117,928) (155,172) 2,918 (2,270,182) Total capital assets being depreciated and amortized, net 5,011,957 45,705 — 5,057,662 Total capital assets, net $ 5,652,952 266,675 (141,160) 5,778,467 2024 Increases Decreases 2025
C
apital assets not being depreciated and amortized:
Land and rights-of-way $ 44,572 — — 44,572
Intangible assets 3,046 — — 3,046
Construction work in progress 2,878,789 871,019 (893,887) * 2,855,921 Total capital assets not being depreciated and amortized 2,926,407 871,019 (893,887) 2,903,539 Capital assets being depreciated and amortized:
Facilities and improvements 4,153,796 892,722 — 5,046,518 Land Improvements 10,712 — — 10,712
Intangible assets 11,029 — — 11,029
Machinery and equipment 109,914 4,336 (501) 113,749
Right-to-use building lease assets — 10,362 (2,902) 7,460 Right-to-use subscription assets 522 1,269 (64) 1,727 Total capital assets being depreciated and amortized 4,285,973 908,689 * (3,467) 5,191,195 Less accumulated depreciation and amortization for:
Facilities and improvements (1,626,208) (75,629) — (1,701,837) Land Improvements (1,401) (1,681) — (3,082)
Intangible assets (7,702) (1,283) — (8,985)
Machinery and equipment (88,325) (4,971) 501 (92,795)
Right-to-use building lease assets — (2,052) — (2,052) Right-to-use subscription assets (334) (860) 64 (1,130) Total accumulated depreciation and amortization (1,723,970) (86,476) 565 (1,809,881) Total capital assets being depreciated and amortized, net 2,562,003 822,213 (2,902) 3,381,314 Total capital assets, net $ 5,488,410 1,693,232 (896,789) 6,284,853 89 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
*Decrease in construction work in progress is less than increase in capital assets being depreciated is due to direct addition s to buildings structures and machinery and equipment by $48,080 and $5,060, respectively, offset by $47,795 in capital project write -offs, mainly related to the Channel Tunnel/Bayside Drainage Project. It was decided to shelve this project by management and expense the design costs due to higher than expected costs, reprioritization of other various projects and uncertain future regulatory requirements.
Hetchy Water Capital Assets – Hetchy Water’s capital assets as of June 30, 2025 and 2024 consist of the following:
*Decrease in construction work in progress included $332 in capital project write- offs, mainly related to the Camp Mather Leach Field Project.
The remaining difference of $1,487 to capital asset additions was offset by direct additions to facilities, improvements, machinery, and equipment.
2023 Increases Decreases 2024
Capital assets not being depreciated and amortized:
Land and rights-of-way $ 44,572 — — 44,572
Intangible assets 3,046 — — 3,046
Construction work in progress 2,232,963 879,443 (233,617) * 2,878,789 Total capital assets not being depreciated and amortized 2,280,581 879,443 (233,617) 2,926,407 Capital assets being depreciated and amortized:
Facilities and improvements 3,923,910 229,886 — 4,153,796 Land Improvements 6,965 3,747 — 10,712
Intangible assets 10,760 269 — 11,029
Machinery and equipment 105,661 5,060 (807) 109,914
Right-to-use building lease assets 8,247 — (8,247) —
Right-to-use subscription assets 1,487 — (965) 522
Total capital assets being depreciated and amortized 4,057,030 238,962 * (10,019) 4,285,973 Less accumulated depreciation and amortization for:
Facilities and improvements (1,551,767) (74,441) — (1,626,208) Land Improvements (232) (1,169) — (1,401)
Intangible assets (6,473) (1,229) — (7,702)
Machinery and equipment (84,753) (4,379) 807 (88,325)
Right-to-use building lease assets (6,975) (1,272) 8,247 — Right-to-use subscription assets (1,065) (232) 963 (334) Total accumulated depreciation and amortization (1,651,265) (82,722) 10,017 (1,723,970) Total capital assets being depreciated and amortized, net 2,405,765 156,240 (2) 2,562,003 Total capital assets, net $ 4,686,346 1,035,683 (233,619) 5,488,410 2024 Increases Decreases 2025
C
apital assets not being depreciated and amortized:
Land and rights-of-way $ 3,232 — — 3,232
Intangible assets 6 — — 6
Construction work in progress 85,884 18,952 (6,078) * 98,758 Total capital assets not being depreciated and amortized 89,122 18,952 (6,078) 101,996 Capital assets being depreciated and amortized:
Facilities and improvements 320,540 5,427 — 325,967
Intangible assets 20,522 — — 20,522
Machinery and equipment 31,201 960 (88) 32,073
Right-to-use building lease assets 198 397 — 595
Right-to-use subscription assets 170 449 (20) 599
Total capital assets being depreciated and amortized 372,631 7,233 * (108) 379,756 Less accumulated depreciation and amortization for:
Facilities and improvements (190,419) (5,651) — (196,070) Intangible assets (10,568) (207) — (10,775)
Machinery and equipment (23,102) (1,021) 88 (24,035)
Right-to-use building lease assets (69) (83) — (152)
Right-to-use subscription assets (109) (301) 20 (390)
Total accumulated depreciation and amortization (224,267) (7,263) 108 (231,422) Total capital assets being depreciated and amortized, net 148,364 (30) — 148,334 Total capital assets, net $ 237,486 18,922 (6,078) 250,330 90 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
*The difference between decrease in construction work in progress and increase in capital assets being depreciated due to direct additions of $943 to facilities, improvements, machinery, and equipment.
Hetchy Power Capital Assets – Hetchy Power’s capital assets as of June 30, 2025 and 2024 consist of the following:
*Decrease in construction work in progress included $491 in capital project write- offs, mainly related to the Camp Mather Leach Field Project.
The remaining difference of $6,105 to capital asset additions was offset by direct additions to facilities, improvements, machinery, and equipment.
2023 Increases Decreases 2024
Capital assets not being depreciated and amortized:
Land and ri
ghts-of-way $ 3,232 — — 3,232
Intangible assets 6 — — 6
Construction work in progress 72,450 23,029 (9,595) * 85,884 Total capital assets not being depreciated and amortized 75,688 23,029 (9,595) 89,122 Capital assets being depreciated and amortized:
Facilities and improvements 311,312 9,228 — 320,540
Intangible assets 20,522 — — 20,522
Machinery and equipment 29,891 1,310 — 31,201
Right-to-use building lease assets 198 — — 198
Right-to-use subscription assets 490 — (320) 170
Total capital assets being depreciated and amortized 362,413 10,538 * (320) 372,631 Less accumulated depreciation and amortization for:
Facilities and improvements (185,066) (5,353) — (190,419) Intangible assets** (10,361) (207) — (10,568)
Machinery and equipment (22,232) (870) — (23,102)
Right-to-use building lease assets (53) (16) — (69)
Right-to-use subscription assets (353) (76) 320 (109)
Total accumulated depreciation and amortization (218,065) (6,522) 320 (224,267) Total capital assets being depreciated and amortized, net 144,348 4,016 — 148,364 Total capital assets, net $ 220,036 27,045 (9,595) 237,486 2024 Increases Decreases 2025
Capital assets not being depreciated and amortized:
Land and ri
ghts-of-way $ 1,949 — — 1,949
Intangible assets 1,431 — — 1,431
Construction work in progress 344,253 70,435 (60,078) * 354,610 Total capital assets not being depreciated and amortized 347,633 70,435 (60,078) 357,990 Capital assets being depreciated and amortized:
Facilities and improvements 624,413 59,975 (8,601) 675,787 Intangible assets 25,333 250 — 25,583
Machinery and equipment 125,140 4,625 (141) 129,624
Right-to-use building lease assets 244 485 — 729
Right-to-use subscription assets 140 357 (16) 481
Total capital assets being depreciated and amortized 775,270 65,692 * (8,758) 832,204 Less accumulated depreciation and amortization for:
Facilities and improvements (271,340) (16,290) 5,729 (281,901) Intangible assets (13,060) (281) — (13,341)
Machinery and equipment (80,575) (4,096) 141 (84,530)
Right-to-use building lease assets (87) (101) — (188)
Right-to-use subscription assets (89) (240) 16 (313)
Total accumulated depreciation and amortization (365,151) (21,008) 5,886 (380,273) Total capital assets being depreciated and amortized, net 410,119 44,684 (2,872) 451,931 Total capital assets, net $ 757,752 115,119 (62,950) 809,921 91 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
*Decrease in construction work in progress included $217 in capital project write -offs, mainly related to Distribution Interface Project. The remaining difference of $30,778 to capital asset additions was offset by direct additions to facilities, improvements, machinery, and equipment.
CleanPowerSF Capital Assets – CleanPowerSF’s capital assets as of June 30, 2025 and 2024 consist of the following:
2023 Increases Decreases 2024
Capital assets not being depreciated and amortized:
Land and rights-of-way $ 1,949 — — 1,949
Intangible assets 1,431 — — 1,431
Construction work in progress 298,020 98,413 (52,180) * 344,253 Total capital assets not being depreciated and amortized 301,400 98,413 (52,180) 347,633 Capital assets being depreciated and amortized:
Facilities and improvements 544,478 79,935 — 624,413 Intangible assets 25,333 — — 25,333
Machinery and equipment 122,334 2,806 — 125,140
Right-to-use building lease assets 244 — — 244
Right-to-use subscription assets 397 — (257) 140
Total capital assets being depreciated and amortized 692,786 82,741 * (257) 775,270 Less accumulated depreciation and amortization for:
Facilities and improvements (257,186) (14,154) — (271,340) Intangible assets (12,779) (281) — (13,060)
Machinery and equipment (76,634) (3,941) — (80,575)
Right-to-use building lease assets (66) (21) — (87)
Right-to-use subscription assets (283) (63) 257 (89)
Total accumulated depreciation and amortization (346,948) (18,460) 257 (365,151) Total capital assets being depreciated and amortized, net 345,838 64,281 — 410,119 Total capital assets, net $ 647,238 162,694 (52,180) 757,752 2024 Increases Decreases 2025
Capital assets being depreciated and amortized:
Right-to-use subscription assets $ 37 199 (5) 231
Total capital assets being depreciated and amortized 37 199 (5) 231 Less accumulated depreciation and amortization for:
Right-to-use subscription assets (24) (126) 5 (145)
Total accumulated depreciation and amortization (24) (126) 5 (145) Total capital assets being depreciated and amortized, net 13 73 — 86 Total capital assets, net $ 13 73 — 86
2023 Increas es Decreas es 2024
Capital assets being depreciated and amortized:
Right-to-use subscription assets $ 111 — (74) 37
Total capital assets being depreciated and amortized 111 — (74) 37 Less accumulated depreciation and amortization for:
Right-to-use subscription assets (81) (17) 74 (24)
Total accumulated depreciation and amortization (81) (17) 74 (24) Total capital assets being depreciated and amortized, net 30 (17) — 13 Total capital assets, net $ 30 (17) — 13
92 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
(5) Restricted Assets
Department-wide Business Type Activities
The following table summarizes the department-wide restricted assets as of June 30, 2025 and 2024.
Water Restricted Assets
Pursuant to the Indentures, all revenues of the Water Enterprise (except amounts on deposit in the rebate fund) are irrevocably pledged to the punctual payment of debt service on the Water Revenue and Refunding Bonds. Accordingly, the revenues of the Water Enterprise shall not be used for any other purpose while any of its Water Revenue and Refunding Bonds are outstanding, except as expressly permitted by the Indentures. Further, all revenues shall be deposited by the City Treasurer, by instruction of the Water Enterprise, in special funds designated as the Water Enterprise Revenue Fund (the Water Revenue Fund), which must be maintained in the City Treasury. These funds, held at the City Treasury, are recorded in the statement of net position of the Water Enterprise as cash and investments. Deposits in the Water Revenue Fund, including earnings thereon, shall be appropriated, transferred, expended, or used for the following purposes pertaining to the financing, maintenance, and operation of the Water Enterprise in accordance with the following priority:
1. The payment of operation and maintenance expenses for such utility and related facilities;
2. The payment of pension charges and proportionate payments to such compensation and other insurance or outside reserve funds as the Water Enterprise may establish, or the Board of Supervisors may require with respect to employees of the Water Enterprise;
3. The payment of principal, interest, reserve, sinking fund, and other mandatory funds created to secure Revenue Bonds issued by the Water Enterprise for the acquisition, construction, or extension of facilities owned, operated, or controlled by the Water Enterprise;
4. The payment of principal and interest on General Obligation Bonds issued by the City for the Water Enterprise’s purposes;
5. Reconstruction and replacement as determined by the Water Enterprise or as required by any of the Water Enterprise’s Revenue Bond ordinances duly adopted and approved; and
6. The acquisition of land, real property, or interest in real property for, and the acquisition, construction, enlargement, and improvement of, new and existing buildings, structures, facilities, equipment, appliances, and other property necessary or convenient to the development or improvement of such utility owned, controlled, or operated by the Water Enterprise; and for any other lawful purpose of the Water Enterprise, including the transfer of surplus funds pursuant to the Charter.
2025 2024
Cash and investments with City Treasury $ 635,036 184,690 Cash and investments outside City Treasury 212,994 219,009 Interest and other receivables 64,534 134,615
Total restricted assets $ 912,564 538,314
93 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
In accordance with the Indenture, the bond financing program maintains certain restricted cash and investment balances in trust. Restricted assets held in trust consisted of the following as of June 30, 2025 and 2024:
Restricted assets listed above as cash and investments with City Treasury are held in fund accounts within the Water Revenue Fund of the City Treasury.
2025 2024
Cash and investments with City Treasury:
Water revenue bond construction fund $ 137,436 71,015
Cash and investments outside City Treasury:
2009C Certificates of participation - 525 Golden Gate 6 965 2009D Certificates of participation - 525 Golden Gate 8,574 7,345 2010A Water revenue bond fund — —
2010B Water revenue bond fund 6 22,813
2010D Water revenue bond fund — —
2010E Water revenue bond fund 6 16,495
2010F Water revenue bond fund — —
2010G Water revenue bond fund 17,844 18,994
2015A Water revenue refunding bond fund — 7
2016A Water revenue refunding bond fund 177 13
2016B Water revenue refunding bond fund 1 1
2016C Water revenue bond fund 8 4
2017A Water revenue bond fund — 1
2017B Water revenue bond fund — 6
2017C Water revenue bond fund — —
2017D Water revenue refunding bond fund 10 6
2017E Water revenue refunding bond fund 2 1
2017G Water revenue refunding bond fund 5 —
2019A Water revenue refunding bond fund 11 7
2019B Water revenue refunding bond fund 1 1
2019C Water revenue refunding bond fund 1 1
2020A Water revenue bond fund 7 4
2020B Water revenue bond fund 3 2
2020C Water revenue bond fund 3 2
2020D Water revenue bond fund — 1
2020E Water revenue refunding bond fund 4 3
2020F Water revenue refunding bond fund 17 17
2020G Water revenue refunding bond fund — 1
2020H Water revenue refunding bond fund 1 1
2023A Water revenue bond fund 1,948 19,235
2023B Water revenue bond fund 353 3,551
2023C Water revenue refunding bond fund 121 99
2023D Water revenue refunding bond fund 14 19
2025A Water revenue refunding bond fund 117 —
2025B Water revenue refunding bond fund 6 —
2025C Water revenue refunding bond fund 7 —
2025D Water revenue refunding bond fund 28,830 —
2025E Water revenue refunding bond fund 13,271 —
2025F Water revenue refunding bond fund 239 —
Commercial Paper - Tax Exempt 28 17
Commercial Paper - Taxable 29 28
Habitat reserve endowment fund 14,246 13,610
Total cash and investments outside City Treasury 85,896 103,250 Interest and other receivables:
2,654 3,789
Due from other government for State Revolving Fund 23,806 129,580 26,460 133,369
Total restricted assets $ 249,792 307,634
Water bond construction, including interest, prepaids and other receivables 94 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Restricted Assets
The Bond indenture is a legally binding agreement between the SFPUC and U.S. Bank, N.A. (trustee) regarding the issuance of bonds and requires all net revenues of the Wastewater Enterprise (except amounts on deposit in the rebate fund) are irrevocably pledged to the punctual payment of debt service on the Wastewater revenue bonds. Accordingly, the net revenues of the Wastewater Enterprise shall not be used for any other purpose while any of its revenue bonds are outstanding except as expressly permitted by the indenture. Further, all net revenues shall be deposited by the City Treasurer, by instruction of the Wastewater Enterprise, in special funds designated as the Revenue Fund, which must be maintained in the City Treasury. These funds, held at the City Treasury, are recorded in the statements of net position of the Wastewater Enterprise as cash and investments. Deposits in the Revenue Fund, including earnings thereon, shall be appropriated, transferred, expended, or used for the following purposes and only in accordance with the following priority:
1. The payment of operation and maintenance costs of the Wastewater Enterprise;
2. The payment of bonds, parity State revolving and Federal fund loans, policy costs, and amounts due as reimbursement under any letter of credit agreement; and
3. Any other lawful purpose of the Wastewater Enterprise.
In accordance with the Indenture, the Wastewater Enterprise maintains certain restricted cash and investment balances in trust. Restricted assets held in trust consisted of the following as of June 30, 202 5 and 2024:
Restricted assets listed above as cash and investments with City Treasury are held in fund accounts within the Sewer Revenue Fund of the City Treasury.
2025 2024
Cash and investments with City Treasury:
Wastewater revenue bond construction fund $ 398,588 31,613 Cash and investments outside City Treasury:
2009 Series C Certificates of Participation – 525 Golden Gate 2 255 2009 Series D Certificates of Participation – 525 Golden Gate 2,267 1,942 2010 Series A Wastewater revenue bond fund 151 145
2010 Series B Wastewater revenue bond fund 7,318 9,027 2013 Series B Wastewater revenue bond fund 2 1
2016 Series A Wastewater revenue bond fund 4 3
2016 Series B Wastewater revenue bond fund 2 1
2018 Series A Wastewater revenue bond fund 9 3
2018 Series B Wastewater revenue bond fund 15 4
2018 Series C Wastewater revenue bond fund 3 2
2021 Series A Wastewater revenue bond fund 8 2,239
2021 Series B Wastewater revenue bond fund 1 397
2022 Series B Wastewater revenue bond fund 46 43
2023 Series A Wastewater revenue bond fund 18,169 43,212 2023 Series B Wastewater revenue bond fund 6,936 15,998 2023 Series C Wastewater revenue bond fund 10 8
2021 Series A Wastewater revenue note fund 228 218
2021 Series B Wastewater revenue note fund 1 1
2020 WIFIA Biosolids Digester 15,981 15,248
2020 WIFIA Southeast Treatment Plant 13,509 12,885
2024 Series A Wastewater revenue bond fund 21,269 —
2024 Series B Wastewater revenue bond fund 7 —
2024 Series C Wastewater revenue bond fund 28,621 —
2024 Series D Wastewater revenue bond fund 4,492 —
Commercial Paper - Tax Exempt 77 76
Total cash and investments outside City Treasury 119,128 101,708 Interest and other receivables:
Wastewater revenue bond construction fund including interest, prepaid, and other receivables 7,260 1,077 Due from other government for State Revolving Fund 30,301 — 37,561 1,077
Total restricted assets $ 555,277 134,398
95 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Water Restricted Assets
Hetchy Water restricted assets held in trust consist of the following as of June 30, 2025 and 2024:
Restricted assets listed above as cash and investments with City Treasury are held in fund accounts within the Hetchy Water Revenue Fund.
Hetchy Power Restricted Assets
Pursuant to the Hetchy Power T rust Indenture (the “Indenture”), established in fiscal year 2015, net revenues of the Hetchy Power are pledged first to the 2015 Series AB Bonds, 2021 Series AB Bonds, and 2023 Series A Bonds, and have a priority lien on the pledge of net revenues to the outstanding QECBs and NCREBs (the “Subordinate Obligations”). The Lease/Purchase Agreements for the Subordinate Obligations pledge the net revenues of the Hetchy Power to these bonds, and such pledge is subordinate in lien to the net revenues pledge for the 2015 Series AB Bonds, 2021 Series AB Bonds, and 2023 Series A Bonds (the “Bonds” or “Bond”).
In the Indenture, the SFPUC covenants and agrees that it will pay into the Revenue Fund as received all Revenues of Hetchy Power and shall be used and applied, as provided by the Indenture, solely for the purposes of operating and maintaining Hetchy Power and paying all costs, charges, and expenses in connection therewith and for the purpose of making repairs, renewals, and replacements to Hetchy Power and constructing additions, betterments, and extensions thereto.
The Indenture provides that Revenues deposited in the Revenue Fund shall be disbursed in the following order of priority:
1. The payment of operation and maintenance expenses;
2. Any priority reconstruction and replacement fund deposits;
3. Deposit in the interest account of each Bond Fund;
4. Deposit in the bond retirement account of each Bond Fund;
5. Deposit in the reserve fund;
6. (i) Payment of principal and premium, if any, and interest on any Subordinate Obligations; (ii) deposit into a reserve fund securing any Subordinate Obligations; (iii) Swap Agreement payments pursuant to Swap Agreements entered into by the SFPUC with respect to any Subordinate Obligations; and (iv) payment to any financial institution or insurance company providing any letter of credit, line of credit, or other credit or liquidity facility, including municipal bond insurance and guarantees, that secures the payment of principal or interest on any Subordinate Obligations; in each case in any order of priority within this paragraph which may be hereafter established by the SFPUC by resolution;
7. Any additional reconstruction and replacement fund deposits into the reconstruction and replacement fund;
8. Any necessary or desirable capital additions or improvements to the Hetchy Power;
9. Any payment under a Take- or-Pay Power Purchase Agreement that does not constitute an operation and maintenance expense;
10. Any payment under a Swap Agreement that does not constitute a Swap Agreement payment; and
11. Any other lawful purpose of the SFPUC.
In the Indenture, the SFPUC covenants and agrees to transfer to the Trustee for deposit in the Interest Account of each applicable Bond Fund all Refundable Credits received by the SFPUC.
2025 2024
Cash and investments with City Treasury:
Hetch Hetchy bond construction fund $ 20,815 31,330
Total restricted assets $ 20,815 31,330
96 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
In accordance with the Agreements, Hetchy Power maintains certain restricted cash and investment balances in trust. Restricted assets held in trust consist of the following as of June 30, 2025 and 2024:
Restricted assets listed above as cash and investments with City Treasury are held in fund accounts within the Hetchy Power Revenue Fund. These assets are subject to use restrictions that are externally imposed by creditors, grantor, contributors, or by the laws or regulations of other governments.
(6) Short-Term Debt
Department-wide Business Type Activities
The following table summarizes the department-wide commercial paper debt.
Water Short-Term Debt
The Commission and the Board of Supervisors have authorized the overall Interim Funding Program issuance of up to $500,000, pursuant to the voter -approved 2002 Proposition E. In December 2024, the Board of Supervisors approved an expansion of the Water Enterprise Interim Funding Program by $250,000 to a total Water Enterprise Interim Funding Program size of $750,000. The program is made up of two components: (1) four series totaling $550,000 (aggregate principal amount) that are for the issuance of either tax -exempt or taxable commercial paper and which are each supported by a high- grade bank credit facility in the form of a letter of credit or bank liquidity facility; and (2) two series totaling $200,000 direct bank loan that can be used to make tax -exempt or taxable draws from a high-grade bank pursuant to a revolving credit agreement. As of June 30, 2025 and 2024, amounts outstanding under Proposition E were $20,000 and $190,000, respectively. Commercial paper interest rates ranged from
2.6% to 4.4%.
With maturities up to 270 days, the Water Enterprise intends to maintain the program by remarketing the commercial paper upon maturity over the near- to-medium term, at which time outstanding commercial paper will likely be refunded with revenue bonds. This is being done to take advantage of the continued low interest rate environment. If the commercial paper interest rates rise to a level that exceeds these benefits, the Water Enterprise will refinance the commercial paper with the long-term, fixed-rate debt.
As of June 30, 2025, the Water Enterprise has $20,000 in outstanding commercial paper. As of June 30, 2024, the Water Enterprise had $190,000 in outstanding commercial paper which were repaid by the 2025 Series DE Water revenue refunding bonds issued in June 2025.
2025 2024
Cash and investments with City Treasury:
Hetch Hetchy construction fund $ 78, 197 50,732
Cash and investments outside City Treasury:
2009 Series C Certificates of Participation – 525 Golden Gate 1 131 2009 Series D Certificates of Participation – 525 Golden Gate 1,167 1,000 2015 Series A Revenue Bonds 2,310 2,205
2015 Series B Revenue Bonds 542 518
2021 Series AB Revenue Bonds 10 442
2023 Series A Revenue Bonds 3,914 9,730
Commercial Paper 26 25
Total restricted cash and investments outside City Treasury 7,970 14,051 Interest and other receivables:
Hetch Hetchy construction fund 513 169
Total restricted assets $ 86,680 64,952
2024 Additions Reductions 2025
Water $ 190,000 142,400 (312,400) 20,000
W
astewater 341,373 648 (342,021) —
Hetchy Power 90,654 78,679 — 169,333
SFPUC Total $ 622,027 221,727 (654,421) 189,333
97 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The commercial paper notes can be issued in the aggregate principal amounts of up to $750,000 and may be marketed and re-marketed with maturities up to 270 days and are secured by four separate bank letters of credit and two revolving notes, as set forth below. The commercial paper notes and the revolving notes are payable from revenues, and are secured on a parity lien basis with each other. The commercial paper notes and the revolving notes, collectively, are secured on a basis subordinate to the payment of debt service on outstanding bonds and SRF Loans.
As of June 30, 2025, the commercial paper notes are secured by the following series. Series A -1/A-1-T, has a $100 million letter of credit from Sumitomo Mitsui Banking Corporation, acting through its New York Branch, which expires on February 15, 2030. The agreement for the Series A -1/A-1-T credit facility stipulates a quarterly commitment fee of 0.32%, on the maintenance of ratings of at least “AA” by S&P and “Aa3” by Moody’s. Series A-2/A-2-T, has a $200 million letter of credit from Sumitomo Mitsui Banking Corporation, acting through its New York Branch, which expires on June 15, 2027. The agreement for the Series A-2/A-2-T credit facility stipulates a quarterly commitment fee of 0.29%, on the maintenance of ratings of at least “AA-” by S&P and “Aa3” by Moody’s. Series A-3/A-3-T, has a $100 million letter of credit from Barclays Bank PLC which expires on July 15, 2027. The agreement for the Series A -3/A-3-T credit facility stipulates a quarterly commitment fee of 0.38%, on the maintenance of ratings of at least “AA -” by S&P and “Aa3” by Moody’s. Series A-4/A-4-T has a $150 million Letter of Credit from PNC Bank, National Association, which expires on February 17, 2028. The agreement for the Series A -4/A-4-T credit facility stipulates a quarterly commitment fee of 0.30% on the maintenance of ratings of at least “AA -” by S&P and “Aa3” by Moody’s.
BofA Securities, Inc., J.P. Morgan Securities LLC and Wells Fargo Bank, National Association, serve as dealers for the commercial paper notes. The annual fee paid to the dealer equals 0.05% of the average outstanding principal amount of the Notes managed by the Dealer.
The revolving notes were issued pursuant to the following series. Series R -1/R-1-T has a $100 million revolving credit agreement with U.S. Bank National Association which expires on July 16, 2027. The R - 1/R-1-T revolving credit agreement stipulates an unutilized quarterly commitment fee of 0.23%, on the maintenance of ratings of at least “AA -” by S&P and “Aa3” by Moody’s. Series R -2/R-2-T has a $100 million revolving credit agreement with Wells Fargo Bank, National Association, which expires of March 3, 2028. The R -2/R-2-T revolving credit agreement stipulates an unutilized quarterly commitment fee of
0.25% on the maintenance of ratings of at least “AA -” by S&P and “Aa3” by Moody’s. The revolving credit agreement had $0 outstanding as of June 30, 2025.
The commercial paper reimbursement agreement and the interim funding program revolving lines of credit for the Water Enterprise, contain a provision that in the event advances (or drawings) or loans remain unpaid, such advances (or drawings) or loans, will convert into term loans and will be subject to the repayment provisions relating thereto.
The Water Enterprise had $730,000 and $310,000 in unused authorization as of June 30, 2025 and 2024, respectively. Significant events of default include 1) payment defaults 2) material breach of warranty, representation, or other non-remedied breach of covenants as specified in the respective agreements (not cured within applicable grace periods) and 3) bankruptcy and insolvency events, which may result in all outstanding obligations to be immediately due and payable (unless waived by the respective Bank, if applicable); or issuance of a No -Issuance Notice, reduction in credit to outstanding amount plus interest coverage, and/or termination of the respective agreement. As of June 30, 2025, there were no such events describe herein.
Wastewater Short-Term Debt
The Commission and Board of Supervisors have authorized the overall Interim Funding Program issuance of up to $750,000, pursuant to the voter -approved 2002 Proposition E. In December 2024, the Board of Supervisors approved an expansion of the Wastewater Enterprise Interim Funding Program by $500,000 for a total Wastewater Enterprise Interim Funding Program size of $1,250,000. The program is made up of three components: (1) five series totaling $675,000 (aggregate principal amount) that are for the issuance of either tax-exempt or taxable commercial paper and which are each supported by a high- grade bank credit facility in the form of a letter of credit or bank liquidity facility; and (2) one series that is 98 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
for a $75,000 direct bank loan that can be used to make tax -exempt or taxable draws from a high- grade bank pursuant to a revolving credit agreement; and (3) unused authority totaling $500,000 as of June 30, 2025. The Wastewater Enterprise had $0 and $341,373 in commercial paper outstanding as of June 30, 2025 and 2024, respectively. The $341,373 was repaid by the 2024 Series CD Wastewater Revenue Bonds issued in July 2024 and was reclassed to long- term liabilities on the financial statements as of June 30, 2024.
The commercial paper notes can be issued or direct loan draws in the aggregate principal amounts of up to $750,000, and may be marketed and re -marketed with maturities up to 270 days (or if directly drawn, subject to repayment provisions per the respective agreements) and are secured by six separate bank credit facilities, as set forth below. The commercial paper notes are payable from revenues and are secured on a parity lien basis with each other, collectively the “Subordinate Obligations”. The Subordinate Obligations are secured on a subordinate basis to the payment of debt service on the Wastewater Revenue Bonds.
As of June 30, 2025, the Commercial Paper Notes are secured by the following series: Series A -1 secured by a $150,000 letter of credit from Sumitomo Mitsui Bank expires on March 2, 2029. The agreement for the Series A-1 facility stipulates a commitment fee of 0.30%, on the maintenance of ratings of at least “Aa3” by Moody’s and “AA -” by S&P. Series A- 2 secured by a $150,000 letter of credit facility stipulates a commitment fee of 0.27%, on the maintenance of ratings of at least “Aa3” by Moody’s and “AA-“ by S&P. Series A- 4 secured by a $150,000 liquidity facility from TD Bank expires on July 3, 2028.
The agreement for the Series A -4 facility stipulates a commitment fee of 0.25% on the maintenance of ratings of at least “Aa2” by Moody’s and “AA“ by S&P. Series A -6 secured by a $125,000 liquidity facility from Bank of America expires on August 2, 2027. The agreement for the Series A -6 facility stipulates a commitment fee of 0.42%, on the maintenance of ratings of at least "Aa3” by Moody’s and “AA -“ by S&P.
Series A-7 secured by a $100,000 letter of credit from Sumitomo Mitsui Bank expires on May 31, 2027.
The agreement for the Series A -7 facility stipulates a commitment fee of 0.30%, on the maintenance of ratings of at least “Aa3” by Moody’s and “AA-“ by S&P.
Series R-1 secured by a $75,000 revolving credit agreement with U.S. Bank National Association expires on July 31, 2027. The revolving credit agreement stipulates an unutilized quarterly commitment fee of
0.21%, on the maintenance of ratings of at least “Aa3” by Moody’s and “AA-“ by S&P. The revolving credit agreement had $0 outstanding as of June 30, 2025.
Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, and U.S. Bancorp Investments, Inc. serve as dealers for the commercial paper notes. The annual fee is 0.05% paid to Morgan Stanley & Co. LLC, and U.S. Bancorp Investments, Inc. and 0.045% paid to RBC Capital Markets, LLC.
The commercial paper reimbursement agreements and the commercial paper revolving credit and term loan agreements for the Wastewater Enterprise, contain a provision that in the event advances (or drawings) remain unpaid, such advances (or drawings) will convert into term loans and will be subject to the repayment provisions relating thereto.
The Wastewater Enterprise had $1,250,000 and $408,627 in unused authorization as of June 30, 2025 and 2024, respectively. Significant events of default include 1) payment defaults 2) material breach of warranty, representation, or other non -remedied breach of covenants as specified in the respective agreements (not cured within applicable grace periods), and 3) bankruptcy and insolvency events, which may result in all outstanding obligations to be immediately due and payable (unless waived by the respective Bank, if applicable); or issuance of a No -Issuance Notice, reduction in credit to outstanding amount plus interest coverage, and/or termination of the respective agreement. As of June 30, 2025 and 2024, there were no such events described herein.
Hetchy Water Short-Term Debt
Hetchy Water had no commercial paper outstanding as of June 30, 2025 and 2024.
99 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Power Short-Term Debt
Effective March 2019, under Charter Sections 9.107(6) and 9.107(8), and 2018 Proposition A, the Commission and Board of Supervisors authorized the issuance of up to $250,000 in commercial paper notes for the purpose of reconstructing, replacing, expanding, repairing or improving power facilities of Hetchy Power. In December 2024, the Board of Supervisors approved an expansion of the Power Enterprise Interim Funding Program size to $450,000. Interest rates for the commercial paper ranged from 2.7% to 3.7% and 2.8% to 3.7% in fiscal years 2025 and 2024, respectively. The Power Enterprise had $169,333 and $90,654 commercial paper outstanding as of June 30, 2025 and 2024, respectively.
The Power Enterprise had $280,667 and $159,346 in unused authorization as of June 30, 2025 and 2024, respectively.
The commercial paper notes can be issued in the aggregate principal amounts of up to $450,000 and may be marketed and re -marketed with maturities up to 270 days. The program is made up of two components: (1) three series totaling $350,000 (aggregate principal amount) that are for the issuance of either tax-exempt or taxable commercial paper and which are each supported by a high-grade bank credit facility in the form of a letter of credit or bank liquidity facility; and (2) one series totaling $100,000 as a direct bank loan that can be used to make tax -exempt or taxable draws from a high- grade bank pursuant to a revolving credit agreement. The commercial paper notes are payable from revenues, and are secured on a parity lien basis with each other and with the outstanding 2011 QECBs and 2015 NCREBs, collectively the “Subordinate Obligations.” The Subordinate Obligations are secured on a subordinate basis to the payment of debt service on the Power Revenue Bonds.
As of June 30, 2025, the commercial paper notes are secured by the following series: Series A -1 is secured by a $125,000 letter of credit from Bank of America N.A. which expires on March 6, 2026. The agreement for the Series A-1 facility stipulates a quarterly commitment fee of 0.31%, on the maintenance of ratings of at least “AA -” by S&P and “AA-” by Fitch Ratings. Series A -2 is secured by a $125,000 letter of credit from Bank of America N.A. which expires on March 6, 2026. The agreement for the Series A -2 credit facility stipulates a quarterly commitment fee of 0.29%, on the maintenance of ratings of at least “AA-” by S&P and “AA- ” by Fitch Ratings. Series A -3/A-3-T is secured by a $100,000 letter of credit from Sumitomo Mitsui Banking Corporation which expires on February 15, 2030. The agreement for the Series A-3/A-3-T credit facility stipulates a quarterly commitment fee of 0.32%, on the maintenance of ratings of at least “AA-” by S&P and “AA-” by Fitch Ratings.
Barclays Capital Inc., Goldman Sachs & Co. LLC, and RBC Capital Markets, LLC serve as dealers for the commercial paper notes. The annual fee is 0.05% paid to Barclays Capital LLC and Goldman Sachs & Co. LLC and 0.045% paid to RBC Capital markets, LLC on the average outstanding principal amount of the commercial paper notes managed by the respective dealer.
The revolving notes were issued pursuant to the following series. Series R -1/R-1-T has a $100,000 revolving credit agreement with Wells Fargo Bank N.A. which expires on March 3, 2028. The R -1/R-1-T revolving credit agreement stipulates an unutilized quarterly commitment fee of 0.25% on the maintenance of ratings of at least “AA -” by S&P and “AA -” by Fitch Ratings. The revolving credit agreement had $0 outstanding as of June 30, 2025.
The commercial paper reimbursement agreements and the interim funding program revolving line of credit for the Power Enterprise contain a provision that in the event advances (or drawings) or loans remain unpaid, such advances (or drawings) will convert into term loans and will be subject to the repayment provisions relating thereto.
Significant events of default include 1) payment defaults, 2) material breach of warranty, representation, or other non -remedied breach of covenants as specified in the respective agreements (not cured within applicable grace periods), and 3) bankruptcy and insolvency events, which may result in all outstanding obligations to be immediately due and payable (unless waived by the respective Bank, if applicable); or issuance of a No- Issuance Notice, reduction in credit to outstanding amount plus interest coverage, and/or termination of the respective agreement. As of June 30, 2025 and 2024, there were no such events described herein.
100 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
CleanPowerSF Short-Term Debt
CleanPowerSF had no commercial paper outstanding as of June 30, 2025 and 2024.
(7) Changes in Long-Term Liabilities
Department-wide Long-Term Liability activities for the years ended June 30, 2025 and 2024 are as follows:
Interest Maturity Restated Due within
rate (Calendar Year) 2024* Additions Reductions 2025 one year Revenue Bonds:
2010B water revenue bonds (Build America) 4.00 – 6.00 2040 $ 323,145 — (323,145) — — 2010E water revenue bonds (Build America) 4.90 – 6.00 2040 318,290 — (318,290) — — 2010G water revenue bonds (Build America) 6.95 2050 351,470 — — 351,470 — 2010 wastewater series B (Build America) 4.65 – 5.82 2040 177,730 — (7,745) 169,985 8,000 2013 wastewater series B 4.00 – 5.00 2042 93,095 — — 93,095 — 2015A water revenue refunding bonds 2.00 – 5.00 2036 274,135 — (274,135) — — 2016A water revenue refunding bonds 4.00 – 5.00 2039 573,500 — (113,475) 460,025 26,050 2015 hetchy power series A revenue bonds 4.00 - 5.00 2045 32,025 — — 32,025 — 2015 hetchy power series B revenue bonds 3.00 - 4.00 2026 2,005 — (910) 1,095 945 2016B water revenue refunding bonds 1.50 – 5.00 2030 45,805 — (13,720) 32,085 7,715 2016C water revenue bonds 0.87 – 4.19 2046 219,170 — (6,275) 212,895 6,455 2016 wastewater series A 4.00 – 5.00 2046 235,105 — (5,760) 229,345 6,055 2016 wastewater series B 4.00 – 5.00 2046 66,275 — (1,625) 64,650 1,705 2017A water revenue bonds 5.00 2047 22,230 — (22,230) — — 2017B water revenue bonds 5.00 2047 27,110 — (27,110) — — 2017C water revenue bonds 5.00 2047 12,970 — (12,970) — — 2017D water revenue refunding bonds 2.00 – 5.00 2035 257,295 — (73,920) 183,375 20,515 2017E water revenue refunding bonds 4.00 – 5.00 2031 47,330 — (835) 46,495 7,425 2017F water revenue refunding bonds 5.00 2031 7,270 — (770) 6,500 875 2017G water revenue refunding bonds 2.03 – 2.91 2024 5,225 — (5,225) — — 2018 wastewater series A 4.00 – 5.00 2043 214,175 — (6,580) 207,595 6,915 2018 wastewater series B 5.00 2043 173,880 — (11,690) 162,190 5,610 2019A water revenue refunding bonds 1.81 – 3.47 2043 393,080 — (79,500) 313,580 2,050 2019B water revenue refunding bonds 3.15 – 3.52 2041 16,245 — (75) 16,170 75 2019C water revenue refunding bonds 3.15 – 3.52 2041 17,695 — (80) 17,615 80 2020A water revenue bonds 4.00 – 5.00 2050 150,895 — — 150,895 — 2020B water revenue bonds 5.00 2050 61,330 — — 61,330 — 2020C water revenue bonds 4.00 2050 85,335 — — 85,335 — 2020D water revenue bonds 3.00 2050 49,200 — — 49,200 — 2020E water revenue refunding bonds 2.83 – 2.95 2047 183,635 — (34,915) 148,720 595 2020F water revenue refunding bonds 0.26 – 3.15 2047 134,025 — (16,360) 117,665 1,210 2020G water revenue refunding bonds 0.26 – 3.10 2043 64,660 — (10,835) 53,825 7,525 2020H water revenue refunding bonds 0.26 – 3.15 2047 64,130 — (10,515) 53,615 565 2021 wastewater series A 4.00 – 5.00 2051 260,835 — — 260,835 — 2021 wastewater series B 5.00 2051 37,045 — — 37,045 — 2022 wastewater series B 5.00 2034 137,080 — (8,325) 128,755 10,175 2021 hetchy power series A revenue bonds 4.00 – 5.00 2051 74,280 — (1,385) 72,895 1,455 2021 hetchy power series B revenue bonds 4.00 – 5.00 2051 49,720 — (585) 49,135 620 2023A water revenue bonds 5.00 – 5.25 2052 349,495 — — 349,495 — 2023B water revenue bonds 5.00 – 5.25 2052 64,540 — — 64,540 — 2023C water revenue refunding bonds 4.00 – 5.00 2043 486,875 — — 486,875 — 2023D water revenue refunding bonds 5.00 2035 27,980 — — 27,980 — 2023 wastewater series A 5.00 – 5.25 2042 530,565 — — 530,565 — 2023 wastewater series B 4.00 – 5.00 2042 278,155 — (75,050) 203,105 — 2023 wastewater series C 4.00 2048 165,660 — — 165,660 — 2023 hetchy power series A revenue bonds 5.00 2053 123,905 — — 123,905 — 2024 wastewater series A 4.65 2027 — 431,110 — 431,110 — 2024 wastewater series B 4.65 2037 — 87,250 — 87,250 — 2024 wastewater series C 5.00 2054 — 539,720 — 539,720 — 2024 wastewater series D 5.00 2054 — 84,895 — 84,895 — 2025A water revenue refunding bonds 4.00 – 5.00 2047 — 467, 960 — 467,960 33,260 2025B water revenue refunding bonds 5.00 2047 — 37,400 — 37,400 3,005 2025C water revenue refunding bonds 5.00 2047 — 18,075 — 18,075 1,435 2025D water revenue refunding bonds 5.00 2055 — 304,505 — 304,505 — 2025E water revenue refunding bonds 5.25 2055 — 133,480 — 133,480 — 2025F water revenue refunding bonds 4.00 – 5.00 2040 — 550,275 — 550,275 20,415 Qualified Energy Conservation Bonds 4.74 2027 2,021 — (569) 1,452 576 New Clean Renewable Energy Bonds 2015 4.62 2032 1,343 — (150) 1,193 152 Less issuance discount (107) (498) 10 (595) —
Add issuance premiums 679,630 204,348 (111,310) 772,668 — Total revenue bonds & notes payable 7,968,487 2,858,520 (1,576,054) 9,250,953 181,458
101 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year. **Ending balance Included elimination entries of $291 interfund payables and receivables between Wastewater and Hetchy Power for the 525 Golden Gate Avenue Headquarters Living Machine and $37,822 interfund payable and receivables between Water and Hetchy Power for the Mountain Tunnel Project.
Interest Maturity Restated Due within
rate (Calendar Year) 2024* Additions Reductions 2025 one year R Bd
2009D COPs (Build America) 6.36 – 6.49 2041 $ 124,975 — (4,765) 120,210 4,965 State Revolving Fund Loans (CWSRF Loans) Water 1.00 – 1.10 2057 259,970 40,314 (249) 300,035 — State Revolving Fund Loans (CWSRF Loans) Wastewater 0.80 – 1.80 2056 317,662 54,573 (5,629) 366,606 6,419 Water Infrastructure Finance and Innovation Act Loans (WIFIA) 1.45 2062 922,431 472,221 — 1,394,652 — Wastewater Commercial Papers 3.57 – 3.75 341,373 648 (342,021) — — Bond, loan, lease, and subscription interest payable 73,952 382,170 (367,555) 88,567 79,204 Arbitrage rebate payable 9,574 975 (3,977) 6,572 826 Net other postemployment benefits liability 247,902 5,681 (436) 253,147 — Net pension liability 265,927 25,370 — 291,297 —
Accrued compensated absences # 71,367 3,952 — 75,319 40,308 Accrued workers’ compensation 23,647 7,788 (6,750) 24,685 4,634 Due to other City departments** — — — — —
Lease liability 3,093 6,370 (249) 9,214 2,923
Subscription liability 617 2,113 (668) 2,062 1,735
Damage claims liability 141,919 17,682 (64,606) 94,995 21,277 Liabilities payable from restricted assets 28,867 — (7,608) 21,259 18,155 Wholesale balancing account — 12,983 — 12,983 —
Pollution remediation obligations 7,722 — (1,599) 6,123 — Unearned revenues, refunds, and other 15,276 32,872 (35,344) 12,804 11,840 $ 10,824,761 3,924,232 (2,417,510) 12,331,483 373,744 Interest Maturity Restated Due within
rate (Calendar Year) 2023 Additions Reductions 2024* one year Revenue Bonds:
2010B water revenue bonds (Build America) 4.00 – 6.00 2040 $ 336,390 — (13,245) 323,145 13,725 2010E water revenue bonds (Build America) 4.90 – 6.00 2040 331,455 — (13,165) 318,290 13,610 2010G water revenue bonds (Build America) 6.95 2050 351,470 — — 351,470 — 2010 wastewater series B (Build America) 4.65 – 5.82 2040 185,235 — (7,505) 177,730 7,745 2013 wastewater series A 1.00 – 5.00 2025 575 — (575) — — 2013 wastewater series B 4.00 – 5.00 2042 93,095 — — 93,095 — 2015A water revenue refunding bonds 2.00 – 5.00 2036 366,375 — (92,240) 274,135 29,485 2016A water revenue refunding bonds 4.00 – 5.00 2039 686,945 — (113,445) 573,500 24,800 2015 hetchy power series A revenue bonds 4.00 - 5.00 2045 32,025 — — 32,025 — 2015 hetchy power series B revenue bonds 3.00 - 4.00 2026 2,885 — (880) 2,005 910 2016B water revenue refunding bonds 1.50 – 5.00 2030 58,980 — (13,175) 45,805 13,720 2016C water revenue bonds 0.87 – 4.19 2046 225,275 — (6,105) 219,170 6,275 2016 wastewater series A 4.00 – 5.00 2046 240,580 — (5,475) 235,105 5,760 2016 wastewater series B 4.00 – 5.00 2046 67,820 — (1,545) 66,275 1,625 2017A water revenue bonds 5.00 2047 24,675 — (2,445) 22,230 2,570 2017B water revenue bonds 5.00 2047 30,095 — (2,985) 27,110 3,135 2017C water revenue bonds 5.00 2047 14,395 — (1,425) 12,970 1,500 2017D water revenue refunding bonds 2.00 – 5.00 2035 345,340 — (88,045) 257,295 10,230 2017E water revenue refunding bonds 4.00 – 5.00 2031 48,125 — (795) 47,330 835 2017F water revenue refunding bonds 5.00 2031 8,005 — (735) 7,270 770 2017G water revenue refunding bonds 2.03 – 2.91 2024 18,890 — (13,665) 5,225 5,225 2018 wastewater series A 4.00 – 5.00 2043 221,335 — (7,160) 214,175 6,580 2018 wastewater series B 5.00 2043 179,690 — (5,810) 173,880 5,335 2019A water revenue refunding bonds 1.81 – 3.47 2043 587,825 — (194,745) 393,080 2,700 2019B water revenue refunding bonds 3.15 – 3.52 2041 16,315 — (70) 16,245 75 2019C water revenue refunding bonds 3.15 – 3.52 2041 17,775 — (80) 17,695 80 2020A water revenue bonds 4.00 – 5.00 2050 150,895 — — 150,895 — 2020B water revenue bonds 5.00 2050 61,330 — — 61,330 — 2020C water revenue bonds 4.00 2050 85,335 — — 85,335 — 2020D water revenue bonds 3.00 2050 49,200 — — 49,200 — 2020E water revenue refunding bonds 2.83 – 2.95 2047 335,035 — (151,400) 183,635 915 2020F water revenue refunding bonds 0.26 – 3.15 2047 135,455 — (1,430) 134,025 1,440 2020G water revenue refunding bonds 0.26 – 3.10 2043 108,970 — (44,310) 64,660 6,360 2020H water revenue refunding bonds 0.26 – 3.15 2047 64,815 — (685) 64,130 690 2021 wastewater series A 4.00 – 5.00 2051 260,835 — — 260,835 — 2021 wastewater series B 5.00 2051 37,045 — — 37,045 — 2022 wastewater series B 5.00 2034 137,080 — — 137,080 8,325 2021 hetchy power series A revenue bonds 4.00 – 5.00 2051 74,280 — — 74,280 1,385 2021 hetchy power series B revenue bonds 4.00 – 5.00 2051 49,720 — — 49,720 585 2023A water revenue bonds 5.00 – 5.25 2052 — 349,495 — 349,495 — 2023B water revenue bonds 5.00 – 5.25 2052 — 64,540 — 64,540 — 2023C water revenue refunding bonds 4.00 – 5.00 2043 — 486,875 — 486,875 — 2023D water revenue refunding bonds 5.00 2035 — 27,980 — 27,980 — 2023 wastewater series A 5.00 – 5.25 2042 530,565 — — 530,565 — 2023 wastewater series B 4.00 – 5.00 2042 278,155 — — 278,155 — 2023 wastewater series C 4.00 2048 165,660 — — 165,660 — 2023 hetchy power series A revenue bonds 5.00 2053 — 123,905 — 123,905 — Qualified Energy Conservation Bonds 4.74 2027 2,583 — (562) 2,021 569 New Clean Renewable Energy Bonds 2015 4.62 2032 1,491 — (148) 1,343 150
102 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year. ~Water Enterprise and Hetchy Power’s commercial paper was short-term in fiscal year 2024. ^Wastewater Enterprise, as of June 30, 2024, had $341,373 in outstanding commercial paper which were repaid by 2024 Series CD Wastewater Revenue Bonds in July 2024. The $341,373 has been reclassified to long-term liabilities on the financial statements. **Ending balance Included elimination entries of $405 interfund payables and receivables between Wastewater and Hetchy Power for the 525 Golden Gate Avenue Headquarters Living Machine.
Interest Maturity Restated Due within
rate (Calendar Year) 2023 Additions Reductions 2024* one year Less issuance discount $ (115) — 8 (107) —
Add issuance premiums 618,784 143,847 (83,001) 679,630 — Revenue Notes:
2021A wastewater - Biosolids 1.00 2025 218,355 — (218,355) — — 2021B wastewater - SEP Headworks 1.00 2026 129,110 — (129,110) — — Add issuance premiums 2,091 — (2,091) — —
Total revenue bonds & notes payable 7,988,244 1,196,642 (1,216,399) 7,968,487 177,109 2009D COPs (Build America) 6.36 – 6.49 2041 129,550 — (4,575) 124,975 4,765 State Revolving Fund Loans (CWSRF Loans) Water 1.00 – 1.10 2057 163,627 97,477 (1,134) 259,970 — State Revolving Fund Loans (CWSRF Loans) Wastewater 0.80 – 1.80 2056 318,689 1,498 (2,525) 317,662 5,629 Water Infrastructure Finance and Innovation Act Loans (WIFIA) 1.45 2062 122,357 800,074 — 922,431 — Water Commercial Papers~ 2.20 – 5.15 2023 371,459 — (371,459) — — Wastewater Commercial Papers^ 3.15 – 3.74 2024 — 341,373 — 341,373 — Hetchy Power Commercial Papers~ 2.80 – 3.69 2024 116,352 — (116,352) — — Bond, loan, lease, and subscription interest payable 35,104 253,501 (214,653) 73,952 68,224 Arbitrage rebate payable 188 9,386 — 9,574 —
Net other postemployment benefits liability 234,816 18,439 (5,353) 247,902 — Net pension liability 198,360 79,038 (11,471) 265,927 — Accrued compensated absences # 31,972 39,395 — 71,367 37,718 Accrued workers’ compensation 21,190 8,016 (5,559) 23,647 4,435 Due to other City departments** 4,048 — (4,048) — —
Lease liability 5,614 — (2,521) 3,093 1,063
Subscription liability 1,423 — (806) 617 307
Damage claims liability 30,859 141,574 (30,514) 141,919 36,468 Liabilities payable from restricted assets — 28,867 — 28,867 25,513 Pollution remediation obligations 9,071 — (1,349) 7,722 — Unearned revenues, refunds, and other 12,716 26,358 (23,798) 15,276 14,696 $ 9,795,639 3,041,638 (2,012,516) 10,824,761 375,927 103 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Water Long-Term Liability activities for the years ended June 30, 2025 and 2024 are as follows:
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year. .
Interest Maturity Restated Due within
rate (Calendar Year) 2024* Additions Reductions 2025 one year Revenue Bonds:
2010B revenue bonds (Build America) 4.00 – 6.00 % 2040 $ 323,145 — (323,145) — — 2010E revenue bonds (Build America) 4.90 – 6.00 2040 318,290 — (318,290) — — 2010G revenue bonds (Build America) 6.95 2050 351,470 — — 351,470 — 2015A revenue refunding bonds 2.00 – 5.00 2036 274,135 — (274,135) — — 2016A revenue refunding bonds 4.00 – 5.00 2039 573,500 — (113,475) 460,025 26,050 2016B revenue refunding bonds 1.50 – 5.00 2030 45,805 — (13,720) 32,085 7,715 2016C revenue bonds 0.87 – 4.19 2046 219,170 — (6,275) 212,895 6,455 2017A revenue bonds 5.00 2047 22,230 — (22,230) — —
2017B revenue bonds 5.00 2047 27,110 — (27,110) — —
2017C revenue bonds 5.00 2047 12,970 — (12,970) — —
2017D revenue refunding bonds 2.00 – 5.00 2035 257,295 — (73,920) 183,375 20,515 2017E revenue refunding bonds 4.00 – 5.00 2031 47,330 — (835) 46,495 7,425 2017F revenue refunding bonds 5.00 2031 7,270 — (770) 6,500 875 2017G revenue refunding bonds 2.03 – 2.91 2024 5,225 — (5,225) — — 2019A revenue refunding bonds 1.81 – 3.47 2043 393,080 — (79,500) 313,580 2,050 2019B revenue refunding bonds 3.15 – 3.52 2041 16,245 — (75) 16,170 75 2019C revenue refunding bonds 3.15 – 3.52 2041 17,695 — (80) 17,615 80 2020A revenue bonds 4.00 – 5.00 2050 150,895 — — 150,895 — 2020B revenue bonds 5.00 2050 61,330 — — 61,330 —
2020C revenue bonds 4.00 2050 85,335 — — 85,335 —
2020D revenue bonds 3.00 2050 49,200 — — 49,200 —
2020E revenue refunding bonds 2.83 – 2.95 2047 183,635 — (34,915) 148,720 595 2020F revenue refunding bonds 0.26 – 3.15 2047 134,025 — (16,360) 117,665 1,210 2020G revenue refunding bonds 0.26 – 3.10 2043 64,660 — (10,835) 53,825 7,525 2020H revenue refunding bonds 0.26 – 3.15 2047 64,130 — (10,515) 53,615 565 2023A revenue bonds 5.00 – 5.25 2052 349,495 — — 349,495 — 2023B revenue bonds 5.00 – 5.25 2052 64,540 — — 64,540 — 2023C revenue refunding bonds 4.00 – 5.00 2043 486,875 — — 486,875 — 2023D revenue refunding bonds 5.00 2035 27,980 — — 27,980 — 2025A revenue refunding bonds 4.00 – 5.00 2047 — 467,960 — 467,960 33,260 2025B revenue refunding bonds 5.00 2047 — 37,400 — 37,400 3,005 2025C revenue refunding bonds 5.00 2047 — 18,075 — 18,075 1,435 2025D revenue refunding bonds 5.00 2055 — 304,505 — 304,505 — 2025E revenue refunding bonds 5.25 2055 — 133,480 — 133,480 — 2025F revenue refunding bonds 4.00 – 5.00 2040 — 550,275 — 550,275 20,415 Less issuance discount (107) (498) 10 (595) —
Add issuance premiums 330,679 129,352 (72,088) 387,943 — Total revenue bonds payable 4,964,637 1,640,549 (1,416,458) 5,188,728 139,250 2009D COPs (Build America) 6.36 – 6.49 2041 89,232 — (3,402) 85,830 3,545 State Revolving Funds Loan 1.00 – 1.10 2057 259,970 40,314 (249) 300,035 — Bond, loan, lease, and subscription interest payable 41,546 216,605 (215,656) 42,495 37,030 Net other postemployment benefits liability 158,301 3,674 — 161,975 — Net pension liability 152,643 14,335 — 166,978 —
Accrued compensated absences # 30,545 1,518 — 32,063 17,393 Accrued workers’ compensation 11,002 5,083 (3,784) 12,301 2,365 Arbitrage rebate payable 869 952 — 1,821 536
Lease liability 2,821 — (44) 2,777 966
Subscription liability 308 697 — 1,005 846
Damage claims liability 22,773 4,502 (12,326) 14,949 4,525 Wholesale balancing account — 12,983 — 12,983 —
Pollution remediation obligations 1,271 — (1,271) — — Total $ 5,735,918 1,941,212 (1,653,190) 6,023,940 206,456 104 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year. ~Commercial paper recorded as short-term liability in fiscal year 2024.
The payments of principal and interest amounts on various bonds are secured by net revenues of the Water Enterprise.
a) Water Revenue Bonds 2010 Series B
The 2010 Series B Bonds in the par amount of $417,720 were issued as taxable Build America Bonds (BAB) (with Direct Pay Subsidy) to provide $364,757 in new money for WSIP capital projects and pay financing costs. The 2010 Series B bonds were issued as serial and term bonds with coupons ranging from 4.0% to 6.0% and have a final maturity of 2040. The Series B bonds have a true interest cost (net of federal subsidy) of 3.9%. A portion of the proceeds from the 2025 Interest Maturity Restated Due within
rate (Calendar Year) 2023 Additions Reductions 2024* o ne year Revenue Bonds:
2010B revenue bonds (Build America) 4.00 – 6.00 % 2040 $ 336,390 — (13,245) 323,145 13,725 2010E revenue bonds (Build America) 4. 90 – 6.00 2040 331,455 — (13,165) 318,290 13,610 2010G revenue bonds (Build America) 6.95 2050 351,470 — — 351,470 — 2015A revenue refunding bonds 2.00 – 5.00 2036 366,375 — (92,240) 274,135 29,485 2016A revenue refunding bonds 4.00 – 5.00 2039 686,945 — (113,445) 573,500 24,800 2016B revenue refunding bonds 1.50 – 5.00 2030 58,980 — (13,175) 45,805 13,720 2016C revenue bonds 0.87 – 4.19 2046 225,275 — (6,105) 219,170 6,275 2017A revenue bonds 5.00 2047 24,675 — (2,445) 22,230 2,570 2017B revenue bonds 5.00 2047 30,095 — (2,985) 27,110 3,135 2017C revenue bonds 5.00 2047 14,395 — (1,425) 12,970 1,500 2017D revenue refunding bonds 2.00 – 5.00 2035 345,340 — (88,045) 257,295 10,230 2017E revenue refunding bonds 4.00 – 5.00 2031 48,125 — (795) 47,330 835 2017F revenue refunding bonds 5.00 2031 8,005 — (735) 7,270 770 2017G revenue refunding bonds 2.03 – 2.91 2024 18,890 — (13,665) 5,225 5,225 2019A revenue refunding bonds 1.81 – 3.47 2043 587,825 — (194,745) 393,080 2,700 2019B revenue refunding bonds 3.15 – 3.52 2041 16,315 — (70) 16,245 75 2019C revenue refunding bonds 3.15 – 3.52 2041 17,775 — (80) 17,695 80 2020A revenue bonds 4.00 – 5.00 2050 150,895 — — 150,895 — 2020B revenue bonds 5.00 2050 61,330 — — 61,330 —
2020C revenue bonds 4.00 2050 85,335 — — 85,335 —
2020D revenue bonds 3.00 2050 49,200 — — 49,200 —
2020E revenue refunding bonds 2.83 – 2.95 2047 335,035 — (151,400) 183,635 915 2020F revenue refunding bonds 0.26 – 3.15 2047 135,455 — (1,430) 134,025 1,440 2020G revenue refunding bonds 0.26 – 3.10 2043 108,970 — (44,310) 64,660 6,360 2020H revenue refunding bonds 0.26 – 3.15 2047 64,815 — (685) 64,130 690 2023A revenue bonds 5.00 – 5.25 2052 — 349,495 — 349,495 — 2023B revenue bonds 5.00 – 5.25 2052 — 64,540 — 64,540 — 2023C revenue refunding bonds 4.00 – 5.00 2043 — 486,875 — 486,875 — 2023D revenue refunding bonds 5.00 2035 — 27,980 — 27,980 — Less issuance discount (115) — 8 (107) —
Add issuance premiums 251,596 136,522 (57,439) 330,679 — Total revenue bonds payable 4,710,846 1,065,412 (811,621) 4,964,637 138,140 2009D COPs (Build America) 6.36 – 6.49 2041 92,499 — (3,267) 89,232 3,402 State Revolving Funds Loan 1.00 – 1.10 2057 163,627 97,477 (1,134) 259,970 — Commercial Papers~ 2.20 – 5.15 2023 371,459 — (371,459) — — Bond, loan, lease, and subscription interest payable 35,104 221,095 (214,653) 41,546 37,924 Net other postemployment benefits liability 148,601 9,700 — 158,301 — Net pension liability 115,343 37,300 — 152,643 —
Accrued compensated absences # 13,585 16,960 — 30,545 16, 300 Accrued workers’ compensation 9,735 4,336 (3,069) 11,002 2,188 A
rbitrage rebate payable — 869 — 869 —
Lease liability 4,010 — (1,189) 2,821 1,028
Subscription liability 708 — (400) 308 153
Damage claims liability 19,625 18,823 (15,675) 22,773 5,716 Pollution remediation obligations 1,271 — — 1,271 — Total $ 5,686,413 1,471,972 (1,422,467) 5,735,918 204,851 105 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Series F bonds were used to defease 2010 Series B Bonds in the par amount of $309,420. As of June 30, 2025 and 2024, the principal amount outstanding was $0 and $323,145, respectively.
b) Water Revenue Bonds 2010 Series E
In July 2010, the 2010 Series E Bonds in the par amount of $344,200 were issued as taxable Build America Bonds (with Direct Pay Subsidy) to provide $300,446 in new money proceeds for WSIP capital projects. The Series E bonds were issued as serial and term bonds with coupons ranging from 4.9% to 6.0% and have a final maturity of 2040. The Series E bonds have a true interest cost (net of federal subsidy) of 3.8%. A portion of the proceeds from the 2025 Series F bonds were used to defease 2010 Series E Bonds in the par amount of $304,680. As of June 30, 2025 and 2024, the principal amount of 2010 Series E bonds outstanding was $0 and $318,290, respectively.
c) Water Revenue Bonds 2010 Series G
In December 2010, the $351,470 Series G bonds were issued as taxable Build America Bonds (with Direct Pay Subsidy) to provide $288,252 in new money for WSIP capital projects. The Series G bonds were issued as term bonds with a coupon of 7.0% and have a final maturity of 2050. The Series G bonds have a true interest cost (net of federal subsidy) of 4.5%. As of June 30, 2025 and 2024, the principal amount of 2010 Series G bonds outstanding was $351,470.
d) Water Revenue Refunding Bonds 2015 Series A
In April 2015, the Water Enterprise issued tax -exempt revenue bonds, 2015 Series A in the amount of $429,600 for the purpose of refunding all the outstanding 2006 Series A bonds maturing on and after November 1, 2015 and portion of the outstanding 2009 Series A bonds maturing on and after November 1, 2023. The bonds carried “Aa3” and “AA -” ratings from Moody’s and S&P, respectively. The 2015 Series A bonds include serial bonds with interest rates varying from 2.0% to 5.0% and have a final maturity in 2036. The Series A bonds have a true interest cost of 3.3%. Unamortized 2006 Series A bond issuance costs were $1,392, and there were no unamortized bond issuance costs for 2009 Series A bonds at the date of the refunding.
The refunding resulted in the recognition of a deferred accounting loss of $25,365, gross debt service savings of $28,148 over the next 20 two- year terms, and an economic gain of $48,561 or
10.3% of refunded principal.
A portion of the proceeds of the 2023 Series C bonds were used to pay at closing a portion of the 2015 Series A bonds which had been tendered for purchase on August 10, 2023. The proceeds of the 2023 Series C bonds were sufficient to pay the accrued interest and tender price of maturities of the 2015 Series A bonds starting on November 1, 2028 to November 1, 2033 and November 1, 2036. On April 15, 2025, a portion of the proceeds from the 2025 Series A bonds together with other monies were used to current refund the 2015 Series A Bonds in the par amount of $244,650 with maturities starting on November 1, 2025, to November 1, 2036. As of June 30, 2025 and 2024, the principal amount of 2015 Series A bonds outstanding was $0 and $274,135, respectively.
e) Water Revenue Refunding Bonds 2016 Series AB
In October 2016, the Water Enterprise issued tax-exempt revenue bonds, 2016 Series AB in the aggregate amount of $893,820. The 2016 Series A bonds were issued for the purpose of refunding a portion of the outstanding 2009 Series A bonds maturing on and after November 1, 2020, a portion of the outstanding 2009 Series B bonds maturing on and after November 1, 2020, and a portion of the outstanding 2010 Series F bonds maturing on and after November 1, 2021.
The 2016 Series B bonds were issued for the purpose of refunding, on a current basis, all the outstanding 2006 Series B and Series C bonds, and a portion of the outstanding 2010 Series A bonds maturing on and after November 1, 2020, the bonds carried “Aa3” and “AA -” ratings from Moody’s and S&P, respectively. The 2016 Series AB bonds include serial bonds with interest 106 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
rates varying from 1.5% to 5.0% and have a final maturity in 2039. The Series AB bonds have a true interest cost of 2.9%. Unamortized bond issuance costs at the date of refunding were $145 for 2006 Series B bonds and $54 for 2006 Series C bonds. The refunding resulted in the recognition of a deferred accounting loss of $106,205, gross debt service savings of $135,966, and an economic gain of $107,152 or 11.5% of refunded principal.
A portion of the proceeds of the 2023 Series C bonds were used to pay at closing a portion of the 2016 Series A bonds which had been tendered for purchase on August 10, 2023. The proceeds of the 2023 Series C bonds were sufficient to pay the accrued interest and tender price of maturities of the 2016 Series A bonds starting on November 1, 2031 to November 1, 2035.
A portion of the proceeds from the 2025 Series A bonds together with other monies were used to pay at closing a portion of the 2016 Series A bonds which had been tendered for purchase on April 17, 2025. The proceeds of the 2025 Series A bonds were sufficient to pay accrued interest and tender price of maturities of the 2016 Series A bonds starting on November 1, 2024 to November 1, 2035.
As of June 30, 2025 and 2024, the principal amount of 2016 Series AB bonds outstanding was $492,110 and $619,305, respectively.
f) Water Revenue Bonds 2016 Series C
In December 2016, the Water Enterprise issued taxable bonds, 2016 Series C in the amount of $259,350. The bonds were issued as Green Bonds. The purpose of the bonds was to refund all of the outstanding taxable commercial paper notes in the approximate amount of $237,000, and to provide $19,975 of new money for WSIP capital projects. The bonds carried “Aa3” and “AA -” ratings from Moody’s and S&P, respectively. The 2016 Series C bonds include serial bonds with interest rates varying from 0.9% to 4.0% and have a final maturity in 2046, and two term bonds with 4.0% and 4.2% interest rates and final maturities of 2041 and 2046. The Series C bonds have a true interest cost of 3.9%. As of June 30, 2025 and 2024, the principal amount of 2016 Series C bonds outstanding was $212,895 and $219,170, respectively.
g) Water Revenue Bonds 2017 Series ABC
In December 2017, the Water Enterprise issued tax -exempt revenue bonds, 2017 ABC in the aggregate amount of $339,540. The purpose of the 2017 Series ABC Bonds was to refund approximately $120,500 aggregate principal amount of commercial paper notes and to provide $230,500 new money for WSIP capital projects, other various capital projects of the Water Enterprise, and capital projects of Hetch Hetchy Water. The bonds carried “Aa3” and “AA-” ratings from Moody’s and S&P, respectively. The 2017 Series ABC bonds include serial bonds with coupon rates of 5.0% and have final maturity in 2045, and four term bonds with coupons of 5.0% and final maturities from 2045 to 2047.
The $121,140 2017 Series A bonds were issued as tax -exempt Green Bonds to refund approximately $60,265 of commercial paper notes and to provide $65,500 in new money for WSIP capital projects. The Series A bonds were issued as serial and term bonds with coupons of
5.0% and a final maturity of 2047. The Series A bonds have a true interest cost of 3.8%. A portion of the proceeds of the 2020 Series E refunding bonds were deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreement dated October 1, 2020 to refund and legally defease a portion of the outstanding 2017 Series A bonds. These deposits, together with certain other available monies were held by the escrow agent under the Escrow Agreement and invested in non- callable Federal Securities. The principal and interest on monies held by the escrow agent will be sufficient to redeem the maturities of the 2017 Series A bonds starting on November 1, 2030 and thereafter. The defeased principal amount outstanding for the 2017 Series A Revenue Bonds were $94,140 as June 30, 2024. On April 17, 2025, a portion of the proceeds from the 2025 Series A bonds together with other monies were used to current refund the 2017 Series A Bonds in the par amount of $19,660. As of June 30, 2025 and 2024, the principal amount of 2017 Series A bonds outstanding was $0 and $22,230, respectively. 107 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The $147,725 2017 Series B bonds were issued as tax-exempt bonds to provide $150,000 in new money for Water Enterprise capital projects (non- WSIP). The Series B bonds were issued as serial and term bonds with coupons of 5.0% and have a final maturity of 2047. The Series B bonds have a true interest cost of 3.8%. A portion of the proceeds of the 2020 Series F refunding bonds were deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreement dated October 1, 2020 to refund and legally defease a portion of the outstanding 2017 Series B bonds. These deposits, together with certain other available monies were held by the escrow agent under the Escrow Agreement and invested in non- callable Federal Securities. The principal and interest on monies held by the escrow agent will be sufficient to redeem the maturities of the 2017 Series B bonds starting on November 1, 2030 and thereafter. The defeased principal amount outstanding for the 2017 Series B Revenue Bonds were $114,795 as of June 30, 2024. On April 17, 2025, a portion of the proceeds from the 2025 Series B bonds together with other monies were used to current refund the 2017 Series B Bonds in the par amount of $23,975. As of June 30, 2025 and 2024, the principal amount of 2017 Series B bonds outstanding was $0 and $27,110, respectively.
The $70,675 2017 Series C bonds were issued as tax -exempt bonds to refund approximately $60,266 of commercial paper notes and to provide $15,000 in new money for Hetch Hetchy Water capital projects. The Series C bonds were issued as serial bonds and a term bond with coupons of 5.0% and have a final maturity of 2047. The Series C bonds have a true interest cost of 3.8%. A portion of the proceeds of the 2020 Series H refunding bonds were deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreement dated October 1, 2020 to refund and legally defease a portion of the outstanding 2017 Series C bonds. These deposits, together with certain other available monies were held by the escrow agent under the Escrow Agreement and invested in non- callable Federal Securities. The principal and interest on monies held by the escrow agent will be sufficient to redeem the maturities of the 2017 Series C bonds starting on November 1, 2030 and thereafter. The defeased principal amount outstanding for the 2017 Series C Revenue Bonds were $54,925 as of June 30, 2024. On April 17, 2025, a portion of the proceeds from the 2025 Series C bonds together with other monies were used to current refund the 2017 Series C Bonds in the par amount of $11,470. As of June 30, 2025 and 2024, the principal amount of 2017 Series C bonds outstanding was $0 and $12,970, respectively.
h) Water Revenue Refunding Bonds 2017 Series DEFG
In December 2017, the Water Enterprise issued tax -exempt revenue bonds, 2017 Series DEF, and taxable 2017 Series G refunding bonds in the aggregate amount of $442,180. The 2017 Series D (WSIP, Green) bonds were issued for the purpose of refunding a portion of the outstanding 2011 Series A (WSIP) bonds maturing on and after November 1, 2022, a portion of the outstanding 2012 Series A bonds maturing on and after November 1, 2031. A portion of the proceeds of the 2023 Series C bonds were used to pay at closing a portion of the 2017 Series D bonds which had been tendered for purchase on August 10, 2023. The proceeds of the 2023 Series C bonds were sufficient to pay the accrued interest and tender price of maturities of the 2017 Series D bonds starting on November 1, 2031 to November 1, 2035.
The 2017 Series E bonds were issued for the purpose of refunding a portion of the outstanding 2011 Series C bonds maturing on or after November 1, 2022, a portion of the outstanding 2011 Series D bonds maturing on and after November 1, 2022, a portion of 2012 Series C1 bonds maturing on or after November 1, 2029.
The 2017 Series F bonds were issued for the purpose of refunding a portion of the outstanding 2011 Series B bonds maturing on or after November 1, 2022.
The taxable 2017 Series G (WSIP, Green) bonds were issued to refund a portion of the outstanding 2011 Series A bonds maturing on and after November 1, 2022.
The bonds carried “Aa3” and “AA-” ratings from Moody’s and S&P, respectively. The 2017 Series DEFG bonds include serial bonds with interest rates varying from 2.0% to 5.0% and have a final maturity in 2035. The Series DEFG bonds have a true interest cost of 2.9%. The refunding 108 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
resulted in the recognition of a deferred accounting loss of $34,275, gross debt service savings of $68,942, and an economic gain of $51,698 or 10.7% of refunded principal.
A portion of the proceeds from the 2025 Series A bonds were used to pay at closing a portion of the 2017 Series D bonds which had been tendered for purchase on April 17, 2025. The proceeds of the 2025 Series A bonds together with other monies were sufficient to pay accrued interest and tender price of maturities of a portion of the 2017 Series D bonds starting on November 1, 2030 to November 1, 2035. As of June 30, 2025 and 2024, the principal amount of 2017 Series DEFG bonds outstanding was $236,370 and $317,120, respectively.
i) Water Revenue Refunding Bonds 2019 Series ABC
In January 2020, the Water Enterprise issued taxable revenue bonds, 2019 Series ABC refunding bonds in the aggregate amount of $656,955. The 2019 Series A (WSIP, Green) bonds were issued for the purpose of refunding a portion of the outstanding 2010 Series F (WSIP) bonds maturing on and after November 1, 2020, a portion of the outstanding 2011 Series A (WSIP) bonds maturing on and after November 1, 2020, and a portion of the outstanding 2012 Series A (WSIP) bonds maturing on and after November 1, 2035. A portion of the proceeds of the 2023 Series C refunding bonds were deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreement dated August 1, 2023 to refund and legally defease a portion of the outstanding 2019 Series A bonds. These deposits, together with certain other available monies were held by the escrow agent under the Escrow Agreement and invested in non -callable Federal Securities. The principal and interest on monies held by the escrow agent will be sufficient to redeem portions of the maturities of the 2019 Series A bonds starting on November 1, 2024 to November 1, 2026 and November 1, 2029 to November 1 2033. A portion of the proceeds of the 2023 Series C bonds were used to pay at closing a portion of the 2019 Series A bonds which had been tendered for purchase on August 10, 2023. The proceeds of the 2023 Series C bonds were sufficient to pay the accrued interest and tender price of portions of maturities of the 2019 Series A bonds starting on November 1, 2026 to November 1, 2032, November 1, 2034, November 1, 2039 and November 1, 2043. The defeased principal amount outstanding for 2019 Series A Revenue Bonds were $5,745 as of June 30, 2024.
The 2019 Series B (Hetch Hetchy Water) bonds were issued for the purpose of refunding a portion of the outstanding 2011 Series B bonds maturing on or after November 1, 2032.
The 2019 Series C (Local) bonds were issued for the purpose of refunding a portion of the outstanding 2011 Series C bonds maturing on or after November 1, 2032.
The bonds carried “Aa2” and “AA-” ratings from Moody’s and S&P, respectively. The 2019 Series ABC bonds include serial bonds with interest rates varying from 1.8% to 3.5% and have a final maturity in 2043. The Series ABC bonds have a true interest cost of 3.3%. The refunding resulted in the recognition of a deferred accounting loss of $17,329, gross debt service savings of $119,827, and an economic gain of $92,556 or 14.0% of refunded principal.
A portion of the proceeds from the 2025 Series A bonds were used to pay at closing a portion of the 2019 Series A bonds which had been tendered for purchase on April 17, 2025. The proceeds of the 2025 Series A bonds together with other monies were sufficient to pay accrued interest and tender price of maturities of a portion of the 2019 Series A bonds starting on November 1, 2025 to November 1, 2043. As of June 30, 2025 and 2024, the principal amount of 2019 Series ABC bonds outstanding was $347,365 and $427,020, respectively.
j) Water Revenue Bonds 2020 Series ABCD
In September 2020, the Water Enterprise issued tax -exempt revenue bonds, 2020 Series ABCD in the aggregate amount of $346,760. The purpose of the 2020 Series ABCD Bonds was to refund approximately $229,770 aggregate principal amount of commercial paper notes and to provide $164,632 new money for various capital projects of the Water Enterprise, and capital projects of Hetch Hetchy Water. The bonds carried “Aa2” and “AA -” ratings from Moody’s and 109 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
S&P, respectively. The 2020 Series ABCD bonds include term bonds with coupons of 3.0% to
5.0% and final maturity in 2050.
The $150,895 2020 Series A bonds were issued as tax -exempt Green Bonds to refund approximately $180,000 of commercial paper notes for WSIP capital projects. The Series A bonds were issued as term bonds with coupons of 4.0% and 5.0% and a final maturity of 2050. The 2020 Series A bonds have a true interest cost of 3.3%. As of June 30, 2025 and 2024, the principal amount of 2020 Series A bonds outstanding was $150,895.
The $61,330 Series B bonds were issued as tax -exempt bonds to provide $69,644 in new money for Water Enterprise capital projects (non- WSIP, Regional). The Series B bonds were issued as term bonds with coupons of 5.0% and have a final maturity of 2050. The Series B bonds have a true interest cost of 3.7%. As of June 30, 2025 and 2024, the principal amount of 2020 Series B bonds outstanding was $61,330.
The $85,335 Series C bonds were issued as tax -exempt bonds to provide $94,948 in new money for Water Enterprise capital projects (non-WSIP, Local). The Series C bonds were issued as term bonds with coupons of 4.0% and have a final maturity of 2050. The Series C bonds have a true interest cost of 3.0%. As of June 30, 2025 and 2024, the principal amount of 2020 Series C bonds outstanding was $85,335.
The $49,200 Series D bonds were issued as tax-exempt bonds to refund approximately $49,761 of commercial paper notes for Hetch Hetchy Water capital projects. The Series D bonds were issued as term bonds with coupons of 3.0% and a final maturity of 2050. The 2020 Series D bonds have a true interest cost of 2.7%. As of June 30, 2025 and 2024, the principal amount of 2020 Series D bonds outstanding was $49,200.
k) Water Revenue Bonds 2020 Series EFGH
In October 2020, the Water Enterprise issued taxable revenue bonds, 2020 Series EFGH refunding bonds in the aggregate amount of $664,395. The 2020 Series E (WSIP, Green) bonds were issued for the purpose of refunding a portion of the outstanding 2010 Series D (WSIP) bonds maturing on and after November 1, 2020, a portion of the outstanding 2012 Series A (WSIP) bonds maturing on and after November 1, 2038, and a portion of the outstanding 2017 Series A (WSIP) bonds maturing on and after November 1, 2030. A portion of the proceeds of the 2023 Series C bonds were used to pay at closing a portion of the 2020 Series E bonds which had been tendered for purchase on August 10, 2023. The proceeds of the 2023 Series C bonds were sufficient to pay the accrued interest and tender price of the 2020 Series E bonds maturing November 1, 2041. A portion of the proceeds from the 2025 Series A bonds were used to pay at closing a portion of the 2020 Series E bonds which had been tendered for purchase on April 17, 2025. The proceeds of the 2025 Series A bonds together with other monies were sufficient to pay accrued interest and tender price of maturities of a portion of the 2020 Series E bonds starting on November 1, 2025 to November 1, 2047.
The 2020 Series F (non -WSIP, Regional) bonds were issued for the purpose of refunding a portion of the outstanding 2017 Series B bonds maturing on or after November 1, 2030. A portion of the proceeds from the 2025 Series B bonds were used to pay at closing a portion of the 2020 Series F bonds which had been tendered for purchase on April 17, 2025. The proceeds of the 2025 Series B bonds together with other monies were sufficient to pay accrued interest and tender price of maturities of a portion of the 2020 Series F bonds starting on November 1, 2025 to November 1, 2047.
The 2020 Series G (non- WSIP, Local) bonds were issued for the purpose of refunding a portion of the outstanding 2010 Series D bonds maturing on or after November 1, 2020, a portion of the 2011 Series D bonds maturing on or after November 1, 2022, a portion of 2012 Series B bonds maturing on or after November 1, 2031, and a portion of 2012 Series C bonds maturing on or after November 1, 2025. A portion of the proceeds of the 2023 Series D refunding bonds were deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreement 110 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
dated August 1, 2023 to refund and legally defease a portion of the outstanding 2020 Series G bonds. These deposits, together with certain other available monies were held by the escrow agent under the Escrow Agreement and invested in non- callable Federal Securities. The principal and interest on monies held by the escrow agent will be sufficient to redeem portions of the maturities of the 2020 Series G bonds maturing on November 1, 2024 and November 1, 2025. A portion of the proceeds of the 2023 Series D bonds were used to pay at closing a portion of the 2020 Series G bonds which had been tendered for purchase on August 10, 2023. The proceeds of the 2023 Series D bonds were sufficient to pay the accrued interest and tender price of portions of maturities of the 2020 Series G bonds starting on November 1, 2026 to November 1, 2032 and November 1, 2035. The defeased principal amount outstanding for the 2020 Series G Revenue Bonds was $1,495 as of June 30, 2024. A portion of the proceeds from the 2025 Series B bonds were used to pay at closing a portion of the 2020 Series G bonds which had been tendered for purchase on April 17, 2025. The proceeds of the 2025 Series B bonds together with other monies were sufficient to pay accrued interest and tender price of maturities of a portion of the 2020 Series G bonds starting on November 1, 2025 to November 1, 2032.
The 2020 Series H (Hetch Hetchy Water) bonds were issued for the purpose of refunding a portion of the outstanding 2017 Series C bonds maturing on or after November 1, 2030. A portion of the proceeds from the 2025 Series C bonds were used to pay at closing a portion of the 2020 Series H bonds which had been tendered for purchase on April 17, 2025. The proceeds of the 2025 Series C bonds together with other monies were sufficient to pay accrued interest and tender price of maturities of a portion of the 2020 Series H bonds starting on November 1, 2025 to November 1, 2047.
The bonds carried “Aa2” and “AA-” ratings from Moody’s and S&P, respectively. The 2020 Series EFGH bonds include serial bonds and term bonds with interest rates varying from 0.3% to 3.1% and have a final maturity in 2047. The Series EFGH bonds have a true interest cost of 2.7%. The refunding resulted in the recognition of a deferred accounting loss of $27,010, gross debt service savings of $117,114, and an economic gain of $75,212 or 12.0% of refunded principal. As of June 30, 2025 and 2024, the principal amount of 2020 Series EFGH bonds outstanding was $373,825 and $446,450, respectively.
l) Water Revenue Bonds 2023 Series AB
In July 2023, the Water Enterprise issued tax -exempt revenue bonds, 2023 Series AB in the aggregate amount of $414,035. The purpose of the 2023 Series AB Bonds was to refund approximately $373,000 aggregate principal amount of commercial paper notes and to provide approximately $59,341 new money for various capital projects of the Water Enterprise, and capital projects of Hetch Hetchy Water. The bonds carried “Aa2” and “AA -” ratings from Moody’s and S&P, respectively. The 2023 Series AB bonds include serial and term bonds with coupons of
5.0% to 5.3% and final maturities in 2052.
The $349,495 2023 Series A bonds were issued as tax -exempt bonds to refund approximately $305,625 of commercial paper notes for Water Enterprise capital projects and to provide approximately $59,299 new money for various capital projects for the Water Enterprise. The Series A bonds were issued as serial and term bonds with coupons of 5.0% to 5.3% and a final maturity of 2052. The Series A bonds have a true interest cost of 4.1%. As of June 30, 2025 and 2024, the principal amount of 2023 Series A bonds outstanding was $349,495.
The $64,540 Series B bonds were issued as tax -exempt bonds to refund approximately $67,348 of commercial paper notes for Hetch Hetchy Water capital projects and approximately $42 in new money for Hetch Hetchy Water capital projects. The Series B bonds were issued as serial and term bonds with coupons of 5.0% to 5.3% and have a final maturity of 2052. The Series B bonds have a true interest cost of 4.1%. As of June 30, 2025 and 2024, the principal amount of 2023 Series B bonds outstanding was $64,540.
111 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
m) Water Revenue Refunding Bonds 2023 Series CD
In August 2023, the Water Enterprise issued tax -exempt revenue bonds, 2023 Series CD refunding bonds in the aggregate amount of $514,855. The 2023 Series C (WSIP, Green) bonds were issued for the purpose of paying the purchase price of a portion of the 2015 Series A revenue bonds maturing on or after November 1, 2028, a portion of the 2016 Series A revenue bonds maturing on or after November 1, 2031, a portion of the 2017 Series D revenue bonds maturing on or after November 1, 2031, a portion of the 2019 Series A (WSIP, Green) revenue bonds maturing on or after November 1, 2026, and a portion of the 2020 Series E (WSIP, Green) revenue bonds maturing on November 1, 2041 that were tendered for cash and advance refund portions of 2019 Series A maturing on or after November 1, 2024.
The 2023 Series D (Local Water) bonds were issued for the purpose of paying the purchase price of a portion of the 2020 Series G bonds maturing on or after November 1, 2026 that were tendered for cash and advance refund portions of 2020 Series G bonds maturing on or after November 1, 2024.
The bonds carried “Aa2” and “AA-” ratings from Moody’s and S&P, respectively. The 2023 Series CD bonds include serial bonds with interest rates of 4.0% to 5.0% and have a final maturity in 2043. The Series CD bonds have a true interest cost of 3.2%. The refunding resulted in the recognition of a deferred accounting gain of $33,378, gross debt service savings of approximately $85,376, and an economic gain of $58,518 or 9.5% of refunded principal. As of June 30, 2025 and 2024, the principal amount of 2023 Series CD bonds outstanding was $514,855.
n) Water Revenue Refunding Bonds 2025 Series ABC
In April 2025, the Water Enterprise issued tax -exempt revenue bonds, 2025 Series ABC refunding bonds in the aggregate amount of $523,435. The 2025 Series A (WSIP, Green) bonds were issued for the purpose of current refunding 2015 Series A revenue bonds maturing on or after November 1, 2029, 2017 Series A (WSIP, Green) bonds maturing on or after November 1, 2025, and for the purpose of paying the purchase price of a portion of the 2016 Series A revenue bonds maturing on November 1, 2029, a portion of the 2017 Series D revenue bonds maturing on or after November 1, 2030, a portion of the 2019 Series A revenue bonds maturing on or after November 1, 2025, and a portion of the 2020 Series E bonds maturing on or after November 1, 2025.
The 2025 Series B (Regional and Local) bonds were issued for the purpose of current refunding 2017 Series B (Regional and Local Water) bonds maturing on or after November 1, 2025 and for the purpose of paying the purchase price of a portion of the 2020 Series F bonds maturing on or after November 1, 2025, and a portion of the 2020 Series G bonds maturing on or after November 1, 2025.
The 2025 Series C (Hetch Hetchy Water) bonds were issued for the purpose of current refunding 2017 Series C (Hetch Hetchy Water) bonds maturing on or after November 1, 2025 and for the purpose of paying the purchase price of a portion of the 2020 Series H bonds maturing on or after November 1, 2025.
The bonds carried “Aa2” and “AA-” ratings from Moody’s and S&P, respectively. The 2025 Series ABC bonds include serial bonds with interest rates of 4.0% to 5.0% and have a final maturity in November 1, 2047. The Series ABC bonds have a true interest cost of 3.3%. The refunding resulted in a $19,815 accounting gain. As of June 30, 2025, the principal amount of 2025 Series ABC bonds outstanding was $523,435
112 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
o) Water Revenue Refunding Bonds 2025 Series DEF
In June 2025, the Water Enterprise issued tax-exempt revenue bonds and refunding bonds, 2025 Series DEF in the aggregate amount of $988,260. The purpose of the 2025 Series DE Bonds was to refund approximately $313,384 aggregate principal amount of commercial paper notes and to provide approximately $92,362 new money for various capital projects of the Water Enterprise and capital projects of Hetch Hetchy Water. The bonds carried “Aa2” and “AA -” ratings from Moody’s and S&P, respectively. The 2025 Series DE bonds include serial and term bonds with coupons of 5.0% to 5.3% and final maturities in 2055.
The purpose of the 2025 Series F bonds was to refund 2010 Series B and 2010 Series E Water Revenue Bonds originally issued as Build America Bonds through an extraordinary redemption provision at a prepayment price maturing on or after November 1, 2025. The bonds carried “Aa2” and “AA-” ratings from Moody’s and S&P, respectively. The 2025 Series F bonds included serial bonds with coupons of 5.0% and a final maturity of November 1, 2040. The Series F bonds have a true interest cost of 3.5%. As of June 30, 2025, the principal amount of 2025 Series DEF bonds outstanding was $988,260.
p) Future Annual Debt Service of Revenue Bonds
The following table presents the future annual debt service relating to the revenue and refunding bonds outstanding as of June 30, 202 5. The federal interest subsidy amounts represent 35.0%, excluding sequestration, of the interest for the revenue bond 2010 Series G revenue bond.
*The SFPUC received an IRS notice dated April 8, 2025 that the federal interest subsidies on the 2010 Series G bonds are reduced by 5.7%, or a total reduction of $8,519, due to sequestration over the remaining life of the bonds assuming the sequestration rate will remain the same after fiscal year 2025.
As defined in the Indentures, the principal and interest of the Water Enterprise’s revenue and refunding bonds are payable from its revenues, as well as monies deposited in certain funds and accounts pledged thereto (see Note 5).
Interest before Federal interest Interest net
Principal s ubsidy subsidy* of subsidy
Fiscal years ending June 30:
2026 $ 139,250 217,241 (8,062) 209,179
2027 148,245 215,299 (8,062) 207,237
2028 152,775 208,298 (8,062) 200,236
2029 166,885 200,688 (8,062) 192,626
2030 175,080 192,497 (8,062) 184,435
2031-2035 983,215 830,967 (38,198) 792,769
2036-2040 1,152,855 578,523 (30,857) 547,666
2041-2045 701,490 364,183 (21,502) 342,681
2046-2050 557,000 231,760 (9,778) 221,982
2051-2055 510,010 91,668 (299) 91,369
2056-2058 114,575 2,909 — 2,909
Total 4,801,380 3,134,033 (140,944) 2,993,089
Less: Current portion (139,250)
Less: Unamortized bond discount (595)
Add: Unamortized bond premiums 387,943
Long-term portion as of June 30, 2025 $ 5,049,478
113 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
q) Clean Water State Revolving Fund (CWSRF) Loan and Grant
In September 2017, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a Clean Water State Revolving Fund (CWSRF) Loan and Grant to fund the Water Enterprise’s SF Westside Recycled Water Project. The CWSRF loan is in the amount of $191,094, which includes $15,000 of principal forgiveness, or a grant. It will bear an interest rate of 1.0% for a 30- year term, with loan repayment beginning one year after substantial completion of project construction. The CWSRF loan is secured on a parity lien basis with the Water Enterprise’s outstanding revenue bonds. The principal outstanding as of June 30, 2025 and 2024 was $164,252 and $154,178, respectively.
r) Drinking Water State Revolving Fund (DWSRF) Loan
In April 2022, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a Drinking Water State Revolving Fund (DWSRF) Loan to fund the Water Enterprise’s Mountain Tunnel Improvement Project. The DWSRF loan is in the amount of $238,219. It will bear an interest rate of 1.1% for a 30-year term, with interest payments beginning annually after the initial loan proceed draw occurs and loan principal repayment beginning one year after substantial completion of project construction. Power Enterprise is responsible for repayment for its share of SRF Loan debt service costs representing up to its allocable share of the cost of the Mountain Tunnel Improvement Project by a Memorandum of Understanding that will be executed with the Water Enterprise. The DWSRF loan is secured on a parity lien basis with the Water Enterprise’s outstanding revenue bonds. The principal outstanding as of June 30, 2025 and 2024 was $135,783 and $105,792, respectively.
Principal Interest Total
Fiscal years ending June 30:
2026 $ — — —
2027 — — —
2028 4,722 1,643 6,365
2029 4,769 1,595 6,364
2030 4,817 1,548 6,365
2031-2035 24,816 7,005 31,821
2036-2040 26,082 5,740 31,822
2041-2045 27, 413 4,409 31,822
2046-2050 28,811 3,011 31,822
2051-2055 30,281 1,542 31,823
2056-2057 12,541 188 12,729
Total 164,252 26,681 190,933
Less: Current portion —
Long-term portion as of June 30, 2025 $ 164,252
Principal Interest Total
Fiscal years ending June 30:
2026 $ — — —
2027 — — —
2028 — — —
2029 3,
845 1,494 5,339
2030 3,887 1,451 5,338
2031-2035 20,087 6,606 26,693
2036-2040 21,216 5,476 26,692
2041-2045 22,409 4,284 26,693
2046-2050 23,669 3,024 26,693
2051-2055 25,000 1,693 26,693
2056-2058 15,670 345 16,015
Total 135,783 24,373 160,156
Less: Current portion —
Long-term portion as of June 30, 2025 $ 135,783
114 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
s) Proposition A
On November 5, 2002, the San Francisco voters passed Proposition A, which provides for the issuance of revenue bonds and/or other forms of indebtedness by the Commission in a principal amount not to exceed $1,628,000 to finance the acquisition and construction of improvements to the City’s Water System. As of June 30, 2025, there was no commercial paper outstanding pursuant to this authorization and $1,499,230 of bonds had been issued in fiscal years 2006, 2010, 2012, and 2021 against Prop A. The total authorization against Prop A was $1,499,230 as of June 30, 2025.
t) Proposition E
On November 5, 2002, the San Francisco voters passed Proposition E, which authorizes the Board of Supervisors’ approval of the issuance of revenue bonds and/or other forms of indebtedness by the Commission to finance costs for the Commission’s capital programs, including WSIP. As of June 30, 2025, the Board of Supervisors authorized the issuance of $6,157,510 in revenue bonds with $5,305,913 issued against this authorization; in September 2017 and amended in April 2023, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a Clean Water State Revolving Fund (CWSRF) Loan and Grant to fund the Water Enterprise’s SF Westside Recycled Water Project in the amount of $191,094 (which includes a $15,000 grant) and in April 2022, the SFPUC entered in to an Installment Sale Agreement with the State Water Resources Control Board for a Drinking Water State Revolving Fund (DWSRF) Loan to fund the Mountain Tunnel Improvement Project in the amount of $238,219. Additionally, $20,000 and $190,000 in commercial paper were outstanding pursuant to this authorization as of June 30, 2025 and 2024, respectively.
u) Events of Default and Remedies
Significant Events of default as specified in the Water Enterprise Indenture (applicable to Water Revenue Bonds, and SRF Loan) include 1) Non- payment 2) material breach of warranty, representation or indenture covenants (not cured within applicable grace periods) and 3) bankruptcy and insolvency events, which may result in the Trustee (upon written request by the majority of the owners (by aggregate amount of the bond obligations or of a credit provider), declaring the principal and the interest accrued thereon, to be due and payable immediately. As of June 30, 2025 and 2024, there were no such events describe herein.
v) Leases
The Water Enterprise has entered into long-term leases for land, office space, and communication site. The terms and conditions for these leases vary, which range between 1 – 75 years.
Future annual lease payments for fiscal years 2025 and 2026 are as follows:
Principal Interest Total
Fiscal years ending June 30:
2026 $ 966 55 1,021
2027 365 38 403
2028 249 31 280
2029 216 25 241
2030 158 20 178
2031-2035 426 68 494
2036-2040 397 20 417
Total 2,777 257 3,034
Less: Current portion (966)
Long-term portion as of June 30, 2025 $ 1,811
115 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Variable lease payments
Variable lease payments, other than those payments that depend on an index or rate or are fixed in substance, are excluded from the measurement of the lease liability. Such amounts are recognized as lease expenses in the period in which the obligation for those payments is incurred.
Certain facility rental leases require the Water Enterprise to make variable lease payments that based on usage, related to the property taxes levied on the lessor, and insurance payments made by the lessor; these amounts are generally determined annually. The amounts recognized as expense for variable lease payments not included in the measurement of the lease liability were $90 and $79 during the year ended June 30, 2025 and 2024, respectively.
w) Subscription-Based Information Technology Arrangements (SBITAs)
The Water Enterprise has noncancellable subscription arrangements (similar to a lease) for the right to use various information technology hardware and software (SBITAs). The terms and conditions for these subscriptions varies, which ranges between 1 – 5 years.
Future annual subscription as of June 30, 2025 and 2024 are as follows:
Principal Interest Total
Fiscal years ending June 30:
2025 $ 1,028 55 1,083
2026 546 32 578
2027 135 26 161
2028 122 23 145
2029 85 21 106
2030-2034 418 77 495
2035-2039 436 29 465
2040-2044 51 1 52
Total 2,821 264 3,085
Less: Current portion (1,028)
Long-term portion as of June 30, 2024 $ 1,793
Principal Interest Total
Fiscal years ending June 30:
2026 $ 846 22 868
2027 159 5 164
Total 1,005 27 1,032
Less: Current portion (846)
Long-term portion as of June 30, 2025 $ 159
Principal Interest Total
Fiscal years ending June 30:
2025 $ 153 4 157
2026 155 2 157
Total 308 6 314
Les
s: Current portion (153)
Long-term portion as of June 30, 2024 $ 155
116 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Long-Term Liability activities for the years ended June 30, 2025 and 2024 are as follows:
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year.
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year. ~As of June 30, 2024, the Wastewater Enterprise had $341,373 in outstanding commercial paper which were repaid by 2024 Series CD Wastewater Revenue Bonds in July 2024. The $341,373 has been reclassified to long-term liabilities on the financial statements.
Interest Maturity R estated Due within
rate (Calendar Year) 2024* A dditions Reductions 2025 one year Revenue bonds:
2010 Series B (Build America) 4. 65 – 5.82 % 2040 $ 177,730 — (7,745) 169,985 8,000 2013 Series B 4.00 – 5.00 2042 93,095 — — 93,095 —
2016 Series A 4.00 – 5.00 2046 235,105 — (5,760) 229,345 6,055 2016 Series B 4.00 – 5.00 2046 66,275 — (1,625) 64,650 1,705 2018 Series A 4.00 – 5.00 2043 214,175 — (6,580) 207,595 6,915 2018 Series B 5.00 2043 173,880 — (11,690) 162,190 5,610 2021 Series A 4.00 – 5.00 2051 260,835 — — 260,835 — 2021 Series B 5.00 2051 37,045 — — 37,045 —
2022 Series B 5.00 2034 137,080 — (8,325) 128,755 10,175 2023 Series A 5.00 – 5.25 2042 530,565 — — 530,565 — 2023 Series B 4.00 – 5.00 2042 278,155 — (75,050) 203,105 — 2023 Series C 4.00 2048 165,660 — — 165,660 —
2024 Series A 4.65 2027 — 431,110 — 431,110 —
2024 Series B 4.65 2037 — 87,250 — 87,250 —
2024 Series C 5.00 2054 — 539,720 — 539,720 —
2024 Series D 5.00 2054 — 84,895 — 84,895 —
For issuance premiums 315,451 74,996 (37,401) 353,046 — Total revenue bonds and notes payable 2,685,051 1,217,971 (154,176) 3,748,846 38,460 2009 Series D COPs (Build America) 6.36 – 6.49 2041 23,595 — (900) 22,695 937 State Revolving Fund Loans (CWSRF) 0.80 – 1.80 2056 317,662 54,573 (5,629) 366,606 6,419 Water Infrastructure Finance and Innovation Act Loans (WIFIA) 1.45 – 3.65 2062 922,431 472,221 — 1,394,652 — Commercial Papers 3.57 – 3.75 341,373 648 (342,021) — — Bond, loan, lease, and subscription interest payable 32,406 165,565 (151,899) 46,072 42,174 Arbitrage rebate payable 8,521 — (3,977) 4,544 290
Net other postemployment benefits liability 49,260 1,292 — 50,552 — Net pension liability 67,299 7,040 — 74,339 —
Accrued compensated absences # 25,892 1,365 — 27,257 14,531 Accrued workers’ compensation 9,012 1, 886 (1,997) 8,901 1,602 Due to other City departments 405 — (114) 291 115
Lease liability — 5,488 — 5,488 1,766
Subscription liability 186 411 — 597 503
Damage claims liability 115,083 4,968 (40,950) 79,101 15,885 Pollution remediation obligations 6,451 — (328) 6,123 — Total $ 4,604,627 1,933,428 (701,991) 5,836,064 122,682 Interest Maturity R estated Due within
rate (Calendar Year) 2023 A dditions Reductions 2024* one year Revenue bonds:
2010 Series B (Build America) 4. 65 – 5.82 % 2040 $ 185,235 — (7,505) 177,730 7,745 2013 Series A 1.00 – 5.00 2025 575 — (575) — —
2013 Series B 4.00 – 5.00 2042 93,095 — — 93,095 —
2016 Series A 4.00 – 5.00 2046 240,580 — (5,475) 235,105 5,760 2016 Series B 4.00 – 5.00 2046 67,820 — (1,545) 66,275 1,625 2018 Series A 4.00 – 5.00 2043 221,335 — (7,160) 214,175 6,580 2018 Series B 5.00 2043 179,690 — (5,810) 173,880 5,335 2021 Series A 4.00 – 5.00 2051 260,835 — — 260,835 — 2021 Series B 5.00 2051 37,045 — — 37,045 —
2022 Series B 5.00 2034 137,080 — — 137,080 8,325
2023 Series A 5.00 – 5.25 2042 530,565 — — 530,565 — 2023 Series B 4.00 – 5.00 2042 278,155 — — 278,155 — 2023 Series C 4.00 2048 165,660 — — 165,660 —
For issuance premiums 339,240 — (23,789) 315,451 —
Revenue Notes: —
2021 Series A - Biosolids 1.00 2025 218,355 — (218,355) — — 2021 Series B - SEP Headworks 1.00 2026 129,110 — (129,110) — — For issuance premiums 2,091 — (2,091) — —
Total revenue bonds and notes payable 3,086,466 — (401,415) 2,685,051 35,370 2009 Series D COPs (Build America) 6.36 – 6.49 2041 24,458 — (863) 23,595 900 State Revolving Fund Loans (CWSRF) 0.80 – 1.80 2056 318,689 1,498 (2,525) 317,662 5,629 Water Infrastructure Finance and Innovation Act Loans (WIFIA) 1.45 2062 122,357 800,074 — 922,431 — Commercial Papers~ 3.15 – 3.74 2024 — 341,373 — 341,373 — Bond, loan, lease, and subscription interest payable — 32,406 — 32,406 30,300 Arbitrage rebate payable 188 8,333 — 8,521 —
Net other postemployment benefits liability 49,035 225 — 49,260 — Net pension liability 49,549 17,750 — 67,299 —
Accrued compensated absences # 11,662 14,230 — 25,892 13,705 Accrued workers’ compensation 7,998 2, 680 (1,666) 9,012 1,602 Due to other City departments 2,620 — (2,215) 405 114 Lease liability 1,297 — (1,297) — —
Subscription liability 429 — (243) 186 93
Damage claims liability 4,350 112,467 (1,734) 115,083 28,742 Pollution remediation obligations 7,800 — (1,349) 6,451 — Total $ 3,686,898 1,331,036 (413,307) 4,604,627 116,455 117 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The payments of principal and interest amounts on various bonds are secured by net revenues of the Wastewater Enterprise.
a) Wastewater Revenue Bonds 2010 Series B
During fiscal year 2010, the Wastewater Enterprise issued revenue bonds 2010 Series B (Federally Taxable – Build America Bonds – Direct Payment) in the amount of $192,515 with interest rates ranging from 4.7% to 5.8%. Proceeds from the bonds were used to redeem $53,500 in outstanding commercial paper notes, provide funding for capital projects in the amount of $112,429, fund a cash debt service reserve fund, and pay financing costs for the bonds. The bonds were rated “Aa3” and “AA -” by Moody’s and S&P, respectively, at the time of issuance.
Bonds mature through October 1, 2040. The true interest cost is 3.7%. As of June 30, 2025 and 2024, the 2010 Series B bonds’ principal amount outstanding was $169,985 and $177,730, respectively.
b) Wastewater Revenue Bonds 2013 Series A
In January 2013, the Wastewater Enterprise issued tax- exempt revenue bonds 2013 Series A in the amount of $193,400 for the purpose of refunding the remaining portion of the outstanding 2003 Series A bonds maturing on and after October 1, 2013. The bonds carried “Aa3” and “AA -” ratings from Moody’s and S&P, respectively, at the time of issuance. The 2013 Series A refunding bonds include serial bonds with interest rates varying from 1.0% to 5.0% and have a final maturity in October 2025. The Series A bonds had a true interest cost of 1.2% at issuance. The 2013 Series A bonds also refunded the remaining portion of the outstanding state revolving fund loans.
The refunding resulted in the recognition of a deferred accounting loss of $2,986, gross debt service savings of $35,107 over the next 13 years, and an economic gain of $32,783 or 15.4% of the refunded principal.
A portion of the proceeds of the 2022 Series B refunding bonds was deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreements, dated July 1, 2022 to refund and legally defease a portion of the outstanding 2013 Series A bonds. This deposit, together with certain other available monies was held by the escrow agent under the Escrow Agreement and invested in non-callable Federal Securities. As of June 30, 2025 and 2024, the principal amount outstanding of the 2013 Series A bonds was $0.
c) Wastewater Revenue Bonds 2013 Series B
In February 2013, the Wastewater Enterprise issued revenue bonds 2013 Series B in the amount of $331,585 with interest rates ranging from 4.0% to 5.0%. Proceeds from the bonds were used for Wastewater capital projects, pay off all outstanding Wastewater commercial paper notes, and pay the costs of issuing the bonds. The bonds were rated “Aa3” and “AA -” by Moody’s and S&P, respectively, at the time of issuance. Bonds mature through October 1, 2042. The true interest cost was 3.6% at issuance.
A portion of the proceeds of the 2022 Series B and 2023 Series B refunding bonds was deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreements, date July 1, 2022 and April 1, 2023, respectively to refund and legally defease a portion of the outstanding 2013 Series B bonds. This deposit, together with certain other available monies was held by the escrow agent under the Escrow Agreement and invested in non- callable Federal Securities. The 2013 Series B bonds were defeased by the 2022 Series B and 2023 Series B bonds for $147,920 and $90,570, respectively. The remaining bonds mature through October 1, 2042. As of June 30, 2025 and 2024, the principal amount outstanding of the 2013 Series B bonds was $93,095.
118 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
d) Wastewater Revenue Bonds 2016 Series A
In May 2016, the Wastewater Enterprise issued tax-exempt revenue bonds 2016 Series A (Green Bonds) in the amount of $240,580 with interest rates ranging from 4.0% to 5.0%. Proceeds from the bonds were used for Wastewater capital projects, to pay off $53,439 of outstanding commercial paper notes, to fund capitalized interest, and pay the costs of issuing the bonds. The bonds carried ratings of “AA” and “Aa3” from S&P and Moody’s, respectively, at the time of issuance. Bonds mature through October 1, 2046. The bonds have a true interest cost of 3.2%.
As of June 30, 2025 and 2024, the principal amount outstanding of the 2016 Series A bonds was $229,345 and $235,105, respectively.
e) Wastewater Revenue Bonds 2016 Series B
In May 2016, the Wastewater Enterprise issued tax -exempt revenue bonds 2016 Series B in the amount of $67,820 with interest rates ranging from 4.0% to 5.0%. Proceeds from the bonds were used for Wastewater capital projects, to pay off $20,560 of outstanding commercial paper notes, to fund capitalized interest, and pay the costs of issuing the bonds. The bonds carried ratings of “AA” and “Aa3” from S&P and Moody’s, respectively, at the time of issuance. Bonds mature through October 1, 2046. The bonds have a true interest cost of 3.2%. As of June 30, 2025 and 2024, the principal amount outstanding of the 2016 Series B bonds was $64,650 and $66,275, respectively.
f) Wastewater Revenue Bonds 2018 Series A
In August 2018, the Wastewater Enterprise issued tax -exempt revenue bonds 2018 Series A (SSIP) (Green Bonds) in the amount of $229,050 with interest rates ranging from 4.0% to 5.0%.
Proceeds from the bonds were used for Wastewater capital projects in furtherance of the SFPUC’s Sewer System Improvement Program (“SSIP”), to pay off $25,000 of outstanding commercial paper notes, to fund capitalized interest, and to pay the costs of issuing the bonds.
The bonds carried ratings of “AA” and “Aa3” from S&P and Moody’s, respectively, at the time of issuance. Bonds mature through October 1, 2043. The bonds have a true interest cost of 3.4%.
As of June 30, 2025 and 2024, the principal amount outstanding of the 2018 Series A bonds was $207,595 and $214,175, respectively.
g) Wastewater Revenue Bonds 2018 Series B
In August 2018, the Wastewater Enterprise issued tax -exempt revenue bonds 2018 Series B (Non-SSIP) in the amount of $185,950 with 5.0% interest rate. Proceeds from the bonds were used for Wastewater capital projects, to fund capitalized interest, and pay the costs of issuing the bonds. The bonds carried ratings of “AA” and “Aa3” from S&P and Moody’s, respectively, at the time of issuance. Bonds mature through October 1, 2043. The bonds have a true interest cost of
3.5%. A portion of the proceeds of the 2024 Series B Bonds were deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreement, dated July 1, 2024, to refund and legally defease a portion of the outstanding 2018 Series B bonds. This deposit was held by the escrow agent under the Escrow Agreement and invested in non- callable federal securities.
The principal and interest on monies held by the escrow agent will be sufficient to redeem the maturities of the 2018 Series B bonds starting on October 1, 2026 and thereafter. As of June 30, 2025 and 2024, the principal amount outstanding of the 2018 Series B bonds was $162,190 and $173,880, respectively.
h) Wastewater Revenue Bonds 2021 Series AB
In November 2021, the Wastewater Enterprise issued tax -exempt revenue bonds, 2021 Series AB in the aggregate amount of $297,880. The purpose of the 2021 Series AB Bonds was to refund approximately $340,000 aggregate principal amount of commercial paper notes which funded various capital projects of the Wastewater Enterprise. The bonds carried “Aa2” and “AA” ratings from Moody’s and S&P, respectively.
119 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The $260,835 2021 Series A Bonds were issued as tax -exempt Green Bonds to refund approximately $296,000 of commercial paper notes for SSIP capital projects. The Series A bonds were issued as serial bonds with coupons of 4.0% and 5.0% and a final maturity of 2051. The 2021 Series A bonds have a true interest cost of 3.0%. As of June 30, 2025 and 2024, the principal amount of the 2021 Series A bonds outstanding was $260,835.
The $37,045 2021 Series B bonds were issued as tax -exempt bonds to refund approximately $44,000 of commercial paper notes for Wastewater capital projects. The Series B bonds were issued as serial bonds with coupons of 5.0% and have a final maturity of 2051. The Series B bonds have a true interest cost of 3.2%. As of June 30, 2025 and 2024, the principal amount of the 2021 Series B bonds outstanding was $37,045.
i) Wastewater Revenue Notes 2021 Series AB
In November 2021, the Wastewater Enterprise issued tax -exempt revenue (Green) notes, 2021 Sub-Series A and Sub- Series B together with an aggregate principal of $347,465 to finance a portion of the design, acquisition and construction of the Biosolids Digester Facility Project and Southeast Water Pollution Control Plant improvements. The SFPUC intends to pay principal of the 2021A Notes and 2021B Notes from the proceeds of one or more draws under WIFIA Loan Agreements for the Biosolids Digester Facility Project and Southeast Treatment Plant Improvements, respectively, or from the proceeds of future obligations.
The $218,355 2021 Series A Notes were issued as tax -exempt Green Notes to fund a portion of the Biosolids Digester Facilities Project. The Series A Notes were issued with 1.0% coupons and a final maturity of 2025. The 2021 Series A Notes have a true interest cost of 0.8%. As of June 30, 2025 and 2024, the principal amount of 2021 Series A Notes outstanding was $0.
The $129,110 2021 Series B Notes were issued as tax -exempt Green Notes to fund a portion of Southeast Water Pollution Control Plant improvements. The Series B Notes were issued with
1.0% coupons and a final maturity of 2026. The 2021 Series B Notes have a true interest cost of
0.8%. As of June 30, 2025 and 2024, the principal amount of 2021 Series B Notes outstanding was $0.
In March 2024, the Wastewater Enterprise deposited a portion of WIFIA disbursements with the trustee, acting as escrow agent under the irrevocable Escrow Agreements, dated March 1, 2024 to refund and legally defease the outstanding 2021 Series A Notes and 2021 Series B Notes. This deposit, together with certain other available monies was held by the escrow agent under the Escrow Agreement and invested in non -callable Federal Securities. The principal and interest on monies held by the escrow agent were sufficient to redeem 2021 Series A Notes and 2021 Series B Notes with maturities October 1, 2025 and October 1, 2026, respectively. The defeased principal amount outstanding for 2021 Series A Notes and 2021 Series B Notes were $218,355 and $129,110, respectively, as of June 30, 2025. The refunding resulted in the recognition of an accounting gain in an aggregate amount of $22,212.
j) Wastewater Revenue Refunding Bonds 2022 Series B
In July 2022, the Wastewater Enterprise issued tax -exempt revenue bonds, 2022 Series B in the aggregate principal amount of $137,080 on a forward delivery basis. The 2022 Series B bonds were issued for the purpose of refunding a portion of the outstanding 2013 Series A bonds maturing on October 1, 2024 and October 1, 2025 and a portion of the outstanding 2013 Series B bonds maturing on October 1, 2024 through October 1, 2034. The 2013 Series A bonds were defeased by 2022 Series B bonds for $1,870 in July 2022. The bonds carried “Aa2” and “AA” ratings from Moody’s and S&P, respectively.
The 2022 Series B bonds include serial bonds, each with an interest rate of 5% and have a final maturity in 2034. The Series B bonds have a true interest cost of 3.2%. The refunding resulted in the recognition of a deferred accounting gain of $6,868, gross debt service savings of $12,446, 120 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
and an economic gain of $12,012 or 8.0% of refunded bonds. As of June 30, 2025 and 2024, the principal amount of the 2022 Series B bonds outstanding was $128,755 and $137,080, respectively.
k) Wastewater Revenue Refunding Bonds 2023 Series ABC
In April 2023, the Wastewater Enterprise issued tax -exempt revenue bonds, 2023 Series ABC in the aggregate principal amount of $974,380. The purpose of the 2023 Series ABC bonds was to refund approximately $557,845 aggregate principal amount of commercial paper notes, finance various capital projects of the Wastewater Enterprise, and refund certain outstanding revenue bonds. The bonds carried “Aa2” and “AA” ratings from Moody’s and S&P, respectively.
The $530,565 2023 Series A bonds were issued as tax -exempt Green Bonds to refund approximately $400,900 of commercial paper notes for SSIP capital projects and finance certain capital projects benefitting the Enterprise. The Series A bonds were issued as serial bonds with coupons of 5.0% and 5.3% and a final maturity of 2042. The 2023 Series A bonds have a true interest cost of 2.9%. As of June 30, 2025 and 2024, the principal amount of the 2023 Series A bonds outstanding was $530,565.
The $278,155 2023 Series B bonds were issued as tax -exempt bonds to refund a portion of the outstanding 2013 Series B bonds maturing on October 1 2035 through October 1, 2039, refund approximately $156,900 of commercial paper notes for certain capital projects benefitting the Enterprise and finance certain capital projects benefitting the Enterprise. The Series B bonds were issued as serial bonds with coupons of 4.0% and 5.0% and a final maturity of 2042. The Series B bonds have a true interest cost of 3.0%. The refunding resulted in the recognition of a deferred accounting gain of $5,316, gross debt service savings of $10,626, and an economic gain of $7,647 or 8.4% of refunded bonds. A portion of the proceeds of the 2024 Series B Bonds were deposited with the trustee, acting as escrow agent under the irrevocable Escrow Agreement, dated July 1, 2024, to refund and legally defease a portion of the outstanding 2023 Series B bonds. This deposit was held by the escrow agent under the Escrow Agreement and invested in non-callable federal securities. The principal and interest on monies held by the escrow agent will be sufficient to redeem the maturities of the 2023 Series B bonds starting on October 1, 2026 and thereafter. As of June 30, 2025 and 2024, the principal amount of the 2023 Series B bonds outstanding was $203,105 and $278,155, respectively.
The $165,660 2023 Series C bonds were issued as tax -exempt Green Bonds to refund all of the outstanding 2018 Series C bonds. The Series C bonds were issued as serial bonds with a coupon of 4.0% and a final maturity of 2048. The 2023 Series C bonds have a true interest cost of 3.5%.
The refunding resulted in the recognition of a deferred accounting gain of $963, gross debt service savings of $24,606, and an economic gain of $15,785 or 8.8% of refunded bonds. As of June 30, 2025 and 2024, the principal amount of the 2023 Series C bonds outstanding was $165,660.
l) Wastewater Revenue Refunding Bonds 2024 Series ABCD
In July 2024, the Wastewater Enterprise issued taxable and tax -exempt, 2024 Series ABCD, in the total aggregate principal amount of $1,142,975. The purpose of the 2024 Series ABCD bonds were issued to retire approximately $342,021 aggregate principal amount of commercial paper notes, finance various capital projects of the enterprise, and refund certain outstanding revenue bonds.
The $431,110 2024 Series A Bonds were issued as taxable Green Bonds for the Sewer System Improvement Program (SSIP) to fund the Biosolids Digester Facility Project. The Series A were issued with a coupon rate of 4.7% and have a single maturity of 2027.The Series A have a true interest cost of 4.7%. The bonds carried a Aa2 rating from Moody’s. As of June 30, 2025, the principal amount of the 2024 Series A bonds outstanding was $431,100.
121 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The $87,250 2024 Series B bonds were issued as taxable bonds for non- SSIP projects. The bonds were issued to defease a portion of the outstanding 2018 Series B bonds maturing on October 1, 2026 through October 1, 2043, and a portion of outstanding 2023 Series B bonds maturing October 1, 2026. The 2024 Series B bonds were issued as serial bonds with coupons of 4.6% to 5.1% and have a final maturity of 2037. The Series B bonds have a true interest cost of 5.0% The refunding resulted in the recognition of a deferred accounting gain/loss of $8,135 of refunded bonds. The Series B bonds carried of “AA” and “Aa2” ratings from S&P and Moody’s, respectively. As of June 30, 2025, the principal amount of the 2024 Series B bonds outstanding was $87,250.
The $539,720 2024 Series C bonds were issued as tax -exempt Green Bonds to retire approximately $270,189 of commercial paper notes for SSIP capital projects and finance certain capital projects benefitting the Enterprise. The Series C bonds were issued as serial bonds and term bonds with coupons of 5.0% and final maturity of 2054. The Series C bonds have a true interest cost of 4.2%. The bonds carried of “AA” and “Aa2” ratings from S&P and Moody’s, respectively. As of June 30, 2025, the principal amount of the 2024 Series C bonds outstanding was $539,720.
The $84,895 2024 Series D bonds were issued as tax -exempt bonds to retire approximately $71,832 of commercial paper for non-SSIP projects and to finance certain capital project benefiting the Enterprise. The Series D were issued as serial bonds and term bonds with 5.0% coupons and a final maturity of 2054. The 2024 Series D bonds have a true interest cost of 4.2%. The bonds carried “Aa2” and “AA” ratings from Moody’s and S&P, respectively. As of June 30, 2025, the principal amount of the 2024 Series D bonds outstanding was $84,895.
m) Future Annual Debt Service of Revenue and Refunding Bonds
The following table presents the future annual debt service relating to the revenue and refunding bonds outstanding as of June 30, 2025. The interest before subsidy amounts includes the interest for 2010 Series B, 2013 Series B, 2016 Series A and B, 2018 Series A and B, 2021 Series A and B bonds, 2022 Series B, 2023 Series A, B, and C bonds, and 2024 Series A, B, C, and D bonds.
The federal interest subsidy amounts represent 35.0% of the interest, excluding sequestration, for the 2010 Series B revenue bonds.
*The SFPUC received IRS notice dated April 8, 2025 that the federal interest subsidy on the 2010 Series B bonds is reduced by
5.7% through fiscal year 2030, or a total reduction of $1,715, due to sequestration over the remaining life of the bonds assuming the sequestration rate will remain the same after FY2025.
As defined in the Indenture, the principal and interest of the Wastewater Enterprise’s refunding bonds are payable from its corresponding revenue as well as monies deposited in certain funds and accounts pledged thereto (see Note 5).
n) Lake Merced Green Infrastructure Project - CWSRF Loan
In January 2016, then amended in May 2016, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a Clean Water State Revolving Fund (“CWSRF”) Loan to fund the Lake Merced Green Infrastructure Project of the Sewer Interest before Federal interest Interest net
P
rincipal subsidy subsidy* of subsidy
Fiscal years ending June 30:
2026 $ 38,460 161,374 (3,105) 158,269
2027 59,895 158,944 (2,968) 155,976
2028 528,685 144,966 (2,822) 142,144
2029 112,720 129,667 (2,668) 126,999
2030 118,370 123,857 (2,506) 121,351
2031-2035 592,025 529,328 (9,771) 519,557
2036-2040 565,485 384,154 (4,393) 379,761
2041-2045 560,520 248,782 (133) 248,649
2046-2050 456,425 135,701 — 135,701
2051-2055 363,215 41,859 — 41,859
Total 3,395,800 2,058,632 (28,366) 2,030,266
Less: Current portion (38,460)
Add: Unamortized bond premiums 353,046
Long-term portion as of June 30, 2025$ 3,710,386
122 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
System Improvement Program. The aggregate amount of the CWSRF loans is $7,435. The loan bears an interest rate of 1.6% which was equal to one-half of the State of California’s most recent 30-year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30- year term, with loan repayment beginning one year after substantial completion of each project’s construction; completion was in October 2020. The CWSRF loan is secured on a parity lien basis with the Wastewater Enterprise’s outstanding revenue bonds. The SFPUC has received loan disbursements to date totaling $6,116 and a construction period interest of $166 transferred to principal. As of June 30, 2025 and 2024, the principal amount outstanding of the loan was $5,602 and $5,775, respectively.
o) Southeast Plant (SEP) 521/522 and Disinfection Upgrade Project - CWSRF Loan
In September 2017, then amended in December 2017 and May 2018, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a CWSRF Loan to fund the SEP 521/522 and Disinfection Upgrade Project of the Sewer System Improvement Program. The aggregate amount of the CWSRF loans is $40,007. The loan bears an interest rate of 1.8% which was equal to one -half of the State of California’s most recent 30- year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30- year term, with loan repayment beginning one year after substantial completion of each project’s construction; substantial completion occurred in July 2019. The CWSRF loan is secured on a parity lien basis with the Enterprise’s outstanding revenue bonds. The SFPUC has received proceeds from loan disbursements to date totaling $39,741. As of June 30, 2025 and 2024, the principal amount outstanding of the loan was $34,272 and $35,350, respectively.
p) North Point Facility Outfall Rehabilitation Project CWSRF Loan
In September 2017, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a CWSRF Loan to fund the North Point Facility Outfall Rehabilitation Project of the Sewer System Improvement Program. The aggregate amount of the CWSRF loans is $20,199. The loan bears an interest rate of 1.8% which was equal to one- half of the State of California’s most recent 30- year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30 -year term, with loan repayment beginning one year after substantial completion of each project’s construction; substantial completion occurred in February 2018. The CWSRF loans is secured on a parity lien basis with the Enterprise’s outstanding revenue bonds. The SFPUC has received proceeds from loan disbursements to date totaling $17,706. As of June 30, 2025 and 2024, the principal amount outstanding of the loan was $14,247 and $14,744, respectively.
q) Southeast Plant (SEP) Primary/Secondary Clarifier Upgrade Project - CWSRF Loan
In September 2017, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a CWSRF Loan to fund the SEP Primary/Secondary Clarifier Upgrade Project of the Sewer System Improvement Program. The aggregate amount of the CWSRF loans is $34,446. The loan bears an interest rate of 0.8% which was equal to one- half of the State of California’s most recent 30- year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30 -year term, with loan repayment beginning one year after substantial completion of each project’s construction; substantial completion occurred in June 2018. The CWSRF loan is secured on a parity lien basis with the Wastewater Enterprise’s outstanding revenue bonds. The SFPUC has received proceeds from loan disbursements to date totaling $29,197. As of June 30, 2025 and 2024, the principal amount outstanding of the loan was $23,622 and $24,445, respectively.
r) Oceanside Plant (OSP) Digester Gas Utilization Upgrade Project CWSRF Loan
In May 2020, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a CWSRF Loan to fund the OSP Digester Gas Utilization Upgrade Project of the Sewer System Improvement Program. The CWSRF loan is in the amount of 123 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
$54,388, which includes $4,000 of principal forgiveness, or a grant. The loan bears an interest rate of 1.4% which was equal to one -half of the State of California’s most recent 30- year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30- year term, with loan repayment beginning one year after substantial completion of each project’s construction. The CWSRF loan is secured on a parity lien basis with the Wastewater Enterprise’s outstanding revenue bonds. The SFPUC has received proceeds from loan disbursements to date totaling $45,103, which included a loan forgiveness grant of $4,000 and a receivable for reimbursement of $9,285. As of June 30, 2025 and 2024, the principal amount outstanding of the loan including capitalized interest was $50,411 and $30,067, respectively.
s) Southeast Plant (SEP) Biosolids Digester Facilities Project - CWSRF Loan and Grant
In May 2020, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a CWSRF Loan to fund the SEP Biosolids Digester Facilities Project of the Sewer System Improvement Program. The CWSRF loan is in the amount of $132,000, which includes $4,000 of principal forgiveness, or a grant. The loan bears an interest rate of 1.4% which was equal to one- half of the State of California’s most recent 30- year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30- year term, with loan repayment beginning one year after substantial completion of each project’s construction; substantial completion is expected in May 2026. The CWSRF loan is secured on a parity lien basis with the Wastewater Enterprise’s outstanding revenue bonds. The SFPUC has received proceeds from loan disbursements to date totaling $132,000, which includes a $4,000 loan forgiveness grant. As of June 30, 2025 and 2024, the principal amount outstanding of the loan was $128,000.
t) Southeast Plant (SEP) New Headworks (Grit) Replacement Project - CWSRF Loan
In May 2021, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a CWSRF Loan to fund the SEP New Headworks (Grit) Replacement Project of the Sewer System Improvement Program. The CWSRF loan is in the amount of $112,036. The loan bears an interest rate of 1.1% which was equal to one -half of the State of California’s most recent 30- year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30- year term, with loan repayment beginning one year after substantial completion of each project’s construction; substantial completion is expected in August 2027. The CWSRF loan is secured on a parity lien basis with the Wastewater Enterprise’s outstanding revenue bonds. The SFPUC has received proceeds from loan disbursements to date totaling $91,020 and a receivable for reimbursement of $21,016.
As of June 30, 2025 and 2024, the principal amount outstanding of the loan including capitalized interest was $110,452 and $79,281, respectively.
u) New Treasure Island Wastewater Treatment Plant
In June 2025, the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a CWSRF Loan to fund the New Treasure Island Wastewater Treatment Plant. The CWSRF loan is in the amount of $110,000. The loan bears an interest rate of 1.7% which was equal to one- half of the State of California’s most recent 30- year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30-year term, with loan repayment beginning one year after substantial completion of each project’s construction; substantial completion is expected in February 2027. The CWSRF loan is secured on a parity lien basis with the Wastewater Enterprise’s outstanding revenue bonds. As of June 30, 2025 the Enterprise has not submitted any reimbursement requests to date and the principal amount outstanding of the loan was $0.
124 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
v) Folsom Area Stormwater Improvement Project
In June 2025 the SFPUC entered into an Installment Sale Agreement with the State Water Resources Control Board for a CWSRF Loan to fund the Folsom Area Stormwater Improvement Project. The CWSRF loan is in the amount of $50,000. The loan bears an interest rate of 1.8% which was equal to one- half of the State of California’s most recent 30- year General Obligation Bond true interest cost at the time the agreement was executed. The CWSRF loan will have a 30-year term, with loan repayment beginning one year after substantial completion of each project’s construction; substantial completion is expected in September 2028. The CWSRF loan is secured on a parity lien basis with the Wastewater Enterprise’s outstanding revenue bonds. As of June 30, 2025 the Enterprise has not submitted any reimbursement requests to date and the principal amount outstanding of the loan was $0.
w) Future Annual Debt Service of State Revolving Fund Loans (CWSRF Loans)
The future annual debt service relating to the SRF Loans to fund the Lake Merced Green Infrastructure Project, the North Point Facility Outfall Rehabilitation Project, the SEP Primary/Secondary Clarifier Upgrade Project, the SEP 521/522 and Disinfection Upgrade Project, the OSP Digester Gas Utilization Upgrade Project, the SEP Biosolids Digester Facilities Project, and the SEP New Headworks (Grit) Replacement Project outstanding as of June 30, 2025 is as follows:
*Interest and Fees included debt administrative fees for the North Point Facility and SEP Clarifier Upgrade SRF loans.
x) Biosolids Digester Facility Project Water Infrastructure Finance Innovation Act Loan Agreement (WIFIA)
In July 2018, the SFPUC entered into a WIFIA Loan Agreement with the United States Environmental Protection Agency (EPA) in the amount of $699,242. The WIFIA Loan was entered into pursuant to the WIFIA statute authorized by Congress in 2014. The WIFIA Loan will fund 49% of the costs of the Wastewater Enterprise’s Biosolids Digester Facility Project plus certain eligible expenses. Payment of the WIFIA Loan will be secured by a senior lien pledge of the Wastewater Enterprise’s net revenues and is on a parity lien basis with the SFPUC’s outstanding Wastewater Revenue Bonds and Clean Water SRF Loans entered into with the California State Water Resources Control Board.
The original 2018 loan bore a fixed interest rate of 3.09% for a 35- year term, with loan repayment expected to begin in fiscal year 2026, after substantial completion of project construction. In June 2020 the SFPUC re- executed the WIFIA Loan Agreement to have a fixed interest rate of 1.45% for a 35-year term. All other terms of WIFIA Loan Agreement are unchanged.
Principal Total
Fiscal years ending June 30:
2026 $ 6,419 3,172 9,591
2027 10,884 5,009 15,893
2028 11,036 4,856 15,892
2029 11,191 4,701 15,892
2030 11,348 4,544 15,892
2031-2035 59,182 20,281 79,463
2036-2040 63,469 15,994 79,463
2041-2045 68,077 11,385 79,462
2046-2050 68,944 6,467 75,411
2051-2055 50,874 2,195 53,069
2056 5,182 73 5,255
Total 366,606 78,677 445,283
Less: Current portion (6,419)
Long-term portion as of June 30, 2025 $ 360,187
Interest
and Fees*
125 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
In March of 2023, the SFPUC received disbursement of $122,283 in respect to eligible project costs and a capitalized interest of $74 added to principal. In January of 2024, the SFPUC received a second disbursement of $439,995 in respect to eligible project costs. In February 2025, the SFPUC received a final disbursement of $136,964. As of June 30, 2025 and 2024, the principal amount outstanding of the loan including capitalized interest was $713,314 and $567,511, respectively.
y) Southeast Treatment Plant Improvements Project - WIFIA Loan
In June 2020, another WIFIA Loan agreement with the United States Environmental Protection Agency in the amount of $513,862 was executed. The WIFIA Loan was entered into pursuant to the WIFIA statute authorized by Congress in 2014. The WIFIA Loan will fund 49% of the costs of the Wastewater Enterprise’s SEP New Headworks Replacement Project and additional costs of the revised Biosolids Digester Facility Project plus certain eligible expenses. Payment of the WIFIA Loan will be secured by a senior lien pledge of the Wastewater Enterprise’s net revenues and is on a parity lien basis with the SFPUC’s outstanding Wastewater Revenue Bonds and Clean Water SRF Loans entered into with the California State Water Resources Control Board.
The loan will bear a fixed interest rate of 1.45% for a 35- year term, with loan repayment expected to begin in fiscal year 2025, after substantial completion of project construction.
In January of 2024, the SFPUC received disbursement of $352,573 in respect to eligible project costs. In February 2025, the SFPUC received a final disbursement of $161,289. As of June 30, 2025 and 2024, the principal amount outstanding of the loan including capitalized interest was $522,056 and $354,920, respectively.
z) Master Loan Agreement and Project 1 Loan Agreement - WIFIA Loan
In April 2023, the SFPUC entered into a WIFIA Master Agreement and Project 1 Loan Agreement with the United States Environmental Protection Agency. The WIFIA Master Agreement and Project 1 Loan was entered into pursuant to the WIFIA authorized by Congress in 2014. The SFPUC entered the WIFIA Master Loan Agreement with the EPA in an amount not to exceed $791,337 to provide partial funding for projects in the Wastewater Enterprise Capital Plan. The Master Agreement defines the general terms for funding a series of WIFIA loans, the first of which is the “Project 1 Loan Agreement”. The incurrence of the Project 1 Loan Agreement, in an aggregate initial principal amount not to exceed $369,335, will provide partial funding for six Wastewater Enterprise capital improvement projects. Those projects are Westside Pump Station Reliability Improvements, North Shore Pump Station Wet Weather Improvements, Wawona Area Stormwater Improvement, New Treasure Island Wastewater Treatment Plant, Folsom Area Stormwater Improvement, and Yosemite Creek Daylighting. Proceeds of the loan will fund 49% of project costs plus eligible expenses. The Project 1 Loan is on a parity lien basis with the SFPUC’s outstanding Wastewater Revenue Bonds and Clean Water SRF Loans entered into with the California State Water Resources Control Board. The loan will bear a fixed interest rate of 3.65% for a 32-year term, with loan repayment expected to begin in fiscal year 2033. In February 2025, the SFPUC received disbursement of $157,643. As of June 30, 2025 and 2024 the principal amount outstanding of the loan including capitalized interest was $159,282 and $0, respectively.
126 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
aa) Future Annual Debt Service of WIFIA Loans
The future annual debt service relating to the WIFIA Loan to fund the Biosolids Digester Facility Project and the Southeast Treatment Plant Project outstanding as of June 30, 2025 is as follows:
ab) Events of Default and Remedies
Significant events of default as specified in the Wastewater Enterprise Indenture (applicable to Wastewater Revenue Bonds, SRF Loans, and WIFIA Loan include 1) Non- payment 2) material breach of warranty, representation, or indenture covenants (not cured within applicable grace periods), and 3) bankruptcy and insolvency events, which may result in the Trustee (upon written request by the majority of the owners (by aggregate amount of the bond obligations or of a credit provider), declaring the principal and the interest accrued thereon, to be due and payable immediately. As of June 30, 2025 and 2024, there were no such events described herein.
ac) Leases
The Wastewater Enterprise as a lessee has entered into long- term leases for office space and communication site. The terms and conditions for these leases vary, which range between 1- 75 years.
Future annual lease payments as of June 30, 2025:
There were no future lease payments or balances as of June 30, 2024.
Variable Lease Payments
Variable lease payments, other than those payments that depend on an index or rate or are fixed in substance, are excluded for the measurement of the lease liability. Such amounts are recognized as lease expenses in the period in which the obligation for those payments is incurred.
Principal Interest Total
Fiscal years ending June 30:
2026 $ — 5,190 5,190
2027 — 10,381 10,381
2028 — 10,381 10,381
2029 — 10,380 10,380
2030 — 10,380 10,380
2031-2035 — 101,652 101,652
2036-2040 — 118,820 118,820
2041-2045 111,009 116,086 227,095
2046-2050 332,557 96,741 429,298
2051-2055 441,799 64,130 505,929
2056-2060 436,539 25,487 462,026
2061-2062 72,748 1,423 74,171
Total 1,394,652 571,051 1,965,703
Less: Current portion —
Long-term portion as of June 30, 2025 $ 1,394,652
Principal Interest Total
Fiscal years ending June 30:
2026 $ 1,766 135 1,901
2027 1,817 84 1,901
2028 1,209 37 1,246
2029 696 11 707
Total 5,488 267 5,755
Less: Current portion (1,766)
Long-term portion as of June 30, 2025 $ 3,722
127 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Certain facility rental leases require the Enterprise to make variable lease payments that based on usage, related to the property taxes levied on the lessor, and insurance payments made by the lessor, these amounts are generally determined annually. The amounts recognized as expense for variable lease payments not included in the measurement of the lease liability were $211 and $4 during the years ended June 30, 2025 and 2024, respectively.
ad) Subscription- Based Information Technology Arrangements (SBITAs)
The Wastewater Enterprise has noncancellable subscription arrangements (similar to a lease) for the right to use various information technology hardware and software (SBITAs). The terms and conditions for these subscriptions vary, which ranges between 1-5 years.
Future annual subscription as of June 30, 2025 and 2024 are as follows:
Hetchy Water Long-Term Liability activities for the years ended June 30, 2025 and 2024 are as follows:
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year.
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year.
Principal Interest Total
Fiscal years ending June 30:
2026 $ 503 13 516
2027 94 3 97
Total 597 16 613
Less: Current portion (503)
Long-term portion as of June 30, 2025 $ 94
Principal Interest Total
Fiscal years ending June 30:
2025 $ 93 2 95
2026 93 1 94
T
otal 186 3 189
Less: Current portion (93)
Long-term portion as of June 30, 2024 $ 93
Restated Due within
2024* Additions R eductions 2025 one year
Net other postemployment benefits liability $ 16,269 321 — 16,590 — Net pension liability 19,090 1,320 — 20,410 —
Accrued compensated absences # 5,794 402 — 6, 196 3,256 Accrued workers’ compensation 1,297 203 (270) 1, 230 238 Lease liability 122 397 (92) 427 86
Subscription liability 59 449 (300) 208 175
Damage claims liability 268 155 (126) 297 297
U
nearned revenues, refunds, and other 106 26 (102) 30 24 Total $ 43,005 3,273 (890) 45,388 4,076
Restated Due within
2023 Additions Reductions 2024* one year
Net other postemployment benefits liability $ 14,907 3,469 (2,107) 16,269 — Net pension liability 14,105 9,809 (4,824) 19,090 —
Accrued compensated absences # 2,266 3,528 — 5,794 2,995 Accrued workers’ compensation 1,219 337 (259) 1,297 228 Lease liability 138 — (16) 122 16
Subscription liability 139 — (80) 59 30
Damage claims liability 700 96 (528) 268 121
Unearned revenues, refunds, and other 110 10 (14) 106 106 Total $ 33,584 17,249 (7,828) 43,005 3,496
128 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Power Long-Term Liability activities for the years ended June 30, 2025 and 2024 are as follows:
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year.
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year. ~Commercial papers were short-term in fiscal year 2024.
Interest Maturity Restated Due within
Rate (Calendar Year) 2024* Additions Reductions 2025 one year Bonds:
Qualified Energy Conservation Bonds 4.74 % 2027 $ 2,021 — (569) 1,452 576 New Clean Renewable Energy Bonds 2015 4.62 2032 1,343 — (150) 1,193 152 2015 Series A Revenue Bonds 4.00 - 5.00 2045 32,025 — — 32,025 — 2015 Series B Revenue Bonds 3.00 - 4.00 2026 2,005 — (910) 1,095 945 2021 Series A Revenue Bonds 4.00 - 5.00 2051 74,280 — (1,385) 72,895 1,455 2021 Series B Revenue Bonds 4.00 - 5.00 2051 49,720 — (585) 49,135 620 2023 Series A Revenue Bonds 5.00 2053 123,905 — — 123,905 — Add issuance premiums 33,500 — (1,821) 31,679 —
Total bonds payable 318,799 — (5,420) 313,379 3,748
2009 Series D COPs (Build America) 6.36 – 6.49 2041 12,148 — (463) 11,685 483 Net other postemployment benefits liability 19,883 394 — 20,277 — Net pension liability 23,332 1,613 — 24,945 —
Accrued compensated absences # 8,028 491 — 8,519 4,462 Accrued workers’ compensation 2,336 616 (699) 2,253 429 Arbitrage rebate payable 184 23 — 207 —
Due to other City departments — 37,822 — 37,822 102 Lease liability 150 485 (113) 522 105
Liabilities payable from restricted assets 28,867 — (7,608) 21,259 18,155 Subscription liability 51 357 (241) 167 141
Damage claims liability 3,774 7,758 (10,884) 648 570 Unearned revenues, refunds, and other 7,184 11,535 (10,442) 8,277 7,391 Total $ 424,736 61,094 (35,870) 449,960 35,586
Interest Maturity Rest ated Due within
Rate (Calendar Year) 2023 Additions Reductions 2024* one year Bonds:
Qualified Energy Conservation Bonds 4.74 % 2027 $ 2, 583 — (562) 2,021 569 New Clean Renewable Energy Bonds 2015 4.62 2032 1,491 — (148) 1,343 150 2015 Series A Revenue Bonds 4.00 - 5.00 2045 32,025 — — 32,025 — 2015 Series B Revenue Bonds 3.00 - 4.00 2026 2,885 — (880) 2,005 910 2021 Series A Revenue Bonds 4.00 - 5.00 2051 74,280 — — 74,280 1,385 2021 Series B Revenue Bonds 4.00 - 5.00 2051 49,720 — — 49,720 585 2023 Series A Revenue Bonds 5.00 2053 — 123,905 — 123,905 — Less issuance discount — — — — —
Add issuance premiums 27,948 7,325 (1,773) 33,500 —
Total bonds payable 190,932 131,230 (3,363) 318,799 3,599 2009 Series D COPs (Build America) 6.36 – 6.49 2041 12,593 — (445) 12,148 463 Commercial Papers~ 2.80 – 3.69 2024 116,352 — (116,352) — — Net other postemployment benefits liability 18,220 4,239 (2,576) 19,883 — Net pension liability 17,239 11,989 (5,896) 23,332 — Accrued compensated absences # 3,716 4,312 — 8,028 4,144 Accrued workers’ compensation 2,238 663 (565) 2,336 417 Arbitrage rebate payable — 184 — 184 —
Due to other City departments 1,946 — (1,946) — —
Lease liability 169 — (19) 150 19
Liabilities payable from restricted assets — 28,867 — 28,867 25,513 Subscription liability 116 — (65) 51 25
Damage claims liability 6,150 9,273 (11,649) 3,774 1,872 Unearned revenues, refunds, and other 6,460 7,465 (6,741) 7,184 6,604 Total $ 376,131 198,222 (149,617) 424,736 42,656
129 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
CleanPowerSF Long-Term Liability activities for the years ended June 30, 2025 and 2024 are as follows:
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year.
*Restated due to implementation of GASB Statement No. 101, Compensated Absences. #The change in accrued compensated absences above is the net change for the fiscal year.
a) Qualified Energy Conservation Bonds
In December 2011, Hetchy Power issued $8,291 of taxable QECBs. The QECBs were issued to fund certain qualified green components for the SFPUC’s 525 Golden Gate Headquarters project.
The QECBs were non-rated and privately placed with Banc of America Leasing. The net effective interest rate on the QECBs, after the federal tax subsidy, is 1.2% through fiscal year 2028.
The future annual debt service relating to the QECBs outstanding as of June 30, 202 5 is as follows:
*The SFPUC received an IRS notice dated April 8, 2025 that the federal interest subsidy is reduced by
5.7% or a total reduction of $4 due to sequestration over the remaining life of the bonds assuming the sequestration rate will remain the same after fiscal year 2025.
b) New Clean Renewable Energy Bonds 2015
In October 2015, Hetchy Power issued $4,100 of taxable 2015 NCREBs. The 2015 NCREBs were issued to fund certain qualified clean, renewable energy solar generation facilities at the Marina Middle School and the San Francisco Police Academy. The 2015 NCREBs were non- rated and privately placed with Banc of America Leasing. The net effective interest rate on the 2015 NCREBs, after the federal tax subsidy, is 1.4% through 2033. $1,272 of principal was prepaid in fiscal year 2021.
Restated Due within
2024* Additions Reductions 2025 one year
Net other postemployment benefits liability $ 4,189 — (436) 3,753 — Net pension liability 3,563 1,062 — 4,625 —
Accrued compensated absences # 1,108 176 — 1,284 666 Subscription liability 13 199 (127) 85 70
Damage claims liability 21 299 (320) — —
Unearned revenues, refunds, and other 7,986 21,311 (24,800) 4,497 4,425 Total $ 16,880 23,047 (25,683) 14,244 5,161
Restated Due within
2023 Additions Reductions 2024* one year
Net other postemployment benefits liability $ 4,053 806 (670) 4,189 — Net pension liability 2,124 2, 190 (751) 3,563 —
Accrued compensated absences # 743 365 — 1,108 574
Subscription liability 31 — (18) 13 6
Damage claims liability 34 915 ( 928) 21 17
Unearned revenues, refunds, and other 6,146 18,883 (17,043) 7,986 7,986 Total $ 13,131 23,159 (19,410) 16,880 8,583
Interest
before
Federal
interest
Interest
net
Fiscal years ending June 30: Principal subsidy subsidy* of subsidy 2026 $ 576 62 ( 44) 18
2027 582 35 (24) 11
2028 294 7 (4) 3
Total 1,452 104 (72) 32
Less: Current portion (576)
Long-term portion as of June 30, 2025 $ 876
130 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The future annual debt service relating to the 2015 NCREBs outstanding as of June 30, 2025 is as follows:
*The SFPUC received an IRS notice dated April 8, 2025 that the federal interest subsidy is reduced by 5.7% or a total reduction of $9 due to sequestration over the remaining life of the bonds assuming the sequestration rate will remain the same after fiscal year 2025.
c) Power Revenue Bonds 2015 Series A (Green) and Series B
In May 2015, Hetchy Power issued tax -exempt revenue bonds, 2015 Series A (Green) in the amount of $32,025 with interest rates ranging from 4.0% to 5.0% and 2015 Series B in the amount of $7,530 with interest rates ranging from 3.0% to 4.0%. Proceeds from the bonds were used to finance reconstruction or replacement of existing facilities of the SFPUC’s Hetch Hetchy project, to fund capitalized interest on the 2015 Series AB Bonds, to fund a debt service reserve account for the 2015 Series AB Bonds, and to pay costs of issuance of the 2015 Series AB bonds. The bonds were rated “A+” and “AA -” by S&P and Fitch, respectively. Final maturity for 2015 Series AB are November 1, 2045 and November 1, 2026, respectively. The true interest cost is 3.95%. As of June 30, 2025 and 2024, the outstanding principal amounts were $33,120 and $34,030, respectively.
The future annual debt service relating to the 2015 Series AB Bonds outstanding as of June 30, 2025 is as follows:
Interest
before
Federal
interest
Interest
net
Fiscal years ending June 30: Principal subsidy subsidy* of subsidy 2026 $ 152 53 (35) 18
2027 154 47 (31) 16
2028 156 39 (26) 13
2029 159 32 (21) 11
2030 161 25 (16) 9
2031-2033 411 28 (19) 9
Total 1,193 224 (148) 76
Less: Current portion (152)
Long-term portion as of June 30, 2025 $ 1,041
Fiscal years ending June 30: Principal Interest Total
2026 $ — 1,593
1,593
2027 830 1,576 2,406
2028 1,020 1,534 2,554
2029 1,075 1,482 2,557
2030 1,125 1,427 2,552
2031-2035 6,535 6,208 12,743
2036-2040 8,340 4,358 12,698
2041-2045 10,640 1,997 12,637
2046 2,460 62 2,522
Total 32,025 20,237 52,262
Add: Unamortized bond premium 2,622
Long-term portion as of June 30, 2025 $ 34,647
Hetchy Power - Power Revenue Bonds 2015 Series A (Green) Fiscal years ending June 30: Principal Interest Total
2026 $ 945 25 970
2027 150 3 153
Total 1,095 28 1,123
Less: Current portion (945)
Add: Unamortized bond premium 8
Long-term portion as of June 30, 2025 $ 158
Hetchy Power - Power Revenue Bonds 2015 Series B
131 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
d) Power Revenue Bonds 2021 Series A (Green) and Series B
In December 2021, Hetchy Power issued tax -exempt revenue bonds, 2021 Series A (Green) in the amount of $74,280 with interest rates ranging from 4.0% to 5.0% and 2021 Series B in the amount of $49,720 with interest rates ranging from 4.0% to 5.0%. Proceeds from the bonds were used to refinance a portion of the costs of various capital projects benefiting the Power Enterprise, to fund capitalized interest on the 2021 Series AB Bonds, and to pay costs of issuance. The bonds were rated “AA” and “AA-” by S&P and Fitch, respectively. Final maturity for 2021 Series AB are November 1, 2051. The true interest cost is 2.64%. As of June 30, 2025 and 2024, the outstanding principal amounts were $122,030 and $124,000, respectively.
The future annual debt service relating to the 2021 Series AB Bonds outstanding as of June 30, 2025 is as follows:
e) Power Revenue Bonds 2023 Series A
In October 2023, Hetchy Power issued tax -exempt power revenue bonds, 2023 Series A in the amount of $123,905 with coupon interest rates of 5.0%. Proceeds from the bonds were used to finance or refinance Power Enterprise projects through the retirement of commercial paper issued as interim financing for such projects in furtherance of the Power Capital Improvement Program, to fund capitalized interest, and to pay costs of issuance. The bonds were rated “AA” and “AA -” by S&P and Fitch, respectively. Final maturity for 2023 Series A is November 1, 2053. The true interest cost is 4.56%. As of June 30, 2025 and 2024, the outstanding principal amount was $123,905.
Fiscal years ending June 30: Principal Interest Total
2026 $ 1,455 2,979 4, 434
2027 1,530 2,905 4,435
2028 1,605 2,826 4,431
2029 1,690 2,744 4,434
2030 1,775 2,658 4,433
2031-2035 10,155 12,016 22,171
2036-2040 12,430 9,734 22,164
2041-2045 15,185 6,981 22,166
2046-
2050 18,550 3,618 22,168
2051-2052 8,520 344 8,864
T
otal 72,895 46,805 119,700
Less: Current portion (1,455)
Add: Unamortized bond premium 13,181
Long-term portion as of June 30, 2025 $ 84,621
Hetchy Power - Power Revenue Bonds 2021 Series A (Green) Fiscal years ending June 30: Principal Interest Total
2026 $ 620 2,000 2,620
2027 650 1,969 2,619
2028 685 1,935 2,620
2029 715 1,900 2,615
2030 750 1,864 2,614
2031-2035 4,330 8,742 13,072
2036-2040 5,455 7,751 13,206
2041-2045 6,745 6,534 13,279
2046-2050 19,215 4,183 23,398
2051-2052 9,970 403 10,373
Total 49,135 37,281 86,416
Less: Current portion (620)
Add: Unamortized bond premium 8,945
Long-term portion as of June 30, 2025 $ 57,460
Hetchy Power - Power Revenue Bonds 2021 Series B
132 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The future annual debt service relating to the 2023 Series A Bonds outstanding as of June 30, 2025 are as follows:
f) Events of Default and Remedies
Significant events of default as specified in the Power Enterprise Indenture (applicable to Power Revenue Bonds and energy bonds) and the Equipment Lease/Purchase Agreement include 1) non-payment, 2) material breach of warranty, representation, or indenture covenants (not cured within applicable grace periods) and 3) bankruptcy and insolvency events, which may result in the Trustee (upon written request by the majority of the owners (by aggregate amount of the bond obligations), declare the principal and the interest accrued thereon to be due and payable immediately. As of June 30, 2025 and 2024, there were no such events described herein. See Note 16(a) for information about CleanPowerSF guarantee.
g) Leases
Hetch Hetchy has entered into long- term leases for office space and other equipment. The terms and conditions for these leases vary, which ranges between 1 to 75 years.
Future annual lease payments as of June 30, 2025:
Fiscal years ending June 30: Principal Interest Total
2026 $ — 6,195 6,195
2027 1,075 6,168 7,243
2028 1,445 6,105 7,550
2029 1,820 6,024 7,844
2030 1,920 5,930 7,850
2031-2035 11,650 28,039 39,689
2036-2040 15,370 24,653 40,023
2041-2045 19,725 20,289 40,014
2046-2050 25,320 14,687 40,007
2051-2054 45,580 5,661 51,241
Total 123,905 123,751 247,656
Add: Unamortized bond premium 6,923
Long-term portion as of June 30, 2025 $ 130,828
y
Hetchy Water Principal Interest Total
F
iscal years ending June 30:
2026 $ 86 10 96
2027 90 8 98
2028 96 5 101
2029 101 3 104
2030 18 1 19
2031-2035 17 3 20
2036-2040 19 1 20
Total 427 31 458
Less: Current portion (86)
Long-term portion as of June 30, 2025 $ 341
Hetchy Power Principal Interest Total
F
iscal years ending June 30:
2026 $ 105 12 117
2027 111 9 120
2028 117 6 123
2029 123 3 126
2030 21 1 22
2031-2035 22 4 26
2036-2040 23 1 24
Total 522 36 558
Less: Current portion (105)
Long-term portion as of June 30, 2025 $ 417
133 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Variable Lease Payments
Variable lease payments, other than those payments that depend on an index or rate or are fixed in substance, are excluded from the measurement of the lease liability. Such amounts are recognized as lease expenses in the period in which the obligation for those payments is incurred.
Certain equipment or facility rental leases require Hetch Hetchy to make variable lease payments that based on usage, related to the property taxes levied on the lessor, and insurance payments made by the lessor; these amounts are generally determined annually. During the years ended June 30, 2025 and 2024, there were no amount recognized as expense for variable lease payments not included in the measurement of the lease liability.
h) Subscription-Based Information Technology Arrangements (SBITAs)
Hetch Hetchy has noncancellable subscription arrangements (similar to a lease) for the right to use various SBITAs. The terms and conditions for these subscriptions vary, which ranges between 1 to 5 years.
Future annual subscription as of June 30, 2025 is as follows:
As of June 30, 2025 and 2024, no variable subscription payments were noted for Hetch Hetchy’s subscription IT arrangements.
(8) Certificates of Participation Issued for the 525 Golden Gate Avenue Headquarters Building
Department-wide Business Type Activities
In October 2009, the City issued $167,670 in certificates of participation to fund the headquarters building of the SFPUC at 525 Golden Gate Avenue. The 2009 Series C were issued for $38,120 and 2009 Series D for $129,550 as “Build America Bonds” (BABs) on a taxable basis under the 2009 American Recovery and Reinvestment Act. The 2009 Series C certificates carry interest rates ranging from 2.0% to 5.0% and mature d on November 1, 2022. The 2009 Series D certificates carry interest rates ranging from 6.4% to 6.5% and matured on November 1, 2041.
Hetchy Water Principal Interest Total
Fiscal years ending June 30:
2026 $ 175 6 181
2027 33 — 33
Total 208 6 214
Less: Current portion (175)
Long-term portion as of June 30, 2025 $ 33
Hetchy Power Principal Interest Total
Fiscal years ending June 30:
2026 $ 141 4 145
2027 26 — 26
Total 167 4 171
Less: Current portion (141)
Long-term portion as of June 30, 2025 $ 26
CleanPowerSF Principal Interest Total
Fiscal years ending June 30:
2026 $ 70 2 72
2027 15 — 15
Total 85 2 87
Less: Current portion (70)
Long-term portion as of June 30, 2025 $ 15
134 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
After adjusting for the federal interest subsidy, the true interest cost averages 3.4% and 4.3% for Series C and Series D, respectively.
Under the terms of a memorandum of understanding (MOU) between the City and the SFPUC dated October 1, 2009, the City conveyed the real property to the Trustee, the Bank of New York Mellon Trust Company, N.A., which was replaced by U.S. Bank in March 2014 under a property lease in exchange for the proceeds of the sale of the certificates. The Trustee has leased the property back to the City
for the City’s use under a project lease. The City is obligated under the project lease to pay base rental payments and other payments to the Trustee each year during the 32-year term of the project lease. The Commission makes annual base rental payments to the City for the building equal to annual debt service on the certificates. It is anticipated these lease costs will be offset with reductions in costs associated with current office rental expense.
There are no events of default stated in the memorandum of understanding.
Each of the three enterprises has an ownership interest in the building equal to their projected usage of space as follows: Water (73%), Wastewater (15%), and Hetchy Power (12%). Similarly, each enterprise is responsible for a portion of the annual base rental payment based on their ownership percentages less contributed equity. The percentage share of Base Rental Payments for the enterprises is as follows: Water (71.4%), Wastewater (18.9%), and Hetchy Power (9.7%).
The future annual debt service relating to the certificates of participation 2009 Series D outstanding as of June 30, 2025 are as follows:
Water Enterprise
*The SFPUC received an IRS notice dated April 8, 2025 that the federal interest subsidy on the 2009 Series D bonds is reduced by 5.7%, or a total reduction of $1,053, due to sequestration over the remaining life of the bonds assuming the sequestration rate will remain the same after fiscal year 2025.
Wastewater Enterprise
*The SFPUC received an IRS notice dated April 8, 2025 that the federal interest subsidy on the 2009 Series D bonds is reduced by 5.7%, or a total reduction of $278, due to sequestration over the remaining life of the bonds assuming the sequestration rate will remain the same after fiscal year 2025.
Principal
Interest
before
subsidy
Federal
interest
subsidy*
Interest net
of subsidy
Fiscal years ending June 30:
2026 $ 3, 545 5,431 (1,792) 3,639
2027 3,695 5,201 (1,716) 3,485
2028 3,852 4,961 (1,637) 3,324
2029 4,013 4,710 (1,555) 3,155
2030 4,180 4,450 (1,469) 2,981
2031-2035 23,737 17,863 (5,897) 11,966
2036-2040 29,271 9,297 (3,068) 6,229
2041-2042 13,537 887 (293) 594
Total 85,830 52,800 (17,427) 35,373
Less: Current portion (3,545)
Long-term portion as of June 30, 2025 $ 82,285
Principal
Interest
before
subsidy
Federal
interest
subsidy*
Interest net
of subsidy
Fiscal years ending June 30:
2026 $ 937 1,436 (474) 962
2027 977 1,375 (454) 921
2028 1,019 1,312 (433) 879
2029 1,061 1,246 (411) 835
2030 1,105 1,177 (388) 789
2031-2035 6,276 4,723 (1,559) 3,164
2036-2040 7,740 2,458 (811) 1,647
2041-2042 3,580 234 (78) 156
Total 22,695 13,961 (4,608) 9,353
Less: Current portion (937)
Long-term portion as of June 30, 2025$ 21,758
135 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Hetchy Power
*The SFPUC received an IRS notice dated April 8, 2025 that the federal interest subsidy on the 2009 Series D bonds is reduced by
5.7%, or a total reduction of $143, due to sequestration over the remaining life of the bonds assuming the sequestration rate will remain the same after fiscal year 2025.
(9) Revenue Pledge
Department-wide Business Type Activities - Department-wide revenue pledge for the years ended June 30, 2025 and 2024 are as follows:
Water Revenue Pledge
The Water Enterprise has pledged future revenues to repay various revenue bonds and State Revolving Fund loans. Proceeds from the revenue bonds and State Revolving Fund loans provided financing for various capital construction projects, and to refund previously issued bonds. The bonds and State Revolving Fund loans are payable solely from revenues of the Water Enterprise through the fiscal year ending 2058.
The outstanding amount of revenue bonds and State Revolving Funds loan, total principal and interest remaining, principal and interest paid during fiscal years 2025 and 2024, applicable net revenues and funds available for debt service are as follows:
Principal
Interest
before
subsidy
Federal
interest
subsidy*
Interest net
of subsidy
Fiscal years ending June 30:
2026 $ 483 739 (244) 495
2027 503 709 (234) 475
2028 524 675 (223) 452
2029 546 641 (212) 429
2030 569 606 (200) 406
2031-2035 3,232 2,432 (802) 1,630
2036-2040 3,985 1,266 (418) 848
2041-2042 1,843 121 (40) 81
Total 11,685 7,189 (2,373) 4,816
Less: Current portion (483)
Long-term portion as of June 30, 2025 $ 11,202
2025 2024
Bonds issued with revenue pledge $ 8, 478,880 7,288,964 Clean Water State Revolving Fund (CWSRF) loans with
revenue pledge 666,641 577,632
WIFIA loans with revenue pledge 1,394,652 922,431
Pr
incipal and interest remaining due at the end of the year 16,662,050 13,704,350 Principal and interest paid during the year 423,003 401,428 Net revenues for the year ended June 30 774,669 577,165 Funds available for debt service 1,291,765 1,076,907
2025 2024
Bonds issued with revenue pledge $ 4,801,380 4,634,065 Clean
Water State Revolving Fund (CWSRF) loans with
revenue pledge 300,035 259,970
Principal and interest remaining due at the end of the year 8,286,502 7,714,756 Principal and interest paid during the year 298 ,169 306,369 Net revenues for the year ended June 30 467,755 337,985 Funds available for debt service 646,772 555,585
136 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Revenue Pledge
The Wastewater Enterprise has pledged future revenues to repay various revenue bonds, SRF, and WIFIA loans. Proceeds from the revenue bonds, revenue notes, SRF, and WIFIA loans provided financing for various capital construction projects, and to refund previously issued bonds. The bonds, SRF, and WIFIA loans are payable through fiscal years 2055 , 2056, and 2062, respectively, and are solely from revenues of the Wastewater Enterprise.
The outstanding amount of revenue bonds issued, revenue notes issued, SRF loans, and WIFIA loans, total principal and interest remaining, principal and interest paid during fiscal years 2025 and 2024, applicable net revenues, and funds available for debt service are as follows:
Hetchy Power Revenue Pledge
Hetchy Power has pledged future power revenues to repay the 2011 QECBs and the 2015 NCREBs. Additionally, Hetchy Power has pledged future power revenues for 2015 Series AB, 2021 Series AB, and 2023 Series A power revenue bonds. Proceeds from the bonds provided financing for various capital construction and facility energy efficiency projects. 2015 Series AB, 2021 Series AB, and 2023 Series A power revenue bonds are payable through fiscal years 2046, 2052, and 2054, respectively, and are solely payable from net revenues of Hetchy Power on a senior lien basis to the 2011 QECBs and the 2015 NCREBs.
Outstanding bonds issued with revenue pledge, total principal and interest remaining, principal and interest paid during fiscal years 2025 and 2024, applicable net revenues, and funds available for debt service are as follows:
* Per Indenture, debt service for coverage is calculated using the amount of principal and interest paid during the year for the 2015 Series AB, 2021 Series AB, and 2023 Series A power revenue bonds net of capitalized interest, if any, which have a senior lien on Power Enterprise revenues; principal and interest paid during the year for the 2015 Series AB, 2021 Series AB, and 2023 Series A power revenue bonds was $9,615, net of capitalized interest.
(10) Leases
Department-wide Business Type Activities
Lessor
The SFPUC has leased facilities, easements, communication site and equipment to various tenants. The terms and conditions for these leases vary, which range between 1-65 years.
2025 2024
Bonds issued with revenue pledge $ 3,395,800 2,369,600 Clean Water State Revolving Fund (CWSRF) loans with
revenue pledge 366,606 317,662
WIFIA loans with revenue pledge 1,394,652 922,431
Principal and interest remaining due at the end of the year 7,865,418 5,462,786 Principal and interest paid during the year 114,350 91,601 Net revenues for the year ended June 30 239,391 188,709 Funds available for debt service 416,307 354,681
2025 2024
Bonds issued with revenue pledge $ 281,700 285,299
Principal and interest remaining due at the end of the year 510,130 526,808 Principal and interest paid during the year* 10,484 3,458 Net revenues for the year ended June 30 67,523 50,471 Funds available for debt service 228,686 166,641
137 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The SFPUC variable payments include percentage of sales, utility payments or payments depended on an index made by the lessee; these amounts are generally determined periodically.
The SFPUC did not incur revenue related to residual value guarantees or lease termination penalties. The total amounts for SFPUC ’s lease revenue, interest revenue, and other lease- related revenues recognized during the year ended June 30, 2025 and 202 4 were $210 and $1,779, respectively.
Water Enterprise as Lessor
The SFPUC variable payments include percentage of sales, utility payments or payments depended on an index made by the lessee; these amounts are generally determined periodically.
The SFPUC did not incur revenue related to residual value guarantees or lease termination penalties. The total amounts for Water Enterprise’s lease revenue, interest revenue, and other lease-related revenues recognized during the year ended June 30, 2025 and 2024 were $187 and $1,742, respectively.
Principal and interest requirements to maturity for the lease receivable as of June 30, 2025 and 2024 are as follows:
Water Wastewater
SFPUC
Total
2025 $ 187 23 210
2024 1,742 37 1,779
FY 2025
Fiscal years ending June 30: Principal Interest Total
2026 $ 2,752 748 3, 500
2027 2,
409 695 3,104
2028 2,423 645 3,068
2029 2,215 595 2,810
2030 2,164 566 2,730
2031-2035 10,936 2,128 13,064
2036-2040 6,264 1,123 7,387
2041-2045 141 943 1,084
2046-2050 — 1,090 1,090
2051-2055 — 1,263 1,263
2056-2060 411 1,054 1,465
2061-2065 973 725 1,698
2066-2070 1,384 584 1,968
2071-2075 1,893 389 2,282
2076+ 1,928 122 2,050
Total $ 35,893 12,670 48,563
FY 2024
Fiscal years ending June 30: Principal Interest Total
2025 $ 3,246 807 4, 053
2026 2,
676 748 3,424
2027 2,409 695 3,104
2028 2,423 645 3,068
2029 2,215 595 2,810
2030-2034 10,897 2,348 13,245
2035-2039 8,246 1,280 9,526
2040-2044 363 921 1,284
2045-2049 — 1,056 1,056
2050-2054 — 1,224 1,224
2055-2059 240 1,179 1,419
2060-2064 898 748 1,646
2065-2069 1,291 617 1,908
2070-2074 1,778 433 2,211
2075+ 2,381 181 2,562
Total $ 39,063 13,477 52,540
138 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Wastewater Enterprise as Lessor
Variable payments include percentage of sales, or payments depended on an index made by the lessee; these amounts are generally determined periodically. The Wastewater Enterprise did not incur revenue related to residual value guarantees or lease termination penalties. The total amounts for Wastewater Enterprise’s lease revenue, interest revenue, and other lease- related revenues recognized during the years ended June 30, 2025 and 2024 were $23 and 37, respectively.
Principal and interest requirements to maturity for the lease receivable as of June 30, 202 5 and 2024 are as follows:
(11) Water Wholesale Balancing Account – Water Supply Agreement
Pursuant to the terms of the Water Supply Agreement (WSA), the Water Enterprise is required to establish water rates applicable to the Wholesale Customers annually. The wholesale water rates are based on an estimate of the level of revenues necessary to recoup the cost of distributing water to the Wholesale Customers in accordance with the methodology outlined in Article V of the WSA; this annual cost is referred to as the Wholesale Revenue Requirement (WRR). Pursuant to Article VII, Section 7.02 of the WSA, the Water Enterprise is required to re- compute the WRR after the close of each fiscal year based on the actual costs incurred in the delivery of water to the Wholesale Customers. The WRR calculation is subject to a trailing compliance audit and final review by the Wholesale Customers. During fiscal years ending in 2025 (estimated) and 2024 (audited), the WRR, net of adjustments, charged to such wholesale customers was $333,210 and $321,433, respectively.
As part of the final re -calculation of the WRR required by Article VII, Section 7.02 of the WSA, the difference between the wholesale revenues earned during the year and the actual WRR is recorded in a separate account (the Balancing Account) and represents the cumulative amount that is either owed to the Wholesale Customers (if the wholesale revenues exceed the WRR) or owed to the City (if the WRR exceeds the wholesale revenues paid). In accordance with Article VI of the WSA, the amount recorded in the Balancing Account shall earn interest at a rate equal to the average rate received by the City during the year on the invested pooled funds of the City Treasury and the Balancing Account balance shall be taken into consideration in the determination of subsequent wholesale water rates. The Water Enterprise is estimated to owe the Wholesale Customers $12,983 as of June 30, 2025. The Wholesale Customers owed the Water Enterprise $26,121 as of June 30, 2024. Refer to the compliance audit report for the final balancing account available at
https://sfpuc.gov/about-us/reports/audited-financial-statements-annual- financial-reports.
FY 2025
Fiscal years ending June 30: Principal Interest Total
2026 $ 241 26 267
2027 257 19 276
2028 214 12 226
2029 105 8 113
2030 112 4 116
2031-2035 89 1 90
Total $ 1,018 70 1,088
FY 2024
Fiscal years ending June 30: P rincipal Interes t Total 2025 $ 226 32 258
2026 241 26 267
2027 257 19 276
2028 215 12 227
2029 105 7 112
2030-2033 201 6 207
Total $ 1,245 102 1,347
139 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
(12) Other Non-Operating Revenues – Hetchy Power’s Transbay Cable Construction and Licensing Fees
In 2007, the Board of Supervisors adopted the resolution to enter into two non -exclusive licenses with the Transbay Cable LLC (the Licensee) for the Transbay Cable Project. The Licensee proposed to install, operate, and maintain approximately 53 miles of high- voltage direct current transmission cable running from the City of Pittsburg to the City. The first license was a Construction License to install a 400 MW high-voltage transmission line, with a four- year term. The Licensee paid Hetchy Power $3,500 in Renewable Energy, Transmission and Grid Reliability. The Construction licensing fees were fully spent as of 2020.
The second license is an operational license for operation of the transmission line with 25- year term and an option to renew for 10 years. The project came on line November 29, 2010 and cumulative revenues of $22,708 were recorded. Per agreement, the SFPUC shall consider specifically renewable energy, conservation, and environmental health programs, which benefit low -income, at-risk, and environmentally disadvantaged communities. The San Francisco Electricity Reliability Payment shall also be partly used for green jobs training and placement programs, which benefit low -income, at-risk, and environmentally disadvantaged communities. As of June 30, 2025, cumulative expenses of $16,812 have been incurred, with $2,235 and $2,090 in fiscal years 2025 and 2024, respectively.
(13) Employee Benefits
a) Pension Plan
San Francisco City and County Employees’ Retirement System – The SFPUC participates in a cost-sharing multiple-employer defined benefit pension Plan (SFERS Plan). The SFERS Plan is administered by the San Francisco City and County Employees’ Retirement System (SFERS).
For purposes of measuring the net pension liability, deferred outflows/inflows of resources related to pensions, pension expense, information about the fiduciary net position of the SFERS Plan, and additions to/deductions from the SFERS Plan’s fiduciary net position have been determined on the same basis as they are reported by the SFERS Plan. Contributions are recognized in the period in which they are due pursuant to legal requirements. Benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
Replacement Benefits Plan – Replacement Benefits Plan (RBP) is a qualified excess benefit plan established in October 1989. Internal Revenue Code Section 415(m) provides for excess benefit arrangements that legally permit benefit payments above the Section 415 limits, provided that the payments are not paid from the SFERS Plan. The RBP allows the City to pay SFERS retirees any portion of the Charter -mandated retirement allowance that exceeds the annual Section 415(b) limit. The RBP plan does not meet the criteria of a qualified trust under GASB Statement No. 73 because RBP assets are subject to the claims of the employer’s general creditors under federal and state law in the event of insolvency.
GASB Statements No. 68 and No. 73 require that the SFERS Plan and RBP reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
SFERS Plan – The City is an employer of the plan with a proportionate share of 94.70% as of June 30, 2024 (measurement date), 0.15% decreased from prior year, from 94.85% as of June 30, 2023 (measurement date). SFPUC’s allocation percentage was determined based on its employer contributions divided by the City’s total employer contributions for fiscal years 2024 and 2023. The Fiscal Year 2025 Fiscal Year 2024
Valuation Date (VD) July 1, 2023 updated to June 30, 2024 July 1, 2022 updated to June 30, 2023 Measurement Date (MD) June 30, 2024 June 30, 2023
Measurement Period (MP) July 1, 2023 to June 30, 2024 July 1, 2022 to June 30, 2023 140 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
net pension liability, deferred outflows/inflows of resources related to pensions, amortization of deferred outflows/inflows, and pension expense is based on its allocated percentage. SFPUC’s allocation of the City’s proportionate share was 7.64%: 4.35% for Water, 1.97% for Wastewater,
0.54% for Hetchy Water, 0.66% for Hetchy Power and 0.12% for CleanPowerSF as of June 30, 2024 (measurement date). SFPUC’s allocation of the City’s proportionate share was 7.62%:
4.34% for Water, 1.95% for Wastewater, 0.55% for Hetchy Water, 0.68% for Hetchy Power and
0.10% for CleanPowerSF as of June 30, 2023 (measurement date).
RBP – The Water Enterprise’s allocation percentage was determined based on the Water Enterprise’s total pension liability divided by the City’s total headcount for fiscal year 202 4. The Water Enterprise’s total pension liability, deferred outflows/inflows of resources related to pensions, amortization of deferred outflows/inflows and pension expense is based on the Water Enterprise’s allocated percentage. The Water Enterprise’s allocation of the City’s proportionate share was 1.91% as of June 30, 2024, and 1.95% as of June 30, 2023 (measurement dates).
SFERS Plan Description – The Plan provides basic service retirement, disability, and death benefits based on specified percentages of defined final average monthly salary and provides annual cost -of-living adjustments (COLA) after retirement. The Plan also provides pension continuation benefits to qualified survivors. The City Charter and the Administrative Code are the authorities which establish and amend the benefit provisions and employer obligations of the Plan. The Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for the Plan. That report may be obtained on the Retirement System’s website https://mysfers.org
or by writing to the San Francisco
Employees’ Retirement System, 1145 Market Street, 5th Floor, San Francisco, CA 94103 or by calling (415) 487-7000.
SFERS Benefits – The Retirement System provides service retirement, disability and death benefits based on specified percentages of defined final average monthly salary and annual COLA after retirement. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. The Retirement System pays benefits according to the category of employment and the type of benefit coverage provided by the City. The four main categories of Plan members are:
The four main categories of Plan members are:
a. Miscellaneous Non-Safety Members – staff, operational, supervisory, and all other eligible employees who are not in special membership categories. b. Sheriff’s Department and Miscellaneous Safety members – sheriffs assuming office on and after January 7, 2012, and undersheriffs, deputized personnel of the Sheriff’s department, and miscellaneous safety employees hired on and after January 7, 2012. c. Firefighter Members – firefighters and other employees whose principal duties are in fire prevention and suppression work or who occupy positions designated by law as firefighter member positions.
d. Police Members – police officers and other employees whose principal duties are in active law enforcement or who occupy positions designated by law as police member positions.
The membership groups and the related service retirement benefits are included in the Notes to the Basic Financial Statements of San Francisco Employees’ Retirement System.
All members are eligible to apply for a disability retirement benefit, regardless of age, when they have 10 or more years of credited service and they sustain an injury or illness that prevents them from performing their duties. Safety members are eligible to apply for an industrial disability retirement benefit from their first day on the job if their disability is caused by an illness or injury that they receive while performing their duties.
141 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
All retired members receive a benefit adjustment each July 1, which is the Basic COLA. The majority of adjustments are determined by changes in Consumer Price Index with increases capped at 2%. The Plan provides for a Supplemental COLA in years when there are sufficient “excess” investment earnings in the Plan. The maximum benefit adjustment each July 1 is 3.5% including the Basic COLA. Proposition A passed on November 8, 2022 making members who retired before November 6, 1996 (Pre96 Retirees) eligible for a Supplemental COLA, even if SFERS is not fully funded based on the fair value of assets. Also, Pre96 Retirees’ base retirement allowances were adjusted to account for Supplemental COLAs not received in 2013, 2014, 2017, 2018, and 2019 due to the full funding requirement. Effective with Proposition A, Pre96 Retirees receive the same Supplemental COLAs as the members who retired on or after November 6, 1996, and were hired before January 7, 2012. For all members hired before January 7, 2012, all Supplemental COLAs paid to them in retirement benefits will continue into the future even where an additional Supplemental COLA is not payable in any given year. For members hired on and after January 7, 2012, a Supplemental COLA will only be paid to retirees when the Plan is fully funded on a fair value of asset basis and in addition for these members, Supplemental COLAs will not be permanent adjustments to retirement benefits. That is, in years when a Supplemental COLA is not paid, all previously paid Supplemental COLAs will expire.
Funding and Contribution Policy
SFERS Plan – Contributions are made by both the City and the participating employees.
Employee contributions are mandatory as required by the Charter. Employee contribution rates varied from 7.5% to 11.0% and 7.5% to 11.5% as a percentage of gross covered salary in fiscal years 2025 and 2024. Most employee groups agreed through collective bargaining for employees to contribute the full amount of the employee contributions on a pretax basis. The City is required to contribute at an actuarially determined rate. Based on the July 1, 2023 actuarial report, the required employer contribution rates for fiscal year 2025 ranged from 14.91% to 16.91%. Based on the July 1, 2022 actuarial report, the required employer contribution rates for fiscal year 2024 ranged from 15.24% to 18.24%.
Employer contributions and employee contributions made by the employer to the Plan are recognized when due and the employer has made a formal commitment to provide the contributions. The City’s proportionate share of employer contributions recognized by the Retirement System in fiscal years ended June 30, 2024 and 2023 (measurement years) was $636,991 and $638,003, respectively. The SFPUC’s allocation of employer contributions for fiscal years 2024 and 2023 (measurement periods) were $48,529 and $48,672, respectively. The Water Enterprise’s allocation of employer contributions for fiscal years 2024 and 2023 (measurement periods) were $ 27,653 and $27, 925, respectively. The Wastewater Enterprise’s allocation of employer contributions for fiscal years 2024 and 2023 (measurement periods) were $12,402 and $12,383, respectively. Hetchy Water’s allocation of employer contributions for fiscal years 2024 and 2023 (measurement periods) were $3,518 and $3 ,525, respectively. Hetchy Power’s allocation of employer contributions for fiscal years 2024 and 2023 (measurement periods) were $4,299 and $ 4,308, respectively. CleanPowerSF’s allocation of employer contributions for fiscal years 2024 and 2023 (measurement periods) were $657 and $531, respectively.
Replacement Benefits Plan – The RBP is and will remain unfunded and the rights of any participant and beneficiary are limited to those specified in the RBP. The RBP constitutes an unsecured promise by the City to make benefit payments in the future to the extent funded by the City. The City paid $3,142 and $4,614 replacement benefits in the years ended June 30, 2025 and June 30,2024, respectively.
142 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Pension Liabilities/(Asset), P ension Ex penses, and Defe rred Outflows and Inflows of Resources Related to Pensions
Fiscal Year 2025
As of June 30, 2025, the City reported net pension liability (NPL) of $3,913,361 for its proportionate share of the SFERS Plan and RBP, which includes the net pension liability for SFERS Plan of $3,775,717 and the NPL of the RBP was $137,644. The City’s NPL for each of its cost-sharing plans is measured as a proportionate share of the plans’ NPL. The net pension liability of the SFERS Plan is measured as of June 30, 2024 (measurement date), and the total pension liability for the SFERS Plan used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2023 rolled forward to June 30, 2024 using standard update procedures. The City’s proportion of the net pension liability for the SFERS Plan was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined.
The SFPUC’s allocation of the City’s proportionate share of the net pension liability for the plan as of June 30, 2025 was $288,671 of which $164,352 for Water Enterprise, $74,339 for Wastewater Enterprise, $20,410 for Hetchy Water, $24,945 for Hetchy Power and $4,625 for CleanPowerSF.
The Water Enterprise’s allocation of the total pension liability for the RBP as of June 30, 2025 was $2,626.
For the year ended June 30, 2025 , the City’s recognized pension expense was $734,019 for the SFERS Plan and pension expense of $ 399 for RBP, including amortization of deferred outflows/inflows related pension items. SFPUC’s allocation of pension expense for the SFERS Plan including amortization of deferred outflow/inflow related pension items were $ 55,174 of which $31,147, net of RBP of $422, was for the Water Enterprise, $15,675 was for the Wastewater Enterprise, $3,264 was for Hetchy Water, $3,989 was for Hetchy Power, and $ 1,099 was for CleanPowerSF. Pension expense increased from the prior year, largely due to the amortization of deferrals.
As of June 30, 2025, SFPUC reported deferred outflows of resources and deferred inflows of resources related to pensions were the following:
Hetchy Hetchy SFPUC
Water Wastewater Water Power Total
Pension contribution subsequent $ 28,362 12,829 3,522 4,305 798 49,816 25,908 11,719 3,218 3,933 729 45,507
actual experience
12,962 5,863 1,609 1,967 366 22,767
Net difference between projected and actual 30,366 13,735 3,771 4,609 854 53,335 554 851 315 384 6 2,110
$ 98,152 44,997 12,435 15,198 2,753 173,535
Hetchy Hetchy SFPUC
Water Wastewater Water Power Total
$ — — — — — —
actual experience
3,953 1,788 491 600 111 6,943
Net difference between projected and actual — — — — — — 1,629 384 377 461 619 3,470
$ 5,582 2,172 868 1,061 730 10,413
CleanPowerSF
CleanPowerSF
to the measurement date
SFERS Plan - Schedule of Deferred Inflows of Resources
Total
earnings on pension plan investments
SFERS Plan - Schedule of Deferred Outflows of Resources Differences between expected and
Fiscal Year 2025
Changes in assumptions
Change in employer's proportion
Fiscal Year 2025
Differences between expected and
Changes in assumptions
earnings on pension plan investments
Change in employer's proportion
Total
143 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Amounts reported as deferred outflows, exclusive of contributions made after the measurement date, and deferred inflows of resources will be amortized annually and recognized in pension expense/(benefit) as follows:
Fiscal Year 2024
As of June 30, 2024, the City reported net pension liability (NPL) of $3,588,821 for its proportionate share of the SFERS Plan and RBP, which includes the net pension liability for SFERS Plan of $3,456,687 and the NPL of the RBP was $132,134. The City’s NPL for each of its cost-sharing plans is measured as a proportionate share of the plans’ NPL. The net pension liability of the SFERS Plan is measured as of June 30, 2023 (measurement date), and the total pension liability for the SFERS Plan used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2022 rolled forward to June 30, 2023 using standard update procedures. The City’s proportion of the net pension liability for the SFERS Plan was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined.
The SFPUC’s allocation of the City’s proportionate share of the net pension liability for the plan as of June 30 2024 was $263,344 of which $150,060 for Water Enterprise, $67,299 for Wastewater Enterprise, $19,090 for Hetchy Water, $23,332 for Hetchy Power and $3,563 for CleanPowerSF.
The Water Enterprise’s allocation of the total pension liability for the RBP as of June 30, 2024 was $2,583.
For the year ended June 30, 2024, the City’s recognized pension expense was $659,719 for the SFERS Plan and pension expense of $7,557 for RBP, including amortization of deferred outflows/inflows related pension items. SFPUC’s allocation of pension expense for the SFERS Plan including amortization of deferred outflow/inflow related pension items were $48,429 of which $26,330, net of RBP of $1,422, was for the Water Enterprise, $14,091 was for the Wastewater Enterprise, $3,230 was for Hetchy Water, $3,948 was for Hetchy Power, and $830 was for CleanPowerSF. Pension expense increased from the prior year, largely due to the amortization of deferrals.
$ 227 457
actual experience
28 446
412 565
$ 667 1,468
Water Enterprise - RBP
Total
Schedule of
Deferred
Outflows of
R
esources
Schedule of
Deferred
Inflows of
R
esourcesFiscal Year 2025
Differences between expected and
Changes in assumptions
Change in employer's proportion
RBP
Fiscal
years Water Wastewater
Hetchy
Water
Hetchy
Power CleanPowerSF
SFPUC
Total Water
2026 $ (6,821) (2,281) (1,000) (1,222) (449) (11,773) (519) 2027 57,849 26,486 7,339 8,970 1,483 102,127 (350) 2028 10,693 4,718 1,356 1,657 179 18,603 43
2029 2,487 1,073 350 427 12 4,349 25
Total $ 64,208 29,996 8,045 9,832 1,225 113,306 (801) SFERS Plan
144 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
As of June 30, 2024, SFPUC reported deferred outflows of resources and deferred inflows of resources related to pensions were the following:
Amounts reported as deferred outflows, exclusive of contributions made after the measurement date, and deferred inflows of resources will be amortized annually and recognized in pension expense/(benefit) as follows:
Actuarial Assumptions
Fiscal Year 2025
A summary of the actuarial assumptions and methods used to calculate the Total Pension Liability for SFERS Plan as of June 30, 2024 (measurement year) is provided below, including any assumptions that differ from those used in the July 1, 2023 actuarial valuation. Refer to the July 1, 2023 actuarial valuation report for a complete description of all other assumptions, which can be found on the Retirement System’s website https://mysfers.org/ .
Hetchy Hetchy SFPUC
Water Was tewater Water Power Total
Pension contribution subsequent $ 27,653 12,402 3,518 4,299 657 48,529 16,124 7,231 2,051 2,507 383 28,296
actual experience
19,421 8,710 2,470 3,021 461 34,083
Net difference between projected and actual 28,399 12,736 3,613 4,415 674 49,837 1,033 1,606 277 338 12 3,266
$ 92,630 42,685 11,929 14,580 2,187 164,011
CleanPowerSF
to the measurement date
Total
earnings on pension plan investments
SFERS Plan - Schedule of Deferred Outflows of Resources Differences between expected and
Fiscal Year 2024
Changes in assumptions
Change in employer's proportion
Hetchy Hetchy SFPUC
Water Was tewater Water Power Total
$ — — — — — —
actual experience
8,861 3,974 1,127 1,378 210 15,550
Net difference between projected and actual — — — — — — 2,262 81 814 994 715 4,866
$ 11,123 4,055 1,941 2,372 925 20,416
CleanPowerSF
SFERS Plan - Schedule of Deferred Inflows of Resources
Fiscal Year 2024
Differences between expected and
Changes in assumptions
earnings on pension plan investments
Change in employer's proportion
Total
$ 222 657
actual experience
202 532
472 993
$ 896 2,182
Fiscal Year 2024
Differences between expected and
Changes in assumptions
Change in employer's proportion
Schedule of
Deferred Inflows
of Resources
Water Enterpris e - RBP
Total
Schedule of
Deferred
Outflows of
Resources
RBP
Fiscal
years Water Was tewater
Hetchy
Water
Hetchy
Power CleanPowerSF
SFPUC
Total Water
2025 $ (340) 769 (336) (410) ( 330) (647) (366)
2026 (9,299) (3,318) (1,374) (1,680) (422) ( 16,093) (550) 2027 55,297 25,168 7,151 8,740 1,225 97, 581 (384) 2028 8,196 3,609 1,029 1,259 132 14, 225 14
Total $ 53,854 26,228 6,470 7,909 605 95, 066 (1,286) SFERS Plan
145 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Changes of Assumptions SFERS plan and Replacement Benefits Plan – There were no changes in the discount rate for the measurement period ended June 30, 2024. The municipal bond yield increased from 3.65% to 3.93%.
Mortality rates for health Miscellaneous members were based upon adjusted PubG -2010 Employee and Retiree tables for non- annuitants and retirees, respectively. Mortality rates were then projected generationally from the base year using the MP-2019 projection scale.
The actuarial assumptions used at the June 30, 2024 measurement date were based upon the result of a demographic experience study for the period July 1, 2014 through June 30, 2019 and an economic experience study as of July 1, 2023.
Fiscal Year 2024
A summary of the actuarial assumptions and methods used to calculate the Total Pension Liability for SFERS Plan as of June 30, 2023 (measurement year) is provided below, including any assumptions that differ from those used in the July 1, 2022 actuarial valuation. Refer to the July 1, 2022 actuarial valuation report for a complete description of all other assumptions, which can be found on the Retirement System’s website https://mysfers.org/ .
Changes of Assumptions SFERS plan and Replacement Benefits Plan – There were no changes in the discount rate for the measurement period ended June 30, 2023. The municipal bond yield increased from 3.54% to 3.65%.
Key Actuarial Assumptions SFERS Plan and Replacement Benefit Plan Valuation Date July 1, 2023 updated to June 30, 2024
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Normal Cost
Expected Rate of Return 7.20% net of investment expenses Municipal Bond Yield 3.93% as of June 30, 2024
3.65% as of June 30, 2023
Bond Buyer 20-Bond GO Index, June 29, 2023 and June 27, 2024 Inflation 2.50%
Salary Increases 3.25% plus merit component based employee classification and years of service Discount Rate 7.20% as of June 30, 2024
7.20% as of June 30, 2023
Administrative Expenses 0.60% of payroll as of June 30, 2024
0.60% of payroll as of June 30, 2023
Old Miscellaneous Old Police & Fire
Old Police & Fire,
Charters A8.595
Old Police & Fire,
Charters A8.559
and all New Plans pre 7/1/75 and A8.596 and A8.585
Basic COLA June 30, 2024 2.00% 1.90% 2.50% 3.60%
Basic COLA June 30, 2023 2.00% 1.90% 2.50% 3.60%
Key Actuarial Assumptions SFERS Plan and Replacement Benefit Plan Valuation Date July 1, 2022 updated to June 30, 2023
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost
Expected Rate of Return 7.20% net of investment expenses Municipal Bond Yield 3.65% as of June 30, 2023
3.54% as of June 30, 2022
Bond Buyer 20-Bond GO Index, June 30, 2022 and June 29, 2023 Inflation 2.50%
Salary Increases 3.25% plus merit component based employee classification and years of service Discount Rate 7.20% as of June 30, 2023
7.20% as of June 30, 2022
Administrative Expenses 0.60% of payroll as of June 30, 2023
0.60% of payroll as of June 30, 2022
Old Miscellaneous Old Police & Fire
Old Police & Fire,
Charters A8.595
Old Police & Fire,
Charters A8.559
and all New Plans pre 7/1/75 and A8.596 and A8.585
Basic COLA June 30, 2023 2.00% 1.90% 2.50% 3.60%
Basic COLA June 30, 2022 2.00% 1.90% 2.50% 3.60%
146 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
Mortality rates for health Miscellaneous members were based upon adjusted PubG -2010 Employee and Retiree tables for non- annuitants and retirees, respectively. Mortality rates were then projected generationally from the base year using the MP-2019 projection scale.
The actuarial assumptions used at the June 30, 2023 measurement date were based upon the result of a demographic experience study for the period July 1, 2014 through June 30, 2019 and an economic experience study as of July 1, 2022.
Discount Rate
Fiscal Year 2025
SFERS Plan – The beginning and end of year measurements are based on different assumptions and contribution methods that may result in different discount rates. The discount rate was 7.20% as of June 30, 2024 and June 30, 2023 (measurement date).
The discount rate used to measure the Total Pension Liability as of June 30, 2024 was 7.20%.
The projection of cash flows used to determine the discount rate assumed that plan member contributions will continue to be made at the rates specified in the Charter. Employer contributions were assumed to be made in accordance with the contribution policy in effect for July 1, 2023 actuarial valuation. That policy includes contributions equal to the employer portion of the entry age normal costs for members as of the valuation date, a payment for the expected administrative expenses, and an amortization payment on the unfunded actuarial liability.
The amortization payment is based on closed periods that vary in length depending on the source. Charter amendments prior to July 1, 2014 are amortized over 20 years. After July 1, 2014, any Charter changes to active member benefits are amortized over 15 years and changes to inactive member benefits, including Supplemental COLAs, are amortized over 5 years.
However, the change due to Proposition A was amortized over 10 years. In the July 1, 2016 valuation, the increase in the unfunded actuarial liability attributable to the Supplemental COLAs granted effective July 1, 2013 was amortized over 17 years. For the July 1, 2021 valuation, all amortization periods for actuarial gains and losses and prior assumption changes were reduced to 5 years. The assumption change effective July 1, 2021 is amortized over 20 years. Future experience gains and losses and assumption or method changes on or after July 1, 2021 are amortized over 20 years. If the plan becomes 100% funded based on the actuarial value of assets, any new net surpluses are amortized over a rolling 20- year period. All amortization schedules are established as a level percentage of payroll so payments increase 3.25% each year. The unfunded actuarial liability is based on an actuarial value of assets that smooths investment gains and losses over five years and a measurement of the actuarial liability that excludes the value of any future Supplemental COLAs.
While the contributions and measure of actuarial liability in the funding valuation do not anticipate any future Supplemental COLAs, the projected contributions for the determination of the discount rate include the anticipated future amortization payments on future Supplemental COLAs for current members when they are expected to be granted. For members who were hired before Proposition C passed, a Supplemental COLA is granted if the actual investment earnings during the year exceed the expected investment earnings on the actuarial value of assets. For members who were hired after Proposition C passed, the fair value of assets must also exceed the actuarial liability for a Supplemental COLA to be granted. When a Supplemental COLA is granted, the amount depends on the amount of excess earnings and the basic COLA amount for each membership group. Most members receive a 1.50% Supplemental COLA when a full Supplemental COLA is granted.
147 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
A 0.50% Supplement COLA is expected to be payable as of July 1, 2024 for most non- Prop C members due to the favorable investment returns for fiscal year ended 2024. The table below shows the net assumed Supplemental COLA for members with a 2.00% Basic COLA for sample years.
The projection of benefit payments to current members for determining the discount rate includes the payment of anticipated future Supplemental COLAs.
Based on these assumptions, the Retirement System’s fiduciary net position was projected to be available to make projected future benefit payments for current members through 2106. Projected benefit payments are discounted at the long-term expected return on assets of 7.20% to the extent the fiduciary net position is available to make the payments and at the municipal bond rate of 3.93% to the extent they are not available. The single equivalent rate used to determine the Total Pension Liability as of June 30, 2024 is 7.20%.
The long-term expected rate of return on pension plan investments was 7.20%. It was set by the Retirement Board after consideration of both expected future returns and historical returns experienced by the Retirement System. Expected future returns were determined by using best - estimate of expected future nominal rates of return for each major asset class over 10 and 30- year horizons. These estimates were combined to produce the long-term expected rate of return by weighting the expected future nominal rates of return by the target asset allocation percentage.
The target allocation and best estimates of geometric long -term expected real rates of return (expected returns, net of pension plan investment expense and inflation) for each major asset class are summarized in the following table.
RBP – The beginning and end of year measurements are based on different assumptions that result in different discount rates. The discount rate was 3. 93% as of June 30, 2024. This reflects the yield for a 20 -year, tax-exempt general obligation municipal bond with an average rating of AA/Aa or higher. The Municipal Bond Yields are the Bond Buyer 20 -Year GO Index as of June 29, 2023 and June 27, 2024. These are the rates used to determine the total pension liability as of June 30, 2024.
The inflation assumption of 2.50% compounded annually was used for projecting the annual IRC Section 415(b) limitations. The actual IRC Section 415(b) limitations published by the IRS of $275 was used for the 2024 measurement date.
The SFERS assumptions about Basic and Supplemental COLA previously discussed also apply to the Replacement Benefits Plan, including the impact of the State Appeals Court determination that the full funding requirement for payment of Supplemental COLA included in Proposition C was unconstitutional and the impact is accounted for as a change in benefits.
Fiscal years
2026 0.75 % 0. 50 %
Assumed Supplemental COLA for Members with a 2.00%
Basic COLA
96 - Prop C
Before 11/6/96
or After Prop C
+
Target Allocation
from Jan 2021 -
June 2024
Target Allocation
Effective as of
Jul 2024
Long-term
Expected Real
Rate of Return
37.0 % 32.0 % 4.2 %
23.0 20.0 7.2
Liquid Credit 5.0 12.0 3.9
Private Credit 10.0 10.0 5.9
10.0 10.0 5.5
Absolute Return 10.0 10.0 4.4
8.0 8.0 1.8
Cash — 1.0 1.2
(3.0) (3.0) 1.6
100.0 % 100.0 %
Private Equity
Real Assets
Treasuries
Leverage
Total
Asset Class
Global Equity
148 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
On June 30, 2025, City’s membership in the RBP had a total of 284 active members and 154 retirees and beneficiaries currently receiving benefits. The Water Enterprise has 6 active members and 4 retirees and beneficiaries currently receiving benefits.
Fiscal Year 2024
SFERS Plan – The beginning and end of year measurements are based on different assumptions and contribution methods that may result in different discount rates. The discount rate was 7.20% as of June 30, 2023 and June 30, 2022 (measurement date).
The discount rate used to measure the Total Pension Liability as of June 30, 2023 was 7.20%.
The projection of cash flows used to determine the discount rate assumed that plan member contributions will continue to be made at the rates specified in the Charter. Employer contributions were assumed to be made in accordance with the contribution policy in effect for July 1, 2022 actuarial valuation. That policy includes contributions equal to the employer portion of the entry age normal costs for members as of the valuation date, a payment for the expected administrative expenses, and an amortization payment on the unfunded actuarial liability.
The amortization payment is based on closed periods that vary in length depending on the source. Charter amendments prior to July 1, 2014 are amortized over 20 years. After July 1, 2014, any Charter changes to active member benefits are amortized over 15 years and changes to inactive member benefits, including Supplemental COLAs, are amortized over 5 years.
However, the change due to Proposition A was amortized over 10 years. In the July 1, 2016 valuation, the increase in the unfunded actuarial liability attributable to the Supplemental COLAs granted effective July 1, 2013 was amortized over 17 years. For the July 1, 2021 valuation, all amortization periods for actuarial gains and losses and prior assumption changes were reduced to 5 years. The assumption change effective July 1, 2021 is amortized over 20 years. Future experience gains and losses and assumption or method changes on or after July 1, 2021 are amortized over 20 years. If the plan becomes 100% funded based on the actuarial value of assets, any new net surpluses are amortized over a rolling 20- year period. All amortization schedules are established as a level percentage of payroll so payments increase 3.25% each year. The unfunded actuarial liability is based on an actuarial value of assets that smooths investment gains and losses over five years and a measurement of the actuarial liability that excludes the value of any future Supplemental COLAs.
While the contributions and measure of actuarial liability in the funding valuation do not anticipate any future Supplemental COLAs, the projected contributions for the determination of the discount rate include the anticipated future amortization payments on future Supplemental COLAs for current members when they are expected to be granted. For members who were hired before Proposition C passed, a Supplemental COLA is granted if the actual investment earnings during the year exceed the expected investment earnings on the actuarial value of assets. For members who were hired after Proposition C passed, the fair value of assets must also exceed the actuarial liability for a Supplemental COLA to be granted. When a Supplemental COLA is granted, the amount depends on the amount of excess earnings and the basic COLA amount for each membership group. Most members receive a 1.50% Supplemental COLA when a full Supplemental COLA is granted.
No Supplemental COLA was payable as of July 1, 2023 due to the unfavorable investment return for fiscal year 2023. The table below shows the net assumed Supplemental COLA for members with a 2.00% Basic COLA for sample years.
Fiscal years
2025 0.
75 % 0.50 %
Assumed Supplemental COLA for Members with a 2.00%
Basic COLA
Before 11/6/96
or After Prop C96 - Prop C
+
149 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
The projection of benefit payments to current members for determining the discount rate includes the payment of anticipated future Supplemental COLAs.
Based on these assumptions, the Retirement System’s fiduciary net position was projected to be available to make projected future benefit payments for current members through 2104. Projected benefit payments are discounted at the long-term expected return on assets of 7.20% to the extent the fiduciary net position is available to make the payments and at the municipal bond rate of 3.65% to the extent they are not available. The single equivalent rate used to determine the Total Pension Liability as of June 30, 2023 is 7.20%.
The long-term expected rate of return on pension plan investments was 7.20%. It was set by the Retirement Board after consideration of both expected future returns and historical returns experienced by the Retirement System. Expected future returns were determined by using a building-block method in which best -estimate ranges of expected future real rates of return were developed for each major asset class. These ranges were combined to produce the long- term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.
Target allocation and best estimates of geometric long-term expected real rates of return (net of pension plan investment expense and inflation) for each major asset class are summarized in the following table.
RBP – The beginning and end of year measurements are based on different assumptions that result in different discount rates. The discount rate was 3.65% as of June 30, 2023. This reflects the yield for a 20 -year, tax-exempt general obligation municipal bond with an average rating of AA/Aa or higher. The Municipal Bond Yields are the Bond Buyer 20 -Year GO Index as of June 30, 2022 and June 29, 2023. These are the rates used to determine the total pension liability as of June 30, 2023.
The inflation assumption of 2.50% compounded annually was used for projecting the annual IRC Section 415(b) limitations. The actual IRC Section 415(b) limitations published by the IRS of $265 was used for the 2023 measurement date.
The SFERS assumptions about Basic and Supplemental COLA previously discussed also apply to the Replacement Benefits Plan, including the impact of the State Appeals Court determination that the full funding requirement for payment of Supplemental COLA included in Proposition C was unconstitutional and the impact is accounted for as a change in benefits.
On June 30, 2024, City’s membership in the RBP had a total of 227 active members and 149 retirees and beneficiaries currently receiving benefits. The Water Enterprise has 6 active members and 4 retirees and beneficiary currently receiving benefits.
Sensitivity of Proportionate Share of the Net Pension (Asset)/Liability to Changes in the Discount Rate
The following presents the SFPUC’s allocation of the employer’s proportionate share of the net pension (asset)/liability (NPA/NPL) for the SFERS Plan, calculated using the discount rate, as well as what the SFPUC’s allocation of the employer’s proportionate share of the net pension Target
Allocation
Long-term Expected Real
Rate of Return
37.0 % 4.6 %
23.0 7.8
Private Credit 10.0 5.8
10.0 5.3
10.0 4.4
8.0 1.7
5.0 3.5
(3.0) 1.4
100.0 %
Asset Class
Treasuries
Leverage
Private Equity
Hedge Funds/Absolute Returns
Global Equity
Total
Real Assets
Liquid Credit
150 Financial Section | San Francisco Public Utilities Commission Annual Comprehensive Financial Report FY 2025
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Notes to Basic Financial Statements
June 30, 2025 and 2024
(Dollars in thousands, unless otherwise stated)
(asset)/liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate.
The following presents the Water Enterprise’s allocation of the employer’s proportionate share of the total pension liability for the RBP, calculated using the discount rate, as well as what the Water Enterprise’s allocation of the employer’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate.
b) Other Postemployment Benefits
The SFPUC participates in a single-employer defined benefit other postemployment benefits plan (the Plan). The Plan is maintained by the City and is administered through the City’s Health Service System. It provides postemployment medical, dental and vision insurance benefits to eligible employees, retired employees, surviving spouses, and domestic partners. Health benefit provisions are established and may be amended through negotiations between the City and the respective bargaining units. The City does not issue a separate report on its OPEB plan.
GASB Statement No. 75 requires that reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.